Oxnard 2-1-17 Utility Ratepayers Panel meeting again contentious, but progressing, schedule slipped

By George Miller & Dan Pinedo

Introduction

The Wednesday 2-1-17 Utility Ratepayers advisory panel meeting (agenda) was again contentious. City staff members and consultants are getting their presentations done and releasing more data needed for the Panel to evaluate the rate setting process and subsequent recommendations. However, three Panel members are opposing staff control of the meetings, claiming  that legally and logically they should be running the meetings, disputing some data presented and demanding some info  that staff is declining or delaying to provide. Staff seemed to be put off balance by questions and exceptiions taken by some Panel members. Some audience members seemed angry about the management issues and lack of answers to questions and exceptions to staff, which were recorded on a flip chart. Some seemed to support staff’s approach, including two of the seven Panel members.  Whatever process finally evolves here will likely become a  template for the upcoming water and solid waster rate-setting processes.

Oxnard Wastewater Treatment Plant

Background

Last year, a wastewater rate increase approved by the Council was opposed by voters, who passed Aaron Starr’s (also a Panel member) “Measure M” with a 72 % majority, mandating a rescission of 87% rate increases over 5 years. The City is fighting this in court and obtained a stay on the increases until new rates can be set or the measure’s legality is successfully challenged.  City Council established a ratepayer panel which was supposed to oversee the process and provide some input. It didn’t work well at all last year. The city doesn’t seem to be handling it much differently now and there are protests from several panel members and the public.  It does seem like a tall order for panel members to become familiar with a dizzying array of technical, financial, operational and legal information, then opine effectively after just a few 3 hour meetings and not much time to assimilate all the info. There is more background on this issue in past CitizensJournal.us articles

Event video by Dan Pinedo
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This Meeting’s objectives were:

C. PRESENTATIONS ON THE FUTURE NEEDS TO MAINTAIN AND UPGRADE THE CITY OF OXNARD’S WASTEWATER TREATMENT PLANT AND SEWER SYSTEM

1. SUBJECT: Condition Assessment of the Wastewater Utility as presented by Carollo Engineers

2. SUBJECT: Wastewater Utility Proposed Capital Improvements as presented by AECOM

3. SUBJECT: Respond to questions by Utility Ratepayers Advisory Panel (URAP) members at the URAP meeting on January 25, 2017

4. SUBJECT: Review updated URAP meeting schedule

 

Meeting proceedings

Panelist Nancy Lindholm, was unable tyo attend so Asst. City Manager Ruth Osuna substituted alternate Barbara Macri-Ortiz. Aaron Starr disputed that claiming that : 1)- Alternates should be deployed only if panelists leave and 2) that she was not the first designated alternate. He told us he believe that staff was trying to stack the Panel with those more sympathetic to the City position. Osuna said: We had a discussion with Barbara and Frank and this is the way we’re going to do it.

 

Answering Panelist questions

Osuna said they tried their hardest to get all the Panel questions answered but were not able to.

Asst. City Manager Jesus Nava: Oversees Info Tech, HR, Finance, Cultural Arts. Worked on Starr info request list. Completed CAFR will be available for presentation next Wednesday. Other questions: Copies not available (Starr said  said posted 5:55 PM today- no chance to revie.  Utility revenue will only be used for the purpose for which it is collected. Fees collected will not exceed that amount. Debt coverage- min level 1.25 or other as established. Bond covenants vary. Reserves: strive for cash reserve of at least 90 days ops and maintenance funds + 1 year of depreciation total amount. Treasure Phil Molina, in a2-61-17 email had a different view on how to compute bond coverage: PRR at the Utility Rate Review Committee

Nava said that City resolution 14887 1-16-17 specified the above He said that compliance improves credit rating, interest rate and fees paid  He added that City resolution 14952 calls for a capital planning horizon of 5 years. More on rate covenants in the City handout packet with the agenda in the link below.

From the large number of vacancies on the organization chart supplied, currently 21.54, one could see why the baseline data might need adjustment. However, some of that was backfilled with consultants.

There are some discrepancies in the wastewater volumes processed. To begin with, the drop-off in volume doesn’t look as great as we were led to believe at City Council meetings. In addition, Starr says there are discrepancies even among Wastewater Division numbers. Some of these might be related to input volume vs internal plant volumes, which might included some reprocessing.  Current volumes average a little under 19 million gallons/day, according to info presented on 2-1-17.

