Sac ratepayers revolting?

Would Measure B force fiscal reform or endanger basic city services?

Craig Powell shows you can fight City Hall, but critics say his Measure B would blow a hole in the city’s budget.

Craig Powell shows you can fight City Hall, but critics say his Measure B would blow a hole in the city’s budget.


Depending on who you ask, Measure B would put the city on a much-needed fiscal diet and bring the public-employee unions to heel—or it would devastate some of the city’s most basic and indispensable services.

Local gadfly Craig Powell and his allies created Measure B, which Sacramento residents will vote up or down on November 2, in response to two big rate hikes on Sacramento sewer, water and trash bills in the last two years. There was a 9 percent hike in the summer of 2009 and a 9.2 percent bump this summer.

“You have to be pretty callous to inflict that kind of pain on your citizens in the middle of a recession,” Powell told SN&R. Measure B would cancel that last rate increase, and prohibit the city from future rate increases that are greater than the rate of inflation.

Powell has picked a political sweet spot for his rate revolt. Many political observers expect conservatives to come out to the polls in force in this election, the last of the year of the tea party.

And Sacramentans have been pretty angry about a couple of mini-scandals in the city’s Utilities Department. First was the case of the missing water meters, which made headlines for weeks. (The water meters hadn’t been spirited away, the city just didn’t do a very good job of keeping track of where they’d been installed. The meters are now accounted for.)

Much more serious was a grand-jury report that found the Utilities Department had improperly diverted utility rates to the city’s general fund—a violation of state Proposition 218, which says utility rates can only pay for providing utility service and related programs.

Powell characterized the diversions as “fraud upon ratepayers.” Department officials denied any wrongdoing, but have been directed by the city council to return the money.

Powell, on the board of the Sacramento County Taxpayers League, and others found it fairly easy to gather enough signatures to qualify the measure for the ballot. State law provides lower thresholds for utility-rate rollbacks than for other types of initiatives. So the group needed just 5,800 signatures to put the measure before voters on November 2.

But critics say the measure could have a big impact on city services.

“Do we want to have first-rate infrastructure, or do we want to give that up?” asked Rob Kerth, who is executive director of the Midtown Business Association, as well as a board member for Sacramento Municipal Utility District. “I mean, just how Third World do we want our infrastructure to be?”

According to the city, some of the possible impacts: The Utilities Department would take a $22 million loss. The city’s general fund would lose $2 million in revenue from the utility tax that the city levees on your bill.

The department estimates that it would have to fire 80 to 100 employees from a staff of about 650 people. This would likely lead to reduced services, said Jessica Hess, spokewoman for the city Department of Utilities. “We might have to go to every other week recycling pickup, or less frequent yard waste pickup.”

But the bigger impact would be on the maintenance and replacement of Sacramento’s aging infrastructure.

SMUD board member Rob Kerth says greed is behind Measure B.

“We have pipes in the ground that are 80 to 100 years old,” said Hess. “Most of those pieces have a useful life of about 50 years.”

The city routinely replaces the oldest pieces as it is able to. But a slowed-down maintenance and replacement schedule increases the chances of a “catastrophic failure.”

“If the city’s Department of Utilities does not have enough to repair something like that, then the general fund would have to cover it,” Hess explained.

Powell says this list of potential horribles are merely “scare tactics.”

“We’re talking about returning rates to what they were 9 months ago,” he added.

He says the department could avoid many of the worst impacts by forcing the city employees union, Local 39, to renegotiate wages and benefits increases for department employees.

“Measure B is going to force the city to finally impose some budget discipline on this department, which has been without discipline for so many years,” said Powell.

So far, Powell is listed as the sole donor for Measure B, though new campaign-finance reports are due out next week. According to the most recent city records, Powell has contributed $23,000, about $13,000 of it in loans. He says most of the money went into the signature-gathering campaign.

Powell has a history as something of a rabble-rouser. He’s been accused of mounting a takeover of the Land Park Neighborhood Association board—he’s since left the board. He also managed to kill a streetlight assessment district in the Curtis Park and Land Park neighborhoods. One of the tactics Powell and his supporters used was to show up at a city council meeting, waving tea bags in protest. That was in 2007, and Powell says it wasn’t associated with the today’s tea party movement.

His wife, Paige Powell, is trying to unseat incumbent Ellyne Bell on the board of trustees for the Sacramento City Unified School District. Powell is expected by many political observers to win the endorsement of Sacramento Mayor Kevin Johnson, mostly because Bell has teachers union support and has been critical of Johnson’s Sacramento Charter High School, and of the mayor’s desire to get more involved in school-district policies.

So far, there’s been little organized opposition to Measure B, though observers expect some local labor unions, such as Local 39, and the local plumbers unions will put up some cash in the final stretch.

Meanwhile, Powell is accusing city employees of improperly using city resources to campaign against the measure. His group has complained that fact sheets and charts disseminated by the city Department of Utilities about Measure B have been purposely misleading. He said his group is planning to file a complaint with the Sacramento County grand jury and may file a lawsuit regarding the city’s “de facto campaign against Measure B.”

Powell also says the city attorney purposely wrote language for the ballot measure that was intentionally confusing. “They know that a confused voter is a ‘no’ voter,” Powell explained.

But Kerth said he thinks voters will reject Measure B when they learn more about its impacts. “What I think we’re really witnessing here is good old-fashioned greed,” he said. “Some people don’t believe in shared burdens.”

He added utility rates are reflective of the costs of providing these services, and are similar to the utility rates in most other cities in the region. Kerth conceded that the Utilities Department may have shot itself in the foot with the water meter and rates diversion flaps. “Politically, the city is out of position because they were goofing up.”