Ballot measure to halt utilities rate hike sparks debate
A controversial ballot measure to halt a 9.2 percent city utilities rate hike is causing tension between city staffers and backers of the measure.
Two local groups, the Sacramento County Taxpayers League and the Campaign for Common Sense Utilities Rates, have gathered signatures to put an initiative on the Nov. 2 ballot that would stop the rate hike. The Sacramento County Registrar has found that 5,420 signatures presented by the groups were credible, according to a June 22 report from the Utilities Department. The registrar required proof of 5,420 legitimate signatures to place the measure on the ballot.
The City Council voted to increase rates on residents’ utilities bills last year, and the 9.2 percent spike kicked in July 1.
The title of the measure is the Utilities Rate Hike Rollback Act of 2010.
“Legally, it’s as good as gold to go on the Nov. 2 ballot,” said Greg Hatfield, vice chairman of the Campaign for Common Sense Utilities Rates.
City staff also expect the initiative to be placed on the ballot. Later this month, the City Council is expected to carry out the last procedural step required by state law to add the measure to the ballot, Assistant City Clerk Stephanie Mizuno said.
If voters approve the initiative, the department could lose 80 to 100 full-time employee positions, Utilities Department spokeswoman Jessica Hess said.
In addition to halting the 9.2 percent rate hike, the measure would establish that rises in the Consumer Price Index could justify rises in utilities rates.
At the same time, the measure would impose a rule saying that residents must vote on any utilities rate hikes that surpass the rate of inflation.
As it makes its case for the measure, the Campaign for Common Sense Utilities points out that the Sacramento County Grand Jury claimed in a recent report that the Utilities Department broke Proposition 218, a state law.
The law states that money from residents’ utilities bills cannot pay for anything other than the cost of utilities services.
Read the Jan. 6 Grand Jury report here.
Residents’ utility payments may have been applied to additional programs in the city government, the Grand Jury claimed.
At this point, city officials and representatives for the Campaign for Common Sense Utilities Rates are sparring over the possible outcomes of the measure if voters approve it in November.
The Utilities Department is predicting that the measure could harm the department and the public in numerous ways.
Hess said revoking the rate hike would mean about $15 million in revenue would not come to the department.
On top of the $15 million, the department expects to face a $7 million rise in expenses including labor, electricity, fuel and chemicals, she said. If the measure passes, the department anticipates that it would need to immediately make cuts and changes to its levels of services, Hess said. That’s because the department must prepare a balanced budget for the 2011 / 2012 fiscal year, which begins July 1, 2011, she said.
The lack of funding could result in lowered water pressure, which may then affect the Fire Department, Hess said.
Among other problems cited by Hess, the department may have to cut back on maintenance and repairs of infrastructure.
“We have pipes in the ground that are over 100 years old,” Hess said. If the department is unable to replace or repair old pipes, there would be an increased chance they could fail, she said.
Read the department’s analysis of the initiative starting on page 11 of this presentation.
Meanwhile, Craig Powell, the chairman of the Campaign for Common Sense Utilities strongly disagrees with the department’s view of the measure.
The department’s analysis of possible outcomes from the measure is “overblown,” Powell said. “They have begun a campaign of scaring the voters.”
He countered that the department should rein in its labor costs, and also claimed that the department violated Prop. 218.
Read the text of the initiative here.
Photo by Ed Fogle, MaverickPhotography.us
Kathleen Haley is a staff reporter for The Sacramento Press.