Status of open questions: Pending URAP Questions

 

Financial

CFO Jim Throop presented a more detailed look at Wastewater Div. finances than he did at the last meeting. One point he made early on is that the fund is running deep in the red (see chart below):

He also pointed out that reserves have dropped a million and a half dollars and that some are allocated only for system expansion.

Wastewater debt is about $111 million:

It is likely that much more debt will be required to bring the system condition up to an acceptable level. Right now, there is much disagreement about what and how much is required to be done. It doesn’t seem like the panel is in much of a position to dispute the consultants’ condition assessments. We haven’t seen the estimates yet, but tere arte some rough figures in this meeting’s presentation materials. But in any case, most are not backed up with actual proposals.

Panel member Elzinga asked why debt service has increased by $6 million.

Oxnard CFO addressing attendees/Panel at 2-1-17 Ratepayers Advisory panel meeting. Photo: Frame grab from Dan Pinedo event video

Wastewater Management

Wastewater Manager Ng Thien said that there ate 81.47 approved positions, with 21.57 vacant right now. Aaron Starr asked how many are really needed and really will be funded. Ruth Osuna said they are budgeted for 80.

He addressed how efficiency is being increased: procurement agreements (claims savings of $350,000), operational procedures, process improvements for primary treatment and update of superannuated, malfunctioning automated process controls (takes longer, needs capital $).

Thien predicted flow rates of 18-19 million gallons/day– up a bit.  Starr questioned the accuracy of historical numbers. Revenue is a function of water usage. Flow rates are related to water usage, but not all water used ends op in the wastewater system. Starr asked how much of a volume increase would cause a problem. He said these numbers are different from what was presented at the Utilities Task force by 3mm gal daily. Thien explained that the task force numbers are total internal volume processed, which is higher.

A resident asked why business rates are different. Some businesses pre-process their wastewater before sending to the city. Volumes affect rates, too. He later asked if if oil industry customers reimbursed the city for corrosion that they caused to the system. No answers were forthcoming.

Thien only alluded to capital projects but did not discuss them

 

Condition of Wastewater facilities

Tracy Clinton of Carollo Engineers addresses panel at 2-1-17 Oxnard URAP meeting. Photo: Frame garb from Dan Pinedo event video.

OWTP (Oxnard Water Treatment plant), lift stations, buried piping, seismic evaluation, cathodic protection system. Evaluated on a scale of very good, good, poor, very poor.  They created  a matrix of vulnerability and critically, with components both highly vulnerable and critical to the system as the highest priorities for refurbishment or replacement.

Requiring significant improvement: Primary Sedimentation Tanks • Biotowers • Digesters

Mechanical Assets – In general, mechanical assets at the OWTP are in fair condition with some exceptions – Process areas requiring the greatest attention include • Activated Sludge • Biotowers • Digesters • Dewatering (Belt Filter Presses)

Lift stations- 9 of 15 require significant work,. 6 were recently rehabilitated.

 

Buried piping

There seems to be a lot of unknowns about the piping (part of collection) system with respect to age and condition. Starr postulated that Oxnard was planning for a worst case scenario for budgeting. City Manager said that some video inspection has been done and they have some idea of what the “hot spots” are.  Thien says that inspections are ongoing and that records are kept.

 

Seismic Evaluation

Project team assessed 18 buildings and 8 water-retaining structures, assessed for code compliance, functionality and ability to sustain mission critical performance.

Seismic Findings of the 8 WaterRetaining Structures • Six recommended for structural retrofits • One recommended for replacement • One recommended for pre-stressing evaluation • All recommended for further concrete condition assessment •  four water-retaining structures recommended for replacement

For all buildings, 10 recommended for replacement and 9 for retrofits.

Cathodic pipe protection

Wastewater Treatment Plant –

220 Test stations • 26 Meet NACE Standards for cathodic protection • 194 Do NOT meet NACE Standards for cathodic protection W

Capital Plan

A capital plan was presented showing extensive work needed to replace about 40% of the plant. Some were as emergency or reliability projects. No time table or proposed budget/financing were proposed. Previously about $550 million was proposed over a 30 year period. More recently a two year and 5 year time horizon was discussed, but there was talk that at least a 5 year horizon is needed.

Starr pointed out that much of the work proposed appears to be outside of the 5 year planning horizon.  The consultant and Osuna said all projects must be presented in context to hep understand what has to be done in the 5 year horizon. When Starr attempted to discuss this, Osuna abruptly interrupted him and plead meeting schedule problems. The consultant said $115 million would be spent over 5 years. We didn’t see this in the agenda packet.

Utilities Director Dan Rydberg said that this is not the same as the last master plan.

