DEPARTMENT OF UTILITIES PROPOSING RATE ADJUSTMENTS TO CONTINUE CRITICAL INFRASTRUCTURE IMPROVEMENTS

Storm drainage rate increase needed for safe, reliable and financially stable utility
October 27, 2015

WASHINGTON, D.C. – October 29, 2015 – (RealEstateRama) — The City of Sacramento’s Department of Utilities is presenting a report to the City Council on October 27 proposing four-year rate adjustments to address critical improvements to the city’s water, wastewater and storm drainage infrastructure.

With its recent rate increases, Utilities improved its water pipeline replacement cycle from an average 400 years to an average of about 280 years and its wastewater pipeline replacement cycle from an average 650 years to an average of about 410 years. Best practices for replacement of water and wastewater pipelines is an average of every 100 years.

The proposed rate increases will be used to help Utilities complete rehabilitation, replacement and improvement projects that are essential to keeping our city’s water, wastewater and storm drainage systems safe, reliable and financially stable. The funds will also ensure the city meets state and federal regulatory requirements such as completing the citywide installation of water meters and eliminating sewer overflows.

“We are making difficult decisions as we look to the future of our community,” said Bill Busath, director of the Department of Utilities. “We are facing challenges. Our water, sewer and storm drainage and pipes and many of the facilities are near failure. We’ve made significant progress over the past four years with system upgrades and improvements. But there is still a lot more work to do.”

The proposed water rate adjustment will fund a program to complete the water metering program in the next five years instead of nine. Due to the extraordinary drought, the city is fast-tracking its metering program to complete all installations by the end of 2020, four years before the state’s mandated deadline of January 2025. Having the entire city on water meters will improve water conservation and establish a more fair and equitable billing system for all city residents.

The proposed wastewater rate adjustment will meet regulatory requirements by funding critical improvements to the city’s separated and combined sewer system pipelines, a large underground combined wastewater storage facility in the McKinley Park area and significant upgrades to customer service and billing programs.

The proposed storm drainage rate adjustment will fund many long overdue system improvement projects. There has not been a storm drainage rate adjustment since 1996 – nearly 20 years ago.

“Utilities is working hard just to keep up with basic maintenance on the storm drainage system,” said Busath. “Without additional funding, Utilities will be challenged to provide safe and reliable service, which includes preventing your homes and streets from flooding during a storm, staying in regulatory compliance and working on critical system improvement projects.”

At this time, Utilities is not asking for the City Council’s approval of the proposed rate adjustments. Between now and late February Utilities will be working with the City Council, Budget and Audit Committee and Utilities Rate Advisory Commission to bring a rate adjustment proposal to the City Council for their approval. Utilities will also be conducting community outreach regarding the need for the proposed adjustments.

Water and wastewater rate adjustments can be approved by the City Council, unless there is a protest by more than 50 percent of the customers at a rate hearing held by the Utilities Rate Advisory Commission. If approved by City Council, rate adjustments for water and wastewater would be effective on July 1, 2016. For storm drainage rate adjustments, state law requires property owner approval through a vote. Rate adjustments for storm drainage will not go into effect until approved by a majority of property owners and adopted by the City Council.

Through grant funding and rate adjustments implemented four years ago, Utilities has made significant progress in improving our city’s water and wastewater pipelines and facilities.