Utilities Rate Advisory Commission Special Meeting – September 7, 2021

The Utilities Rate Advisory Commission (URAC) held a virtual special meeting on September 7, 2021, at 5:30 p.m. to receive and file presentations on two rate workshops: a proposed storm drainage fee increase (Water Pollution and Flood Prevention Measure) and a proposed rate adjustment for recycling and solid waste services. The commission also approved the consent calendar item.

Consent Calendar

• Approved the minutes from the July 28, 2021, meeting unanimously. The motion was made by Commissioner Baring and seconded by Commissioner Fidel; all present commissioners voted yes (Commissioners Baring, Fidel, Gutowski, Vanderwolf, and Chair Thomas). Commissioner Lee was absent.

Public Comments & Testimony

• No members of the public spoke on any agenda item or during the general public comment period.

Discussion Items

• Storm Drainage Rate Workshop #1 – Bill Busath, Director of the Department of Utilities, presented a proposal for a new water pollution and flood prevention measure. The fee would add approximately $6 per month to the average residential customer (from about $11 to about $17), generating $15–20 million annually. The presentation highlighted a $300 million capital project backlog, a drainage system valued at over $8 billion, and a need for $35 million annually for best-practice investments. Staff project the drainage fund would go negative around fiscal year 2026. Key spending categories included rehabilitation and replacement, regulatory compliance, planning, operations and maintenance support, and system improvements. The measure would fund projects addressing failed corrugated metal pipes, pump station electrical upgrades, combined system improvements (with 50% participation from the drainage fund), trash capture, water quality improvements, floodplain management, and more. It is expected to create about 750 jobs and $115 million in economic output over 10 years. Busath also discussed proposed changes to the rate assistance program, suggesting a flat 25% discount instead of the current average over 35% discount, to make the program more sustainable. A protest mailer and ballot initiative are planned, with a timeline leading to a possible July 2022 effective date. Commissioner questions included tracking costs of homeless encampment cleanups (estimated $300–400k annually), levy maintenance across the city, and the calculation of impervious area for commercial rates.

• Recycling and Solid Waste Rate Adjustment Workshop – John Febbo, Interim Integrated Waste General Manager, presented the solid waste fund's declining reserves, driven largely by increased costs for organics processing due to Senate Bill 1383 (state-mandated food waste recycling). The current fund balance is projected to fall below the 90-day operating reserve next fiscal year and become negative by 2025 without rate adjustments. Proposed rate increases of $3.83 per month for three consecutive fiscal years (starting April 2022, then January 2023 and 2024) would raise the residential rate from $42.59 to $54.08 per month. The presentation also cited a nearly 11% increase in residential garbage tonnage in 2020 due to the pandemic, higher processing fees (from $42.44/ton to $70–$104/ton), and the cost of implementing citywide food waste collection by July 2022. Enhancements include food waste recycling, four-week street sweeping, expanded tenant junk pickup, and illegal dumping mitigation. Febbo mentioned that contracts with three processors are for five years with renewal options, and a larger regional facility may be considered later. Commissioner questions focused on compliance timing with SB 1383 (implementation starts January 1, 2022, but collection begins July 2022) and whether the city could develop its own processing facilities.

Key Outcomes

• The commission did not take action on either workshop item; both were received and filed as informational.
• The consent calendar item (approval of minutes) was approved unanimously.
• No formal motions or votes were taken on rate proposals; the commission will receive further updates at upcoming workshops (September 22 for both departments).