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Wednesday, May 23, 2012
McCarty, Cohn lead campaign against utilities rollback measure
by Kathleen Haley, published on September 28, 2010 at 10:53 PM
Storyline: Sacramento City Hall / Politics
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Two Sacramento City Councilmen are leading a campaign against a November ballot measure that would overturn a 9.2 percent utilities rate increase.
Councilmen Kevin McCarty and Steve Cohn are heading the recently formed campaign to oppose Measure B, the Utilities Rate Rollback Act of 2010. Opponents also created the No on Measure B committee to raise funds for its efforts.
“We don’t think (Measure B) is a good idea for the city of Sacramento,” McCarty said Tuesday. “The bottom line is, it’s going to blow a big hole in our budget.”
The 9.2 percent utilities rate hike began July 1. Council members approved the increase last year.
Measure B would eliminate that rate hike and also link city utilities rates with the Consumer Price Index. The measure states that if the Consumer Price Index increases, then utilities rates could be increased.
However, the measure would also require the public to vote on utilities rate increases that are higher than the inflation rate.
Craig Powell, chairman of the campaign supporting Measure B, said he was “not surprised” that two incumbent City Councilmen “want to protect their power” to control utilities rates paid by Sacramento citizens.
Meanwhile, the Utilities Department has said the measure could harm the department and the public in numerous ways.
Department spokeswoman Jessica Hess said in July that the passage of Measure B would mean the loss of about $15 million in revenue. The city's website also said 80 full-time positions could disappear.
On top of the $15 million, the department expects to face a $7 million rise in expenses including labor, electricity, fuel and chemicals, Hess said in July. If the measure passes, the department anticipates that it would need to immediately make cuts and changes to its levels of service, Hess said. That’s because the department must prepare a balanced budget for the 2011/2012 fiscal year, which begins July 1, she said.
But Powell claimed that city officials are using scare tactics in their communications about the measure.
The Sacramento city clerk’s office confirmed with The Sacramento Press that the No on Measure B committee had formed. The committee’s first fundraising statement is due Oct. 5, according to the clerk’s office.
Powell said the measure’s supporters will also file a fundraising statement with the city clerk’s office on Oct. 5. The Sacramento Press will post that information when it is available.
Both Powell and McCarty declined to disclose recent fundraising information before the statements are due.
The Campaign for Common Sense Utilities, which backs Measure B, has pointed out that the Sacramento County Grand Jury claimed in a Jan. 6 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.
Residents’ utility payments may have been applied to additional programs in the city government, the Grand Jury claimed.
McCarty acknowledged that the city has faced problems with Prop. 218, but said the city is continuing to address those issues. The Prop. 218 problems and Measure B are separate issues, he said.
Read the text of Measure B here.
Photo by Brandon Darnell.
Kathleen Haley is a staff reporter for The Sacramento Press.
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Huh? What? So the city illegally diverted 10s of millions of dollars to non-utility uses, including land for a car dealership. Now the Cohn and McCarty say that utility department will face a $15M budget hole if they can't keep the two 9.2% utility rate increases.
Seems pretty related to me.
The following are just a few examples of misuse DOU funds:
* Natomas Auto Mall land purchase by Department of Utilities (DOU). In 2003 land for the proposed Natomas Auto Mall was purchased with approximately $2,000,000 from the Drainage Fund. As a result, Drainage Fund set-asides for capital improvements, about $400,000 per year, have been discontinued for several years. This means that Sacramento’s drainage infrastructure has been under-funded annually by that amount. There has been no reimbursement for the purchase, which has an estimated present worth of $2,553,000. The purchase was authorized by the city council.
* Economic Development Capital Improvement Program contribution. From 2001
until 2009, $1 million was allocated each year from DOU revenues (Drainage, Water, and
Sewer Funds) to pay for utility aspects of development projects in downtown Sacramento
"when the project couldn't afford it." In one case, these set-asides from ratepayer funds
were used to subsidize infrastructure for a new auto dealership. While not all of the
money was used every year, some of it was. The money relieved developers from having
to pay their fair share of utility upgrades necessitated by their projects. No audit was performed to determine how the money was actually used or what the developers’ fair share would have been.
*The initial decision to divert DOU funds came from the office of the former city
manager. The policy was continued by the present city manager until the FY 2010
budget was being prepared in early 2009. For almost a decade DOU reserves were
allowed to dwindle while the aging infrastructure continued to deteriorate.
Vote YES on Measure B and force the DOU and the City Council to do the right thing!!