Spanish Russian Hmong

Utilities will...

  1. Continue to provide high levels of service such as weekly garbage collection and timely response to water and sewer problems.
  2. Charge customers what it costs to provide services, build up and maintain reserves and pay for long-term construction projects.
  3. Use collected revenues to invest and upgrade aging water and sewer pipes, reservoirs and treatment plants to maintain quality service.
  4. Be as efficient as possible to help offset rising costs.
  5. Use collected revenues to comply with local, state and federal rules regarding trash disposal, landfills, recycling, water quality and protection of waterways and natural resources.
  6. Maintain good credit ratings and borrow at the lowest possible cost for construction projects.
  7. Maintain user rates that are comparable in the region and with rates of other communities of similar size, levels of service and age of pipes.
  8. Be a good environmental steward and protect local waterways, natural resources and the community.
  9. Communicate clearly with customers and include customers in discussions about the services provided to them.
  10. Provide rates that are easy to understand and offer options to help control utility bill costs.

Your Questions


Your Utilities

- What services are offered by the City of Sacramento Department of Utilities?

Your Voice

- What is Your Utilities. Your Voice.?

- Regarding community engagement, what has Utilities done so far?

- Where can I get more information about the community engagement process?

Your Dollars

- Why is Utilities seeking a rate increase?

- What is the proposed rate increase?

- What is the impact to metered rate customers?

- Can the Department of Utilities make a profit?

- What has Utilities done to save money during these tough economic times?

- Is the proposed rate increase for all Utilities services?

- Will Utilities propose a rate increase for other services?

- How are customer dollars spent?

- What else is Utilities proposing to remain financially sound?

- What is the Utility User Tax?

Your Future

- What are the benefits of funding the investment program to repair and replace old infrastructure?

- What are the overall consequences of failing to implement the program?

- What are the specific implications of failing or delaying investments for capital improvements?

- Why does Utilities continue to seek rate increases year after year?

- Does anyone agree that Utilities should have a more proactive infrastructure improvement program?

 

Your Utilities

What services are offered by the City of Sacramento Department of Utilities?

Utilities provides water, wastewater (sewer), drainage and solid waste (garbage, recycling and green waste) services to residents and business in the City of Sacramento.

Your Voice

What is Your Utilities. Your Voice.?

Utilities established Your Utilities. Your Voice. to engage the community, educate the public and increase awareness of the complexities and challenges facing the Utilities department. Typically, most Sacramentans give little thought to water, sewer and garbage and are satisfied with services provided. Community engagement is critical as Utilities begins to plan for future rates and future programs and services. After all, Utilities belongs to its customers. The goal is to communicate regularly with customers and stakeholders, create two-way dialogue and gain feedback to help in the challenging times ahead.

Regarding community engagement, what has Utilities done so far?

Utilities reached out to numerous residents, community organizations and business groups to solicit feedback on a set of guiding principles and utility services. More than 1,100 members of the Sacramento community participated in either an online, paper, or telephone survey. The findings of the survey have been analyzed and compiled into a report to be used in the rate adjustment process and in setting future policy. Overall, residential and business customers rated utility services relatively high.

Utilities identified two goals for community engagement:

Read Utilities' Guiding Principles

Read More About This Process

To request a copy of the entire report, please email info@yourutilitiesyourvoice.com

Where can I get more information about the community engagement process?

You can find more information about community engagement and the rate adjustment process on the Your Voice page.

Your Dollars

Why is Utilities seeking a rate increase?

The City of Sacramento Department of Utilities faces state and federal regulatory requirements; rising energy, chemical and materials costs; and a continued need to replace or repair aging infrastructure such as pipes, facilities and equipment. Current rates and other funding sources will not meet the needs identified by Utilities analysts and confirmed by FCS Group, an outside consulting firm specializing in utility rate-setting analysis.

Utilities did not increase rates for the 2011/2012 fiscal year. Utilities saved money through improved efficiency and cost cutting. Many needed infrastructure projects were put on hold. Now, Utilities seeks a multi-year rate adjustment to fund a systematic program to repair and replace extremely old infrastructure. Top

What is the proposed rate increase?

As a result of increased costs and the need for capital improvements, Utilities recommended 3-year rate increase to the City Council of 10% for water and for wastewater 16% (first year), 15% (second year) and 14% (third year). Rate increases would go into effect on July 1 each year. There is no proposal to increase solid waste or storm drainage rates at this time. The proposed water and wastewater rate increase would result in an overall increase in the City utility bill for the average single family residential customer of approximately six percent a year for the next three years. A final rate proposal will be brought to the City Council for consideration in early 2012, following a recommendation by the Utilities Rate Advisory Commission (URAC), consistent with the Proposition 218 notification and public hearing process.

To view the proposed rate schedule for water, click here.

To view the proposed rate schedule for wastewater, click here.

Read the proposed 3-year rate increase fact sheet.

Residential customers, click here.

Business customers, click here.

Top

What is the impact to metered rate customers?

