GRIDLEY, CA (MPG) - The Gridley City Council on Sept. 2 approved a proposal to re-engage Utility Financial Solutions for a follow-up cost-of-service study aimed at evaluating the financial health of the city’s electric, water and sewer enterprise funds. The decision follows a scheduled review of the 2023 rate study conducted by Utility Financial Solutions, which previously informed council-approved rate increases for 2024 and 2025.

“It is time to look to see how close this study was in relation to the rates that were approved at that time by council,” City Administrator Elisa Arteaga said, emphasizing the importance of third-party, data-driven analysis to validate whether the original projections and rate increases have aligned with actual operational costs. 

Arteaga said the review is intended to ensure continued financial stability of all the city’s enterprise funds, particularly as the city navigates rising utility expenses and infrastructure demands.

The study, conducted under an existing Northern California Power Agency contract, will cost $52,000, allocated as $22,000 to the electric department, $16,000 to water, and $12,000 to sewer. 

Concerns were raised about the frequency and cost of such studies, and whether internal staff could provide similar updates using existing data. 

Arteaga clarified that while staff can report fund balances, Utility Financial Solutions offers specialized expertise in rate modeling and reserve planning that is critical for transparent and defensible rate structures.

At the time of the rate increases proposed for 2024 and 2025, the city’s intent had been to adopt a five-year rate plan, but the council opted for a more conservative two-year structure in 2023, prompting the need for earlier reassessment. 

“The City of Gridley has had longstanding structural concerns with all the enterprise funds,” said Arteaga, reminding the council they opted for more frequent monitoring to ensure rates cover the cost of providing services and sufficient reserves are maintained for emergencies and capital improvements. 

Council member J Angel Calderon said he was concerned any further rate increases would negatively affect the community, giving attention to the effect another rate increase would have on senior citizens and low-income households. 

“One of the reasons I agreed to run for office is because some of the people that asked me to run were having a real hard time with their electric bill; they are limited or fixed income, Calderon said. “They are the same people that I am advocating for now.” 

Arteaga said she understood that power increases have been particularly burdensome on everyone, but as operational costs go up with any enterprise, the city must maintain the stability of its services. 

“At the end of the day, it is a business,” Arteaga said. “We are not for profit, but I want to remind (the council) you need to be sustaining it. Power is getting more expensive.” 

The council unanimously authorized Arteaga to negotiate and sign a contract with Utility Financial Solutions, not to exceed $52,500, and encouraged her to explore inclusion of future follow-up services. 

Staff will also prepare a report detailing current fund balances, reserve levels, and the impact of the recent rate adjustments prior to finalizing the agreement. Utility Financial Solutions will collaborate with city staff and Northern California Power Agency engineering support to scope the study and present findings for future rate decisions.