Frequently Asked Questions About Proposed Rate Increases
How are utility rates set?
Each year, when the Department of Utilities is preparing its budget, it evaluates its projected revenues and expenditures. If expenditures exceed revenues, the Department looks for ways to find further efficiencies in its programs and operations. If there continues to be a gap, the Department will propose a rate increase to create a balanced budget.
The City Council established a Utilities Rate Advisory Commission to provide advice and recommendations to the Mayor and City Council on the City’s utility service rates. The Commission is made up of community members, some of whom have expertise in the Utilities field. The Department consulted with the Commission in the formation of these proposed rate changes and will formally propose these rates to the Commission at a public hearing as required by Proposition 218.
The Utilities Rate Advisory Commission will hear the proposed rates on May 27, 2009 at 6 p.m. in the City Council Chambers, 915 I Street, Sacramento. Customers can attend the hearing in support or opposition. They may also support or oppose the proposals in writing. All protests must be received by the City Clerk (915 I Street, 1st Floor, Sacramento, CA 95814) at or before the time set for the public hearing. A written protest must identify the parcel number(s) and address(es) of the affected parcels.
After the public hearing, the Utilities Rate Advisory Commission will make a recommendation regarding the proposed rate increases to the City Council at a public hearing in June 2009.
Why are rates increasing?
The Department is proposing rate increase for water, sewer, and solid waste service to ensure that they Department can continue to meet its levels of service. The costs for items that are vital to providing the services, such as electricity, chemicals and labor continue to rise. Fee for waste disposal are increasing and additional costs are being incurred to pay for post closure activities at the landfills. The Department must also meet increasing regulatory requirements for water, sewer and solid waste services. If the Department of Utilities fails to comply with these regulatory requirements, the City could face mandatory fines, stricter mandates or be prevented from obtaining state and federal funds. Additionally, the Department has been a facing dramatically increasing amount of unforeseen bad debt due to the foreclosure crisis, and needs to recover those costs.
Below is a chart of the primary categories driving the projected cost increase in the next year’s expenditure budgets for utility services. The percentages reflect each factor’s share of the proposed increase of approximately $15 million in the FY 2009/2010 proposed budget for these categories.
What has the Utilities Department Staff done to help trim the budget?
The Department of Utilities provides some of the most basic and core services to residences and businesses in the City. Nevertheless, through this budget process, the Department has looked closely to find efficiencies and savings within the Department. Some efficiencies and savings found include:
- re-routing crews and vehicles to limit fuel consumption;
- switching to a 4 day a week/10 hour day collection schedule for garbage, recycling and yard waste collection services to reduce overtime, fuel and labor costs;
- implementing employee furloughs;
- holding vacancies open; and
- seeking additional funding for Utilities’ programs through grant funding and financing.
What do rates pay for?
Revenue from rates for water, sewer, drainage, and solid waste services pay for the day-to-day operations of the utility systems. They also pay for regulatory programs and state mandated programs, such as the Water Meter Implementation Program. Additionally, funds help pay for capital improvement projects that replace or rehabilitate aging infrastructure that ensure customers continue to receive vital water, sewer, and drainage services.
How does this proposed increase impact a single-family residential customer?
Most single-family residential customers have 6-9 rooms for billing purposes or a 1-inch water meter (if they have a meter connected). All single-family residential customers receive garbage, recycling, and street sweeping service. Some residential customers have containerized yard waste collection. Others are provided loose-in-the-street yard waste collection.
The chart below shows the proposed changes to a typical single-family residential customer’s bill. If you have questions about your bill, please call us at (916) 808-5454.
Utility Services |
CURRENT RATE |
PROPOSED 7/1/2009 RATE |
PROPOSED 7/1/2010 RATE |
TOTAL PROPOSED MONTHLY INCREASE YEAR 1 |
TOTAL PROPOSED MONTHLY INCREASE |
Water (unmetered)1 |
$25.97 |
$32.46 |
$40.58 |
$6.49 |
$8.12 |
Sewer1 |
$13.37 |
$15.38 |
$17.69 |
$2.01 |
$2.31 |
Storm Drainage 1 |
$11.31 |
$11.31 |
$11.31 |
$0.00 |
$0.00 |
Garbage Collection (96-gallon container)2 |
$18.43 |
$21.19 |
$24.37 |
$2.76 |
$3.18 |
Commingled Recycling (96-gallon container)2 |
$4.09 |
$4.70 |
$5.41 |
$0.61 |
$0.71 |
Yard Waste Collection (non-containerized)3 |
$11.23 |
$12.91 |
$14.85 |
$1.68 |
$1.94 |
Street Sweeping3 |
$1.34 |
$1.54 |
$1.77 |
$0.20 |
$0.23 |
TOTAL |
$85.74 |
$99.49 |
$115.98 |
$13.75 |
$16.49 |
1Water, sewer, and storm drainage rates listed above are for a typical flat rate single-family customer (6-7 room household). The percentage rate increases shown above will apply to all residential and commercial customers (flat rate and metered, including the proposed restructured metered water rates if adopted).
2Garbage collection rate listed above is for a typical 96-gallon residential garbage container; residents using 64 or 32-gallon containers will have lower rates. The percentage rate increases shown above will apply to all residential and commercial garbage and recycling collection customers
3Non-containerized yard waste collection and street sweeping rates listed above are for single-family residential customers. The percentage rate increases shown above will apply to all residential and commercial lawn and garden refuse collection (non-containerized and containerized) and street sweeping customers. The City offers a voluntary containerized collection service program that is an alternative to non-containerized yard waste collection.