What is needed is a rate model projection, showing the financial impact of proposed scheduled operations and maintenance; capital improvement, reserves replenishment, debt service and probable commodity cost escalation. Some panel members have called upon staff to provide the rate model to run simulations. Staff has resisted this.

 

  • May add more to this report as time permits

 

Aaron Starr Handouts and info

Aaron Starr and Alicia Percell had been studying the wastewater situation for over a year and have a lead over the other Panel members. Starr has been intensely questioning and sometimes challenging staff and consultant data/assertions. He provided some handouts at the meeting which were given out at the meeting are attached  here:

2017_02_01 Starr Handouts to URAP

2017_02_01 Aaron notes on staff

 

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Other notes

The dispute over Panel management is symptomatic of some residents’ complaints about the City’s management of business, lack of consideration of residents’ positions and general openness and transparency. In spite of Council Members’ frequent invoking of transparency as an ideal, some decry what they say is failure to achieve this. That battle is also raging in the Treasury Dept., where new Treasurer Phil Molina’s efforts to make operations transparent to the public are receiving opposition from the City Attorney and some others in City government.  They say that confidentially and Brown Act considerations forbid some of this. Molina has fired right back with what appear to be strong arguments- but we aren’t attorneys.

 

Assistant City Manager Ruth Osuna comments

In response to our inquiry to Ms.Osuna, Delana G. Gbenekama, Public Relations and Community Affairs Manager, relayed her message to us via phone:

The URAP is coming along fine; the Panel members are engaged; setting rates can be very complicated; City staff is committed to making sure that Panel members have all information needed to make informed and thoughtful recommendations to the City Council; for now the Panel is on schedule.

Ms. Gbenekama added that the proposed rate discussion will not take place next week.

 

This memo: ( URAP Memo 020317 ) to the Council and key staff from Ms. Osuna explains further the postponement of the rate recommendations. Basically, they blame it in part on  the panel asking too many questions and the resultant realization that better preparation is needed. This seems good. We need to be careful in making value judgments, but they mostly seemed like very reasonable questions, most of which should have had answers already waiting. One of the main values of the panel is to see if the rate-setting process is perceived by the panel as reasonable and comprehensible. If so, then it is more likely that the public will accept it and more likey that it is in fact reasonable. Presumably, the Council selected reasonable and intelligent people for the panel

 

Comments by CJ Reporter/videographer Dan Pinedo

Oxnard’s new Utility Ratepayer Advisory Panel met on 2-1-2017 in another contentious session. New Assistant City Manager Ruth Osuna facilitated the panel meeting. The meeting, which was schedule to last 2 hours, went on beyond 3 and a half. This came about as the result of a barrage of questions accompanied by financial data handouts by Mr. Aaron Starr. Numerous times he requested clarification and at times disputed the presentations data. The intense inquiries culminated into Mrs. Osuna suspending immediate response to questions, and instead resorted to writing them down on an easel board for future response in the interest of time. The meeting ended with final exchanges between Mrs. Osuna, Mr, Starr and Miss Barbara Macri-Ortiz stemming from a tour of the wastewater facility. The tour was announced as a special meeting which required 24-hour notice, to which Mr. Starr claimed her didn’t get. The question remained whether it fell under the provisions of the California Brown Act or not.

 

Status of Panel questions to staff:

Pending URAP Questions

URAP Panel Questions from 1/25/17 URAP Meeting The following are questions or requested items from the URAP panelists at the 1/25/17 URAP meeting; this list does not include the additional list of questions from Mr. Aaron Starr, which are listed separately: 1. 12 months (actual costs) 2. Prior year comparisons 3. Vacancies in Public Works 4. Actual Costs incurred 5. Revised full-year numbers, not just through November 6. Detailed expenditures 7. 3 years of comparison (FY 13-14, 14-15, 15-16, 16-17 projection) 8. Models for internal services 9. Does City’s debt coverage policy exceed requirements? 10. Past reserves totals for City 11. Pass throughs/Escalators 12. Inflation/Overview of Ordinance 13. Pass through factors 14. Discussion of volume/usage 15. Rate Models – February 8th 16. Layperson’s explanation of debt coverage policy 17. How are the funds being spent? 18. How are we increasing efficiencies? a. Meter readers 19. How can URAP provide input?

 

Note: we have not yet heard back from  City Manager Greg Nyhoff and Utilities Director Dan Rydberg on our requests for comments.

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Live stream of Feb. 1 Utility Ratepayers Advisory Panel Meeting: www.ustream.tv/channel/oxnardnews. Click here to view the agenda.

