Oxnard moment of truth coming on utility rate increases- Tuesday
Make plans to participate in utilities rate hearing
By George Miller
On Tuesday 1-19-16 there will be a hearing on the proposed utility increases of 60% over the next few years. The city says that the utilities are underfunded and that service and safety will be endangered if increases aren’t made to fund necessary work. Rate increases have lagged behind cost increases for several years. The proposed increases don’t even include the major future expenses of a proposed rebuild of the wastewater plant and major build out of the GREAT water desalination program, which would presumably jack up rates even higher in the future. Strong opposition has emerged. Both sides urge people to come to the hearing, listen and speak out. The council would adopt the new rates on 1-26-16, unless good reasons not to came up in the interim.
Oxnard info on rates: http://utilityrates.oxnard.org/
Ox-Wastewater-Treatment-Plan-Dec-2015-Print
Moving Oxnard Forward group is opposing rate hike via mailers, 4′ x 8′ signs, telephone calls and speaking at meetings. Signs like this are all over town.
By law, the increase can be stopped if more than half of ratepayers/owners protest the increase. In practice, this is nearly impossible to accomplish. Consider how few people vote in regular elections, far fewer still in special elections. Most people we have talked to aren’t even aware that a rate increase is pending, even though the city and opposition have reached out to all ratepayers on this. But if a substantial number of people protest it and the city still moves ahead with it, there could be significant political repercussions, with elections coming up in November, or even a recall, which has happened in the past under similar conditions.
Simi Valley recently increased rates after only 8% of ratepayers protested. But even after the increases, Simi’s rates are lower than Oxnard’s are now, per Aaron Starr of Moving Oxnard Forward. Oxnard failed to include Simi in its comparative analysis of other cities. Simi also imports much more of its water than Oxnard does.
There is little doubt that there is deferred maintenance, that many positions are unfilled and that expensive consultants are used to fill the gap.
Some people believe that we need rate increases, but not so much, that elements of the proposed projects are unnecessary and that new debt should be minimized. They think the best action might be for the city to scale back its proposal somewhat and/or shift to less debt increase.
Here is the city’s formal rate increase proposal notice, which you can protest, up to 1-19-16: http://www.ci.oxnard.ca.us/Uploads/Proposition-218-Notice-Ballot.pdf
Cover of Oxnard utility rate proposal notice, sent to property owners and ratepayer.
Organized Opposition
While there are several vocal rate increase opponents, such as perennial watchdog activist and candidate Larry Stein, retired municipal financial executive Jim Lavery and former Oxnard Finance Director Phil Molina, major organized resistance to the utility rate increase juggernaut is relatively new and coming from citizen activist group Moving Oxnard Forward, chaired by City Council candidate Aaron Starr, a financial professional who is Controller of Oxnard’s largest industrial facility.
The group sent out its own notice protesting the increase and urging residents to fight it. Their position is that the rate increases are based on some erroneous information and they object to some of what is in the plan. Examples are: questioning the need for a full waste water system rebuild,. which also includes what they say are some unnecessary frills, such as solar power, when methane power is already available. They also object to highly inefficient half billion dollar investments in desalination, which the city plan forecasts only $1.3 million in annual revenues for by 2025.
This is part of a mailer sent out by activist group Moving Oxnard Forward to protest the utility rate increases and solicit help.
Upcoming rate increase hearing
Last night, the Tuesday agenda was posted on the city council web page:
| Name | Date | Agenda | Video |
|---|---|---|---|
| City Council Meeting – Utility Rates Public Hearing | January 19, 2016 – 06:00 PM | View Agenda |
City Manager Gregg Nyhoff, who came on board June, 2014, said that the proposed increases exceed the total of all in his prior career. He said the utility funds are drained of reserves, revenues are inadequate to meet expenses, that bond ratings are as low as BBB, that 30% increases are needed the first year alone, that we shouldn’t have to worry about the wastewater system going down.
Community Forum
A community forum on the rate increases was sponsored by INCO (Inter -Neighborhood Council) this week, but the agenda was totally controlled by the city. Very few INO people even showed up, but it was a good opportunity to see hear the city’s case, eloquently stated by Utilities Director Dan Rydberg. INCO did not give any agenda tome to opposing views, although brief resident comments/questions were accepted. Dan Rydberg responded to almost every one of them.
Utility Director Dan Rydberg presents Oxnard’s case for utility increases at INCO Community Forum. Photo: George Miller/CitizensJournal.us
Nearly 20 residents made some very telling points. Aaron Starr attacked the GREAT desalinization program as a very inefficient waste of money. According to figures he said he got from the city’s cost report, the city will spend at least another quarter of a billion dollars on this program, which they have already spent a similar amount on, to yield $1.3 million dollars a year. This he said is a 200 year payback, not even including operating cost and interest.
Another resident warned to separate “want” from “need’ and said “we don’t need everything proposed or the toilet stops flushing.” She also said it was deceptive to talk about the ailing ($30 million) biotower which is no longer needed anyway. Larry Stein said we’re getting “sloppy seconds” on the GREAT water program and that ratepayer classes are not being charged properly on cost bases, a claim we have heard him make at uncountable city council meetings. He also criticized pumping high-priced desalinated water back into the ground.
