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Friday, February 10, 2012
Residents to see 9 percent hike in utilities rates
by Kathleen Haley, published on June 23, 2009 at 9:55 PM
Storyline: City Budget
City utilities rates will jump 9 percent for customers in the 2009/2010 fiscal year and 9.2 percent in the 2010/2011 year, the Sacramento City Council decided Tuesday.
The Utilities Department will also need to lay off 38 employees to adopt city budget cuts and because the department needed a rate increase higher than 9 percent, according to the department’s business services manager, Jamille Moens.
The department attributes its financial woes to the recession, increased operating costs and new regulatory and environmental requirements. In addition, rates for city utilities services were not increased in the 2008/2009 fiscal year.
A divided city council approved the rate increases in a 6-3 vote, with Mayor Kevin Johnson and Councilmembers Ray Tretheway and Sandy Sheedy voting against the rate hikes.
Johnson said he could not believe that the department has done everything necessary in order to be efficient.
The 9 percent increases were suggested by Councilmember Steve Cohn earlier this month. Cohn suggested the 9 percent increases in response to the department’s request earlier this month for 12 percent increases.
Cohn said he wanted to see “management of this department really focused on being the most efficient it can be with only a 9 percent increase this year.”
Assistant City Manager Marty Hanneman, who oversees the department, told Cohn it was the department’s goal “to live within our means” and look for ways to be more efficient.
Sheedy, who voted against the 9 percent increases, said people in her district are struggling with rising living expenses. “I have people in my district who just can’t take any more raises,” she said.
The Utilities Department earlier this month asked the city council to raise rates 12.2 percent in the 2009/2010 fiscal year and 12.4 percent in the 2010/2011 fiscal year.
Kathleen Haley is a staff reporter for The Sacramento Press.
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I dont know enough about their financial structure to truly understand their financial plight but i do know that my business is affected by the economy yet i dont get to raise my rates to compensate..I am offended they arent doing more with less as we all have to do .... ( id like to throw smud in that list as well) RT gets a pass as their money is mostly derived from sales tax dollars which are obviously down .. my fiscal conservatism is glaring this week
They can easily trim costs and prioratize the spending budget.
For a private business, for example, you really can't expect to stay in business by charging less for a product or service than it costs to produce or provide.
The city utilities department is trimming costs: staff pay is being cut, positions are being eliminated, including layoffs, programs are being cancelled, and expenditures are being cut. Their expenses have gone up in recent years, due to city expansion and drought, while revenues have dropped due to the recession. The cuts add up to almost $10 million of a $160 million budget, but that was not enough to cover the difference between the fees they took in and the costs of operation. So in order to make their budget in the face of citywide budget cuts, they have to increase fees.
Because staffing and programs are already being cut, the only way to avoid fee increases would be to drop levels of service below acceptable levels--in other words, pick up our trash less often, stop cleaning out sewers, or pipe water into our homes that is polluted. I don't think anyone considers tainted, untreated water or overflowing sewers to be acceptable--and dropping service below a certain level would trigger fines and penalties at the state level, and result in the loss of funding grants for failure to maintain required levels of service.
Take a look at the staff report:
http://sacramento.granicus.com/MetaViewer.php?view_id=8&clip_id=1973&meta_id=179893
This includes a breakdown of the budget and expected costs. The increase in water rates adds up to about $5 a month for someone with a 6-9 room single family home, about $1 a month more for sewers, about $1 for solid waste pickup, about ten cents for street sweeping, and about $1.50 for trash. So while $10 or so may be a lot to some people, I don't think this increase will put anyone out on the street.
Right now all supplies should be costing less, all wages and benifits should be less, and all equiptment should be costing less, all realestate taxs and leases should be lower, therefor any measurable increase in price should be a huge positive shift on ledger.
I am only here 2 years, but the water bill I get is twice as high as Seattle, and about 4 times as much other places I have been, yet I live 2 blocks from a river. Seems odd.. I was quite shcocked to get $105 a month flat water bill for just two people living in an average home.
You live 2 blocks from a river, but if you have noticed river levels and total rainfall, this region is in its third drought year. In addition, the recession and the housing crunch means that a lot of residential and retail properties are vacant, and therefore not paying utility fees, but the infrastructure that provides water and sewer to those locations still needs to be maintained even if it is not in use. So expenses have gone up, quite dramatically, while revenues have gone down. Thus the differential in budget.
I did look at the proposed budget, and compared their revenue to the cost of the program. These increases were passed because $10 million in budget cuts weren't enough to make up the gap. In order to fund $160 million worth of program costs, they need to show $160 million in revenue, and the city can't afford to use general fund money to cover the difference because they're already operating in the red. So they had to increase fees to meet the difference.
Our options are either (a) slightly higher fees, or (b) overflowing sewers, undrinkable water, and big piles of garbage on the streets.
Pick one.
$105 a month water bill? How big is your house? According to the rate sheet, the current rate for a 10-15 room house is $30.02, plus $2.42 for each additional room over 15. Are you sure that isn't your total utility bill?
The "should be" reductions are based on proper leadership of the organization, and if they are not achieving these basic reductions, they are not leading the department properly. They should have also forcasted the need to make these changes years ago, and taken action in 2007.
Our particular company has reduced all overheard to 2001 levels, re-negotiated all vehicle and property leases, and all the other items I mentioned, without raising customers product cost or reducing customer service, so I know it can be done.) Team members are working longer and making less, while we ride out the recession. When things are good, everyone wins, when things are bad, we pull together. The company is of no value to the employees or the community if it cannot exist. Note that suppliers are banging on our door with products a prices lower than we have seen in over a decade, because they too have cut back..
I do not know how a house, occupied or not, would not have a utility bill, as even when empty I am sure someone owns it?
Most people didn't think the recession would be this bad, and droughts are pretty much impossible to predict. The city thought it had a suitable cushion for crises of $50 million, and were criticized at the time for sitting on such a big pot of money without either spending it or cutting taxes, but that turned out to not be nearly enough.
And yeah, over the next two years your total utility bill will probably go up $20-25, as weill mine. I'm sure we will survive it somehow.
Govenrnment is not run like a business, and that says it all.
And laws can change, they do everyday.
I will survice, by cutting that money from my families funding of other needs.