Dan Pinedo meeting video: https://www.youtube.com/watch?v=Y4pX5YKpel8&feature=youtu.be

Utilities Task Force – Utility Ratepayers Advisory Panel Feb 1, 2017 00h 01m Agenda   Video

 

A special 5 PM Monday, Feb. 6 meeting of the Utilities Task Force will be held in Council Chambers at 305 East. 3rd St

E.  NEW BUSINESS

1. SUBJECT: Discussion regarding use of a facilitator at URAP meetings RECOMMENDATION: That the UTF 1) decide on whether to use a facilitator or a Chair for the URAP meetings; 2) if a chair should be selected, determine the role of the Chair; 3) and if a chair should be selected, determine the process to select the Chair; and 4) if a chair should be selected by UTF appointment, appoint that chair.

2. SUBJECT: Discussion of the procedure of the URAP Meetings RECOMMENDATION

 

Oxnard Fiscal Policy Task Force Meeting 1-11-2017 video by Dan Pinedo

 

Upcoming Wed. Feb 8 URAP meeting agenda

http://oxnard.granicus.com/DocumentViewer.php?file=oxnard_d276091713ada0e76282f075c10b1bbc.pdf&view=1

Key meeting Feb 8 discussion items:

E. NEW BUSINESS 1. SUBJECT: Discussion regarding use of a facilitator RECOMMENDATION: That the URAP 1) decide on whether to use a facilitator or select its own Chair 2) if a chair should be selected, determine the role of the Chair; 3) if a chair should be selected, determine the process for selecting the Chair, and; 4) if a chair should be selected, select the chair.* *The UTF may make a decision on any or all of these items at its special meeting on Monday, February 6, 2016. If so, the URAP will only discuss those items the UTF does not determine. F. PRESENTATIONS 1. SUBJECT: Respond to questions by URAP members at the prior URAP meetings 2. SUBJECT: Review of the Infrastructure Use Fee 3. SUBJECT: Review of the planned CIP Projects 4. SUBJECT: Discussion of a Ratepayers Assistance Program G. PANEL DISCUSSION URAP members may have further discussion on listed agenda items after public comments

 


Here’s an example of an analysis by a Panel member, presenting a 5 year ($62,145,064) ad 10 year capital improvement plan
Please find the attached spreadsheet provided by URAP panel member Richard Elzinga for the URAP review:and 10 year capital improvement plan.

RELZINGA_Projected costs_02022017

 

Public Record Request Document Previously Provided: Monthly Revenue for Water and Waste Water

See previuous report: Water Usage Public Record Request

By Larry Stein

Please note the public document previously provided Monthly useage of Water and Waste Water.  Please run this report for January 2015 through December 2016. I have asked for this information January 19th 2017 as well as the Monthly Expenditure reports for the same time frame for the Water and Waste Water Enterprise Funds. Please make available the Monthly Expenditure reports for the same time frame for the Water and Waste Water Enterprise Funds.

 

Oxnard Wastewater Master Plan

 

Last meeting:

Oxnard Utility Ratepayer Advisory Panel meets on Wastewater, clashes with staff

Oxnard Utility Ratepayer Advisory Panel meets on Wastewater, clashes with staff

By George Miller- Oxnard’s new Utility Ratepayer Advisory Panel met On 1-25-17 in a sometimes contentious session (Read Agenda meeting docs and Video). Next meeting is 2-1-17.The new Asst. City Manager Ruth Osuna had the unenviable assignment of facilitating the Panel. By some accounts, last year’s panel failed miserably, and helped lead to the present stalemate on rates. It culminated […]

CitizensJournal.us thanks Assistant City Manager Ruth Osuna, Kyron Johnson, Panel members Richard Elzinga, Aaron Starr and Alicia Percell for their input to this article .

Dan Pinedo is a photographer/videographer residing in Oxnard

George Miller is Publisher of CitizensJournal.us and a “retired” operations management consultant residing in Oxnard


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One Response to Oxnard 2-1-17 Utility Ratepayers Panel meeting again contentious, but progressing, schedule slipped

  1. Citizen Reporter February 6, 2017 at 7:22 pm

    A meeting of the Utility Task force was held tonight, 2-6-17, to decide if the Panel should have a Chair and run the meetings instead of the current facilitator. After hearing from some public speakers and discussing it, the Task Force decided to allow the Panel to decide whether they wanted a Chair or continue with facilitator and to elect a Chair if they decided to. Both Task Force members (Mayor Flynn and Councilman Perello) prefer a facilitator.

    Reply

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