A retired Edison employee (Rick Macias?) said that you don’t allow deterioration of infrastructure like Oxnard has and they had failed to maintain it. He said if someone came out and demanded a 60% pay increase they wouldn’t have a job anymore.
Only two people supported the increases: Ventura Resident and Ventura County water official Gerard Kapuscik and city council meeting regular Pat Brown, who both indicated that it was necessary and proper and noted no problems with the plan.
Somehow, part of the Las Posa section of Camarillo is on the Oxnard wastewater system. resident after resident stood up to protest past 200+% increases and asked why they had to pay so much more than Oxnard residents and that the rates weren’t even linked to water usage.
About 100 residents (out of 206,000) came to the INCO Community Forum on utility rate increases at the Performing Arts Center on 1-13-16. Photo: George Miller/CitizensJournal.us
Some past articles:
Residential utility rates explained
By Larry Stein The city of Oxnard operates 3 utility facilities; Solid Waste (Environmental Services aka Trash), Water, and Waste Water (aka Sewer). Each utility is operated as if they were separate businesses. The financial reporting process is tracked through a method known as Enterprise Funds. Revenue is collected together in a combined bill listing […]
Oxnard Holds Utility Rates Workshops
By Dan Pinedo In anticipation of utilities rates increases the city of Oxnard has created a Utilities Rates Advisory Panel, (URAP). The panel is made up of 8 members representing the community from three categories: Business/Industrial, Single Family Residential and Multi-Family Residential. There are 5 alternates. Under the direction of Interim Utilities Director Daniel Rydberg […]
Former Oxnard Finance Director points out inequitable utility rates
By Phil Molina Editor’s note: We published this letter from Mr. Molina to Oxnard officials and “friends” just as we received it. Friends, Mayor, Councilpersons and staff: How much do you like Oxnard? How fairly, equitably and justly do you feel Oxnard treats you? Do you like subsidizing the poor? Do you like paying […]
Oxnard utility rates to go sky-high?
By George Miller For years, the Oxnard utilities staff has been warning us about shrinking water supplies, higher costs, extensive deferred maintenance, obsolescence and expanding demand for water, wastewater and stormwater services. These services are probably as important to the health and safety of residents as are the police and fire departments. After one year of […]
IS OXNARD MAKING FALSE CLAIM TO SELL UTILITY RATE HIKES?
Moving Oxnard Forward IS OXNARD MAKING FALSE CLAIM TO SELL UTILITY RATE HIKES? YOU can stop it! Oxnard’s government is going all out to sell you on proposed 60% utility rate increases that will cost … See entire post on Moving Oxnard Forward: Utility Rates
Private group mounts blitz to stop Oxnard utility rate increase- watch your mailbox!
By George Miller 12-30-15, updated 12:50 pm Aaron Starr, CPA, heads up local activist group Moving Oxnard Forward, which has put Oxnard’s proposed utility rate increase in its sights to defeat. Last week he told us that the increases are likely unjustified, poorly founded and work from some incorrect assumptions, prompting this opposition. Below is part of […]
Tonight’s Oxnard Council meeting (12-10-15): Utility rate increases, protest ballot
By George Miller Utility rate increase is the topic of tonight’s (12-10-15) Oxnard City Council meeting at 5PM in City Hall Council Chambers. After much planning and analysis, the city formulated proposed rate increases for its utilities: water, wastewater and solid waste disposal. They are quite hefty and reflect deferred maintenance, higher costs, poor management […]
3 Oxnard Council meetings this week- Utility rate increases, budget, maintenance asssessment and community facilities districts
By George Miller Due to the year end crunch of business, major financial crisis and utility rate increase proposal, there will be three council meetings this week- tuesday, wednesday and Thursday. Name Date Agenda City Council Meeting December 8, 2015 – 05:00 PM View Agenda City Council – SPECIAL MEETING December 9, 2015 – […]
Oxnard to hold special meetings on utility rate increases, YMCA, on short notice: utility rate ballots mailed
By George Miller At last week’s city council meeting, no mention at all was made that there would be two additional emergency special meetings next week. But in flurry of pre-holiday activity, these were reportedly scheduled, plus ballots to poll residents on utility rate increases were mailed out (we haven’t seen them yet). We call […]
Come to Tuesday Oxnard City Council meeting re: 1st year 56% utility rate increases
By Phil Molina Mr.Aaron Starr, CPA and I spoke today about the Oxnard’s proposed 3 utilities rate increases. We agree that there are issues with those proposed rate increases that are significant so we oppose the rates increases. We ask that you join us this Tuesday to voice your opposition to the rate increases Oxnard is […]
Huge Oxnard utility bill increase possible- please protest
By Aaron Starr Utility bills could soon skyrocket in Oxnard. On October 13 the Oxnard City Council unanimously directed staff to move forward with a process designed to raise utility rates by nearly 65%, an increase of almost $800 per year for an average single-family home. Ratepayers will be mailed an official notice of […]
Oxnard utility increase proposals overstated?
