A local group that watches public funds hopes to take its complaints over utilities rates to the polls.  The Sacramento County Taxpayers League's new ballot proposal seeks to stop a 9.2 percent city utilities rate increase scheduled to start in July. 

The proposal follows a Jan. 6 grand jury report saying that the city’s use of utilities funds may conflict with Proposition 218, a state law that dictates how city funds should be used. 

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 league partnered with the Howard Jarvis Taxpayers Association in January to sue the city over the Prop. 218 issue.

“What we have is a department that is utterly out of control and is getting worse by the day,” Craig Powell, chairman of the league's initiative campaign, told The Sacramento Press Wednesday.
 
The group argues that city residents have faced utilities rates that have been 321 percent higher than the inflation rate over the last nine years.

The league wants to put its “Utilities Rate Hike Rollback Initiative” on the November ballot. In order for the initiative to be certified for the ballot, the group must collect 5,420 signatures of city voters. Powell said the group will use volunteers to collect the signatures.

In addition to halting the 9.2 percent rate increase, the measure would require the city to tie its annual utilities rate increases to the Consumer Price Index, Powell said. 

The City Council last June raised rates 9 percent for the 2009/2010 fiscal year. It also decided at that time to approve the 9.2 increase for the 2010/2011 fiscal year. 

In June, the Utilities Department said it was experiencing budget woes because of the recession, increased operating costs and new regulatory and environmental requirements. The department also said in June that rates were not raised in the 2008/2009 fiscal year.
 
Utilities Department spokeswoman Jessica Hess said she and department director Marty Hanneman could not comment on the proposed initiative because they had not seen it.

However, Hess said the City Council will consider a budget presentation in a special meeting Thursday. The presentation includes the analysis from Management Partners Incorporated, a firm with offices in San Jose and Cincinnati, Ohio.

The analysis states that funding for the Utilities Department is “at seriously low levels.” If rate hikes are not made, the department will see “negative fund balances," according to the firm. 

Kathleen Haley is a staff reporter for The Sacramento Press.