Local Oxnard accountant-activist makes utility rate/policy recommendations

By Lawrence P. Stein

WaterRatesEditor’s note: The new Oxnard Utilities Rates Advisory Panel, (URAP) has created quite a bit of healthy discussion. Even though he previously predicted a trebling of utility rates, he believes that consumers are being outrageously overcharged for water to support what he feels is an overly expensive,inefficient GREAT water recycling program and subsidize large agricultural.industrial water customers. Mr.Stein makes the following recommendations ….

 

A purpose of Session 2 of the URAP meeting held September 2, 2015 was to gather input regarding policy issues. I recommend the following policies.

  • Bonds be issued at a minimum bond rating of BBB+
  • Guidelines be established to determine when utilities rates be lowered (a suggestion from URAP member Mary Ann Larrieu).
  • Reserve Funds for long term capital improvements (Sinking Funds) be invested long term (2 to 5 years) at a rate, if possible, that is greater than the rate the city is paying on its bonds. Sinking funds should be saved at the rate of the depreciation schedule.
  • An emergency reserve fund be established with ½ invested for 6 month terms after a predetermined amount has been set aside in a market rate fund.
  • Reserve Funds that equate to 2 months of working capital be invested for 6 month terms.
  • The meter fee be abolished for the Water Fund.
  • The fee for the Waste Water Fund is based proportionately to water delivered and total cash outflow (including debt service and reserve set aside).
  • A two fee system of water rates be established based upon consumption; the first fee is for operational costs, the second fee is for fixed costs and debt service. In as much there are limited funds set aside for long term capital improvements, operating reserves, emergency reserves and other bond covenants, once these reserves have been stabilized, the fee could be reduced. These cash reserves would improve the bond ratings, reducing the cost to borrow funds.
  • GREAT Water should not be sold at a rate less what it costs to produce and deliver.
  • Production of the 2nd and 3rd skids of GREAT Water production should not be started until the delivery method of first two skids of converted potable water for residential use has been approved.
  • The Water Fund pay the Waste Water Fund the cost of feeder stock.
  • All recommendations from the URAP Committee and URAP members be forwarded to city council and the public prior to study sessions.
  • A joint study session on Prop 218 be conducted jointly by Mr. Saperstein, the city’s legal expert on water issues and a legal representative for the Howard Jarvis Taxpayers Association, an organizations that was recognized by the city’s consultants as an organization that offers a different perspective that those of municipalities. This study session should be conducted prior to rate hearings.

Respectfully submitted,

Lawrence Stein

 

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Larry Paul Stein

Larry Paul Stein

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Larry Stein is an accountant and  former Oxnard Mayoral candidate, who has been following City of Oxnard financial issues for over 20 years.

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Debbie
Debbie
5 years ago

Thank You Mr. Stein for your diligence on behalf of all of Oxnard. I am always impressed with your intelligence and ability to investigate, comprehend, assess and communicate these complex issues!