Susana Alcala Wood, City Attorney Jorge Oseguera, City Auditor Mindy Cuppy, City Clerk Howard Chan, City Manager John Colville, City Treasurer Budget and Audit Committee Report
915 I Street, 1st Floor
Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-00476 March 1, 2022 Discussion Item 02
T
itle: Sacramento Utility Rate Assistance Program Recommendation Loc
ation: Citywide
R
ecommendation: Pass a Motion: 1) accepting the proposed methodology for SURA Program; 2) accepting the Fiscal Year (FY) 2022/23 SURA Program budget recommendation; and 3) forwarding to City Council for approval.
C
ontact: William O. Busath, Director of Utilities, (916) 808-1434, [email protected]; Chuong (Ryan) Pham, Business Services Manager (916) 808-8995, [email protected]; Fadi Geagea, Program Manager, (916) 808- 4928, [email protected]; Kristy Lai, Administrative Analyst, (916) 808-1403, [email protected], Department of Utilities
P
resenter: William O. Busath, Director of Utilities (916) 808-1434, [email protected], Department of Utilities
A
ttachments:
1-Description/Analysis
2-Sacramento Utility Rate Assistance Comparisons and Projections
File ID: 2022-00476 Discussion Item 02
March 1, 2022
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City of Sacramento
Description/Analysis
I
ssue Detail: The Department of Utilities (DOU) manages the Sacramento Utility Rate Assistance Program (SURA), a rate assistance program for City residents who are income- eligible and meet program requirements. The program provides a discount on the flat-rate portion fee of Water, Wastewater, and Recycling & Solid Waste (RSW) services to eligible customers. Under its current structure, it is anticipated that the program will need a budget increase in Fiscal Year 2022/23. DOU proposes a change to the current program structure to an average flat discount of 36%, which is equal to the average current discount. This would allow the program to be more sustainable and equitable to all participants and would allow the program to remain within its current budget through Fiscal Year (FY) 2022/23 at the average participant level of 8,700. Should the participant level increase, additional budget will be required for FY2022/23.
F
or your information, DOU is currently seeking ballot approval for a new Storm Drainage fee. If the effort is successful, DOU will return with a recommendation to include the new fee in the SURA program. It is estimated that this will result in additional budget need of approximately $220,000 annually under the proposed structure and $602,000 annually under the current structure.
P
olicy Considerations: Modifications to this Council approved program must be approved by City Council.
E
conomic Impacts: Not applicable
E
nvironmental Considerations: Not applicable
S
ustainability: Not applicable
C
ommission/Committee Action: This item was presented to the Water Committee, who recommended that these proposed changes be brought to Council for discussion. City Council then recommended this be brought to Budget and Audit Committee for review.
R
ationale for Recommendation: Currently, customers participating in the SURA program receive discounts on their Water, Wastewater, and RSW service fees. These discounts equal rate adjustments that have occurred for most participants since 2016 and rate adjustments that have occurred since 2013 for legacy participants. Under its current structure, it is anticipated that the program will need a budget increase in FY2022/23 of $555,547.
File ID: 2022-00476 Discussion Item 02
March 1, 2022
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City of Sacramento
Staff completed a detailed analysis (Attachment 1) that compares current SURA discount rates to discount rate programs of several surrounding cities and jurisdictions, the City’s current program compared to the proposed program, and the program needs.
C
urrent discounts for the SURA program range from 34% to 52% of Water, Wastewater, and RSW service rates with an average discount of 36%. Under its current structure and considering an average participant level, it is anticipated that the cost of the program in FY2022/23 will be $4,328,267. The current approved budget allocation is $3,772,720 in FY2022/23, resulting in the need for a budget increase.
T
he General fund will receive 11% of the RSW rate increases adopted in FY2021/22 which will help offset the additional cost of the SURA Program.
D
OU staff recommends changing the monthly SURA program discount from the current rate structure to a flat amount for all participants. This discount is based on 36% of the flat-rate portion of services billed for Water (1-inch meter), Wastewater (6-7 room count), and RSW (recycling, yard waste, street sweeping, and 60-gallon garbage container). On December 14, 2021, City Council directed staff to bring forward a recommendation to the Budget & Audit Committee with the intent to maintain the program’s current benefits to participants. Staff have determined that the proposed discount is more sustainable, equitable, and exceeds similar discounts offered by surrounding cities and jurisdictions (Attachment 1).
Fi
nancial Considerations: If the Budget & Audit Committee accepts and forwards the recommendation to Council to adopt the proposed structure, Staff will recommend a budget adjustment at a later date. It is currently anticipated that the program will require additional funding for FY2022/23.
L
ocal Business Enterprise (LBE): Not applicable
Attachment 1
SURA Comparison to Surrounding Cities and Jurisdictions Entity Discount
SURA (Water, Wastewater & Solid Waste) (Proposed) 36%
City of Stockton (Senior Citizen Discount) 10%
Roseville Electric 15%
Los Angeles Department of Water and Power 15%
Family Electric Rate Assistance Program (FERA) 18%
California Alternate Rates for Energy Program (CARE) 20% City of Elk Grove (Storm Drainage & Solid Waste) 20%
City of Palo Alto (Electric, Gas, Wastewater & Water) 20% California Alternate Rates for Energy Program (CARE) 20% Silicon Valley Power 25%
City of Santa Clara (Water, Wastewater, Solid Waste, & Electric) 25%
FY2022/23 Comparison of Current and Proposed Monthly SURA Discounts
Discount Structure Water Wastewater Recycling & Solid Waste Total Discount Proposed – 36%
(8,700 Participants) $ 12.86 $ 11.39 $ 17.40 $41.65
Current
(7,400 Participants) $ 21.22 $ 9.23 $ 12.74 $43.19
Current - Legacy
(1,300 Participants) $32.60 $16.91 $13.80 $63.31
FY2022/23 Total SURA Program Need for Current & Proposed Discount Structures, Including Administrative Costs Participants
Total Program
Cost - Proposed
Structure
Total Program
Cost- Current
Structure
Difference
8,700
(Annual Average Participant
Level)
$3,757,551 $4,328,267 $570,716
9,000 $3,910,153 $4,486,413 $576,260
9,500 $4,160,476 $4,745,976 $585,500
Note: A small number of participants do not receive all three services (Water, Wastewater, and Recycling & Solid Waste) from the City of Sacramento. Therefore, they do not receive the full discount.