Sacramento residents won't see monthly utility rates drop next summer after voters overwhelmingly rejected Measure B at the polls Tuesday.

The initiative to roll back the city's rates for water, garbage and sewer services was failing by more than two to one late Tuesday night. With 287 out of 355 precincts counted, 41,328 – or 68 percent – of voters chose to stick with higher fees as of 10:55 p.m.

More than 19,000 voters, or nearly 32 percent, had voted for the Utilities Rate Hike Roll Back Act of 2010 sponsored by the Sacramento County Taxpayers League, according to Sacramento County's elections department.

The measure's opponents believe a rate decrease would have been a "risky approach" that ultimately would have led to the neglect of utility infrastructure, Sacramento City Councilman Steve Cohn said. He led a "No on Measure B" campaign with Councilman Kevin McCarty and local union leaders.

Sacramento voters know they have other avenues to bring about change in the city, he added.

"I think the tea party sort of anti-government, anti-tax (movement) – it doesn't have as strong an appeal in the city of Sacramento. Or, for that matter, it doesn't seem to have that much appeal in the state of California," Cohn said. "I think people realize they don't have to resort to a drastic measure like Measure B to have an impact on local politics."

In June 2009, the City Council had approved two rate increases totaling more than 18 percent.

The league filed the ballot initiative in February, a month after a Sacramento County Grand Jury issued a report saying the city and the utilities department may have diverted more than $21 million in utility revenues to other city programs supported by the city's general fund. The report also said utilities ratepayers may have paid for more than the cost of the utility services provided.

Measure B sought to revoke a 9.2 percent rate increase approved by the council. The measure also required voters to approve future rate increases that are higher than annual Consumer Price Index increases. The rate decrease would have taken effect in July.

Supporters blamed confusing ballot language and heavily financed opposition by city employee unions, contractors and city officials. Exit polls indicated voters were confused about whether a "yes" or "no" vote would roll back rates, Yes on Measure B Chairman Craig Powell said Tuesday night at an election night party in Curtis Park.

"Measure B was severely handicapped by ballot language approved by the City Council that was incomprehensible to voters," said Powell, who is also the league's attorney. "It was a cynical attempt to manipulate the electoral process. From early returns, it looks like that attempt was successful."

The taxpayers league raised about $60,000 to support the initiative. The No on Measure B campaign raised at least $170,000, Cohn said.

Plumbers and Pipefitters Local 447, led by Harry Rotz, and the California Building and Trades Council each contributed at least $50,000. Other unions and contractors also contributed to a fund that paid for mass mailings, radio ads and campaign signs against the measure in the final weeks of the campaign, Powell said.

Tuesday afternoon, Mayor Kevin Johnson said he opposed the measure. The Utilities Rate Advisory Commission, a citizen’s group that advises the City Council on utilities rates, also opposed Measure B.

Supporters believe their campaign for Measure B convinced other City Council members to join Johnson in calling for an audit of the department. Supporters also believe the campaign will encourage city officials to be more conservative when considering future rate hikes, he said.

"That's the beginning of reform," Powell said, promising to hold city leaders accountable for fixing the utility department's problems. "We're not walking away from this issue."