City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-00108 3/7/2023 Consent Item 10.
Sacramento Utility Rate Assistance Program Recommendation File ID: 2023-00108
Location: Citywide
Recommendation: Pass a Motion approving the Budget and Audit Committee’s recommended funding option of maintaining the current discount for legacy customers and implementing a flat 40% discount for the remaining participants in the Sacramento Utility Rate Assistance Program.
Contact: Pravani Vandeyar, Interim Director of Utilities, (916) 808-3765, [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
Presenter: Chuong (Ryan) Pham, Business Services Manager, (916) 808-8995, [email protected]
Attachments:
1-Description/Analysis
Additional Description/Analysis
Issue 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. SURA is funded with Measure U Fund (Fund 2401) with a fiscal year (FY) 2022/23 budget of $4.8 million. The program provides a discount on the monthly flat fee for Water, Wastewater, Recycling & Solid Waste (RSW), and Storm Drainage (SD) services to eligible customers.
Under its current structure of offsetting rate adjustments there are no program limits, which requires DOU to return to Council for budget adjustments if the program participant level increases or if there is a new rate increase. As such, budget adjustments will be required in FY2023/24 and FY2024/25 to support the approved RSW rate increases and due to an increase in participants from 8,500 to 9,121.
File ID: 2023-00108 3/7/2023 Consent Item 10.
Currently, there are approximately 895 legacy customers (in program since 2013) in the SURA Program down from 1,756 over the years. Council requested DOU staff to present sustainable funding options to the Budget and Audit Committee (Committee) and return with a final recommendation.
The Committee reviewed several options and is recommending Council approve a discount structure for current non-legacy participants of a flat 40%, which equals the average discount once all RSW rate adjustments go into effect. They also recommend that legacy customers continue to receive current discounts, which fully offsets rate increases for 895 participants.
Policy Considerations: Modifications to this program must be approved by Council.
Economic Impacts: Not applicable.
Environmental Considerations: Not applicable.
Sustainability: Not applicable.
Commission/Committee Action: SURA Program structural changes were presented to the Water Committee, which recommended that proposed changes be brought to Council for discussion.
Council then recommended this be brought to Committee for review and recommendation. The Committee passed a motion to forward the proposed structural changes to Council for consideration.
Rationale for Recommendation: The SURA Program is currently approved by Council to offset rate adjustments for the monthly flat fee of Water, Wastewater, RSW, and SD 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. As the program is currently structured, it is projected that by FY2024/25 the SURA Program budget need will total $5.6 million with approximately 9,121 participants. However, the participant level can fluctuate and without a participation cap the budget need can also fluctuate requiring DOU to return to Council for budget adjustments. The Committee recommended that Council approve a discount structure for current non -legacy participants of a flat 40%, which equals the average discount once all RSW rate adjustments go into effect. They also recommended that Legacy customers continue to receive current discounts, which fully offsets rate increases for 895 participants. The total estimated costs of the program at the current participant level of 9,121 is estimated at $5.3 million in FY2023/24 and $5.4 million in FY2024/25.
In addition to the structural changes to the program, staff is also evaluating budgeting practices relative to a maximum 10,000-participant level to avoid fluctuations in the annual budget. Any changes will be included in the FY2023/24 proposed budget.
The Committee also directed staff to provide Council with a trend of the legacy participants and
File ID: 2023-00108 3/7/2023 Consent Item 10.
diversity demographics as shown below.
Legacy Participant Account Closure Trends*
Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Accounts
Closed
62 124 345 127 65 42 69 24 1 2
*Currently, there are approximately 895 legacy participants active.
Demographics of Diversity Averages**
Age White, not
Hispanic or
Latino
Black or
African
American
American Indian and
Alaska Native
Asian Native
Hawaiian
and Other
Pacific
Islander
Other
Race
Two or
More
Races
Hispanic or
Latino
Foreign
Born
35 24% 14% 0.3% 20% 2% 0.5% 6% 32% 24%
**Demographic information presented includes all household members in the program and is from the Census Tract.
Financial Considerations: Staff will monitor the FY2022/23 program and if it is projected to exceed the current available budget a recommendation to augment the program will be made to Council.
Local Business Enterprise (LBE): Not applicable.