Sewer collection rates for customers served and billed by the Sacramento Area Sewer District (SASD) are not included in this table or affected by this proposed rate change.
What is the new proposed water meter structure?
The proposed metered water rate structure consists of a fixed service rate based on the size of the water meter providing service to the property and a usage charge for 100 cubic feet of water used (100 cubic feet of water= 1 CCF= 748 gallons).
A typical residential customer has a 1-inch meter.
The proposed restructured metered water rate is shown below:
Meter Size |
Proposed Monthly Fixed Service Charge |
Up to 1-inch Meter |
$13.86 |
1.5-inch Meter |
$26.10 |
2-inch Meter |
$40.79 |
3-inch Meter |
$75.08 |
4-inch Meter |
$124.05 |
6-inch Meter |
$246.49 |
8-inch Meter |
$393.41 |
10-inch Meter |
$564.83 |
12-inch Meter |
$1,054.56 |
Proposed Water Usage Charge ($/CCF) |
|
All Water Usage |
$0.566 |
The proposed rate structure shown above is subject to the proposed water rate increases.
Does a metered water rate mean that I will pay more for my water?
Not necessarily. A customer with a water meter billed on a metered rate pays a base service fee and then only for the amount of water that they use. A customer who uses more water than the average customer billed on a flat rate will pay more. A customer who uses less water than the average customer on a flat rate will pay less.
The chart below shows a flat rate bill for a 6-7 room, single family customer versus a median water user on a metered rate with a 1-inch meter.
If I have metered water service, will my sewer rate be metered as well?
Residential customers will not be charged for sewer on a metered rate. Commercial customers are currently charged a metered sewer rate and will continue to be billed based on a metered sewer rate.
Why is the Utilities Department not implementing a tiered rate at this time?
The Utilities Department has carefully considered the tiered rate option. However, in the near-term, a tiered rate approach is not being implemented for the following reasons
- At this time, there are only about 20,000 homes in Sacramento with a water meter. Of those, only a handful are currently being billed on a metered rate. Therefore, the data necessary to develop a tiered rate structure that would be fair to Sacramentans is limited and may not accurately reflect customer’s behavior once billing is based on metered rates.
- With the water meter implementation program being spread throughout the City, equity issues might occur where, under a tiered rate structure, one neighbor with a meter would be penalized for using the same amount of water as a neighbor who lives in a home without a meter and who is paying a flat rate.
The Department will continue to investigate a tiered rate as an option for the near future as the Water Meter Implementation Plan moves forward.
How can I save money on my bill?
The Department offers its customers several ways to save money on their bills:
Metered Water Rate Conversion - As noted above, metered water customers who use less water will pay lower water bills. Customers who currently have a water meter installed can switch to a metered water rate prior to January 1, 2010, the switch-over date required by law. For more information, please call (916) 808-5454.
Use a Smaller Garbage Container - By recycling more or generating less waste, customers can convert to a smaller garbage container size and save up to 38% on their monthly garbage bill. For more information, please call 311 or (916) 808-5454.
Proposed Garbage Rates (effective July 1, 2009):
Can Size |
96 Gallon |
64 Gallon |
32 Gallon |
Monthly Charge |
$21.19 |
$17.41 |
$13.21 |
Savings |
- |
$ 3.78 |
$ 7.98 |
Voluntary Containerized Yard Waste Program- Additional savings can be achieved by switching to the City’s voluntary containerized collection service program for lawn and garden refuse. Customers are provided a container to place their lawn and garden refuse in each week. This program may not be available in all areas; implementation is based on neighborhood participation. For more information about this program, please call 311 or (916) 264-5011
I can’t pay my bill. What can I do?
While State law precludes the Department from offering “life line” rates such as those offered by telephone and electric utilities, there are two programs that may help those who are not able to afford their City provided utilities:
Payment Plans - The Department offers payment plans for customers with delinquent accounts or those who may have difficulty paying their bills for a period of time. Customers are still responsible for paying all service charges and adhering to the payment plan.
Customer Assistance Program - For elderly, low-income or disabled customers, the Customer Assistance Program offers a way to help you pay your monthly utility bill. For details about the program, please contact Salvation Army at (916) 442-0303.
Why doesn’t the City have a “lifeline rate?”
Under Proposition 218, one rate payer cannot subsidize the cost of service for another rate payer. This means that all customers must pay the same rate for the same service provided to their properties. Some communities are able to offer a “lifeline” rate to low-income, disabled or senior customers by using money within their General Fund (which is not subject to Proposition 218) to offset the decreased revenues generated by their lifeline rate.
The commitments to the City’s General Fund are vast and necessary to our community. They provide public safety, parks, traffic signs, street maintenance and many other things. The City’s General Fund cannot support the increased costs of a lifeline rate.
Because of this, over 10 years ago, the City joined forces with Salvation Army to create the Customer Assistance Program. The Program is run completely by Salvation Army and does not use City money from the Utilities Enterprise Funds or the General Fund to support it. The program is funded completely by customer donations.
How can I help community members who are having trouble paying their bills?
Customers who want to help customers in need to pay for their utility service can do so through the Salvation Army’s Customer Assistance Program. The donation to the program will dedicate the funds to the Customer Assistance Program and will ensure that needy Sacramento families can get the help they need to pay their utility bills in tough times.
To help Sacramento families in need, please mail a check to:
The Salvation Army
P.O. Box 340699
Sacramento, CA 95834-04699