Debate over utilities funds rages on

The heat is still on: Public controversy continues to surround claims that the city’s uses of utilities funds broke state law.

In the latest development, the city plans to send written responses to claims made by the Sacramento County Grand Jury. In a Jan. 6 report, the Grand Jury argued that the city’s use of utilities dollars may overstep Proposition 218, a state law that guides the usage of city funds.

The grand jury report claims that money collected from residents’ utility bills may have been used to fund other municipal programs. Prop. 218 states that cities can use funds from utilities bills in one way: to cover the costs of delivering utilities services, according to the report.

The Sacramento County Taxpayers League and the Howard Jarvis Taxpayers Association in January sued the city over the Prop. 218 issue.
In addition, a ballot proposal from a campaign affiliated with the Taxpayers League seeks to stop a 9.2 percent city utilities rate increase scheduled to start in July.

While there was little discussion among council members Tuesday night about the city’s responses to the Grand Jury report, the issue is not going away.

The Prop. 218 issues will be discussed again as part of the city’s budget process, Utilities Director Marty Hanneman said outside the meeting.

As part of upcoming discussions over the city’s budget, the City Council will make decisions on “ongoing issues that were deemed Prop. 218 violations,” Hanneman said.

In another development, a citizens’ group sharply criticized the City Council for discussing the Prop. 218 issue earlier than the time it had projected in its agenda.

The Campaign for Common Sense Utilities Rates — the group affiliated with the Sacramento County Taxpayers League — delivered its criticism in an e-mail to council members and local media outlets Tuesday night.

The City Council’s decision to change the timing of its discussion on the Prop. 218 issue caused confusion for citizens, who thought it would be discussed later in the evening, according to the e-mail.

“This action has effectively deprived Sacramento citizens of their right to express their views before their elected officials on this very important issue involving millions of dollars of illegally diverted funds and, according to the Grand Jury report, an apparent cover-up by senior city managers of the scope and extent of the illegal conduct,” the e-mail from campaign states.

The city includes a statement in its agendas which says the order of the issues listed in the agenda can be changed.

The Grand Jury wrote in its report that the municipal government “shifted the cost of providing city services from the general fund to the enterprise funds” of the Department of Utilities. It further said that department employees and equipment were assigned to city tasks that were not related to the department. The costs of assigning department employees and equipment to work outside the department was not paid back, according to the report.

In its response to the Grand Jury report, the Utilities Department acknowledged the body’s claim. “The city agrees with this finding, with the clarification that beginning July 1, 2009, the Department of Utilities ceased the use of its personnel or equipment to perform work for non-utility facilities without receiving full cost reimbursement either in funds or through trade of in-kind services.”

Read the city’s response to the Sacramento County Grand Jury report here.

Photo by Anthony Bento.

Kathleen Haley is a staff reporter for The Sacramento Press.

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March 24, 2010 | 2:40 AM

The department of utilities “pulls” another scam. Read the departments response to the Grand Jury report, what a joke. If the director really wrote the report, then he should be fired. If the director only signed the report, then the employee who wrote the report should be fired. If that’s the case, then the director should be put on non paid administrative leave, and resign, before getting fired like Bill Thomas of the development department. signed a mad ratepayer

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