For our customers who do not pay a flat rate, the proposed rate increases would impact their base (service) charge and their volumetric rates. For example, a customer with a one-inch water meter will see their base (service) charge increase 10% per year to $20.16 in FY12/13, $22.18 in FY13/14, and $24.40 in FY14/15. The volumetric will increase 10% to $0.8234 per 100 cubic feet (748 gallons) in FY 12/13, $0.9057 per 100 cubic feet (748 gallons) in FY13/14, and to $0.9963 per 100 cubic feet (748 gallons) in FY 14/15. Top

Can the Department of Utilities make a profit?

No. By law, Utilities can only charge rates sufficient to recover the costs of providing utility services. Top

What has Utilities done to save money during these tough economic times?

In 2011, an independent auditor reviewed Utilities. The Operational Efficiency and Cost Savings Audit identified areas of improvement which Utilities is actively pursuing. Cost savings were achieved by reducing treatment plant personnel, optimizing technology and improving energy management... to name a few. Over the past few years, Utilities created other efficiencies and received non-ratepayer funding, including more than $20 million in federal grants and loans for the water meter program. Overall, Utilities reduced its operating budgets for water and wastewater from 2010/11 to 2011/12 by almost $3 million each while delivering the same high-quality services without a rate increase this year. Top

Is the proposed rate increase for all Utilities services?

No. As the first step of a long-term financial plan, Utilities is proposing rate adjustments only for water and wastewater. A final rate proposal will be brought to City Council for consideration in early 2012, following a recommendation by the Utilities Rate Advisory Commission (URAC), consistent with the Proposition 218 notification and public hearing process. Top

Will Utilities propose a rate increase for other services?

Utilities' financial plan does address needs of the solid waste and storm drainage programs but are not part of the current rate adjustment under review. Consistent with recommendations from the most recent audits, the Solid Waste Division is developing a business plan to guide future operations. Once the business plan is complete, recommendations for solid waste services and operations will be brought to the City Council for consideration.

Regarding storm drainage, under Proposition 218, rate adjustments for this service require voter approval. Utilities is in the process of developing a Storm Drainage Program, similar to that of water and wastewater. If the financing plan recommends a rate adjustment, it would be put before voters. As part of this process, Utilities retained a consultant to conduct a storm drainage rate study and make recommendations. Utilities will present the consultant's findings and recommendations to the City Council for its consideration at a future date.

The final component of the financial plan addresses impact fees paid by developers when development projects impact Utilities' services. Impact fees cover Utilities costs for providing services for new development and those fees need to reflect current costs. At a future date, Utilities will present an impact fee adjustment proposal to the City Council. Top

How are customer dollars spent?


*Budget in 000s

Top

What else is Utilities proposing to remain financially sound?

Sound financial practices dictate that Utilities has an adequate reserve for operations and to position itself for long-term funding of construction projects. In basic terms, Utilities should have a 120-day reserve for both water and wastewater. Currently, reserve funds are only at a 30-day level. Top

What is the Utility User Tax?

In June 1998, Sacramento voters approved Measure I, which imposed an 11 percent tax on the water, sewer, storm drainage and solid waste revenues. This tax revenue is paid to the City's General Fund and is not part of Utilities' budget. Top

Your Future

What are the benefits of funding the investment program to repair and replace old infrastructure?

Investment in this program will allow Utilities to:

Top

What are the overall consequences of failing to implement the program?

Failure to implement this program could cause:

Top

What are the specific implications of failing or delaying investments for capital improvements?

At current rates of infrastructure investment, the city will replace its entire water system every 400 years and its wastewater system every 650 years. Water and wastewater systems should be replaced every 70-100 years to keep them in proper working condition and reliably deliver service, according to the United States Environmental Protection Agency and American Society of Civil Engineers' utility industry best practices. It is clear that City of Sacramento Utilities fall far below recommended industry best practice levels.

Much of the Utilities infrastructure (treatment plants, pipes and systems) are under regulatory control and must follow permit requirements. The City must keep up and maintain its infrastructure to remain in state and federal compliance. If not, the results are devastating and may lead to fines, lawsuits and control of its systems by the state or federal authorities.

Other cities have faced lawsuits and sanctions resulting in costly settlements and fines ranging from thousands to millions of dollars and these are passed on to ratepayers. Failing infrastructure impedes development. Access to quality water and sewer services are core issues when businesses, employees and families consider relocation. Top

Why does Utilities continue to seek rate increases year after year?

Over the past several years, Utilities recommended rate increases to fund long-needed infrastructure improvements. However, when lower rates were adopted, there was only money to cover minor improvements and regulatory requirements, leaving major projects for the future. With much of the infrastructure over 100 years old, these major projects need attention and funding now. Top

Does anyone agree that Utilities should have a more proactive infrastructure improvement program?

Yes. The 2010 Citywide Financial and Operational Review, conducted by Management Partners, Inc., and the 2011 Sacramento Department of Utilities Operational Efficiency and Cost Savings Audit each said current investment in water and wastewater infrastructure systems and maintenance is insufficient.

The Management Partners review stated: "The City of Sacramento's utility funds are in a weak financial position. Unless actions are taken to bolster the financial condition of the utilities, there is a real threat they will begin to require General Fund subsidies for operations and be unable to fund the infrastructure maintenance necessary for continued reliable service." Top