Utilities Department Director Marty Hanneman said Thursday that a new ballot proposal would hurt the city’s ability to provide utilities services. The Sacramento Taxpayers League has proposed a ballot measure that aims to block a 9.2 percent city utilities rate increase.

Hanneman did not comment on the proposal Wednesday, saying through a spokeswoman that he had not yet read it. However, he sent a lengthy e-mailed response to The Sacramento Press Thursday.

Read Hanneman’s response to the ballot proposal below:

The Department of Utilities has the following response based upon an initial review of the proposed language. The City Attorney's Office and others are conducting additional reviews to determine what if any other impacts, including those to the General Fund there might be.

*We take how rate payer funds are used very seriously and we know and understand that rate increases are difficult for many in our community. However rate increases are necessary to sustain our current water, sewer, drainage and solid waste services.

*Just as our customers have noticed an increase in their everyday costs for electricity and fuel, we too have faced those burdens. Additionally, we face increased costs for chemicals, labor, and state and federally mandated programs, such as water meters, and compliance with our permits to operate our water, storm drainage and sewer systems.

*To date, the Department has cut 50 positions, among them were 38 lay-offs, most employees have taken furloughs, and the department has drastically cut discretionary spending.

*The Department's water and sewer funds have little to no operating reserve and the solid waste fund is actually negative. In recent years, fund reserves were used to offset rate increases and to cover increasing costs of service.

*A study commissioned by the City Council by Management Partners has concluded that the City's utility funds are woefully underfunded and that the City has significant infrastructure needs. Without significant increases, Management Partners reported to the City Council today that the Utility Funds and Infrastructure needs pose a "significant threat" to the General Fund.

*To keep rates static at today's rate and to limit future rate increases to CPI would mean drastic cuts to the Utilities services. It may result in:

--Remaining reserve funds being decimated.

--The capital improvement program that rehabilitates and replaces water, sewer, and drainage infrastructure facing severe cuts and possible disbandment. This will mean that infrastructure will be allowed to fail, customers would face impacts of being without water, sewer or drainage service as preventative rehabilitation or replacement work will not have occurred.

--Further reductions to garbage, recycling, and yard waste collection service to every other week or even monthly service.

--Additional layoffs of additional Utilities staff at various levels.