By Phil Molina Concerning the proposed rate increase for solid waste, aka environmental services, the data are insufficient to determine whether it really requires a rate increase at this time. Below you will see the summary chart of 5 years’ audited statements and two graphics showing that the total revenues and operating expenditures have not yet […]
Oxnard municipal financial expert disputes proposed utility charges
By Phil Molina Friends, Elected Officials, Fellow Oxnard utility users: We must not allow this attempt to violate your Proposition 218 and the Appellate Court decisions in order for the City Manager to make good on his promise to the business community to protect them from the required equitable water rate increases. You may feel […]
Local Oxnard accountant-activist makes utility rate/policy recommendations
By Lawrence P. Stein Editor’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 […]
Local Oxnard accountant-activist predicts trebling of water rates
By Lawrence P. Stein Editor’s note: Mr. Stein took the best information he could find and calculated the impact on water projects debt service and rates. The exact timing and amount cannot be known for sure, because it is all based on rough plans, cost estimates, interest rates, transaction timing and even the city’s bond […]
Can tiered water rates be used to encourage conservation?
By Wayne Lusvardi A media firestorm erupted Monday, April 20, over Gov. Brown’s opposition to a State Court of Appeals decision in a water rate setting case involving Proposition 218. The initiative, passed in 1996, requires voter approval for any new property-related utility rates over and above the basic cost of service. Electric rates are […]
Oxnard Bond ratings released
By George Miller The Oxnard City Manager’s office sent the latest wastewater and water bond ratings to us. Download Wastewater Water Bond ratings are closely watched by lenders. While there was a slight reduction in creditworthiness, it won’t have a large impact on ratepayers, rates or the city’s ability to borrow for large upcoming […]
What didn’t happen at Oxnard Council is more important than what did
By George Miller What was NOT addressed at the Tuesday, October 6 Oxnard Council meeting was likely more important than what was. Issues with tens of millions of dollars impact went unaddressed. Dozens of people came to the meeting to hear/talk about the multi (3)-million dollar assessment district fiasco and the high-stakes discussion over huge utility rate […]
Before Council approves a 35% rate increase to your water, waste water and sewer bills …
By Phil Molina Editor’s note: Although this is about Oxnard, it could apply to almost any municipality. Friends, Elected Officials: What should Oxnard citizens expect from the staff and our Elected Officials when they are proposing over 30% increases in water, sewer, and solid waste fees? My suggestion: The process that ought to be […]
Oxnard Council- coastal plan update funding, gang prevention program, budget
By George Miller Name Date Duration Agenda Minutes Video City Council Meeting September 15, 2015 06h 06m Agenda Minutes Video Coastal Plan The Council approved up to $383,358 for Rincon Consultants for preparation of the Comprehensive Local Coastal Program update. It was mentioned that Planner Chris Williamson, who has been critical to the city’s efforts here, […]
Consultant says Oxnard bulk water users undercharged at the expense of consumers
By Phil Molina Editors’ note: Several activists have disputed Oxnard’s water rate structure, claiming that bulk users (agricultural, commercial and industrial) are charged lower rates than consumers and that this is illegal, per CA Proposition 218. A consultant seemed to be in agreement with them at the last Utilities Rate Review Committee, as Mr. Molina referred to […]
Another Oxnard wastewater pumping station breaks down
By George Miller While most of us were enjoying the holiday weekend, a public utilities crew was out in the Labor Day holiday heat today, with feverishly working men and a bucket brigade of tanker trucks to haul away raw sewage. This is station #30, where Channel Islands Boulevard and Harbor Blvd meet. From a distance, it […]
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George Miller is Publisher of CitizensJournal.us and a “retired” operations management consultant residing in Oxnard
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From former Utilities Director Ken Ortega …..
Date: January 17, 2016
To: Honorable Mayor and Members of the Oxnard City Council (via Email)
From: Ken Ortega
Oxnard, CA 93036
Re: Proposed Utility Rate Increases
Mr. Mayor and Honorable Councilmembers,
Rate setting is a completed and emotional process, and I have experienced my fair share of it during my tenure overseeing the City of Oxnard utilities programs between 1999 and 2010.
Simply put, my concerns as an Oxnard resident and ratepayer regarding the proposals before you now can be distilled down to a combination of both false operations & maintenance assumptions, and what I assume are unintentional misrepresentations based on misinformation regarding capital investment needs.
The only exception I would make to this otherwise general observation is that I do agree that the Wastewater Enterprise desperately needs additional revenues to adequately meet both its debt service and reserve covenants which was interestingly enough actually identified starting as far back as 2007, but went ignored.
Therefore, my suggestion would be to proceed with the proposed Wastewater Enterprise rate adjustment for only the amount (adjustment) necessary to adequately address debt service requirements at this time, and postpone any other actions regarding rate adjustments until such time as the following concerns can be addressed:
1. Can’t the proposed Wastewater Enterprise Capital Replacement strategies be better and
more cost effectively accomplished/achieved by leveraging more modern wastewater
treatment technologies that also reduce footprint requirements (eliminate property
acquisition), capitalize on waste-to-energy conversion opportunities, and reduce the
need for additional pre-treatment (capital investment) at the Advanced Water
Purification Facility (AWPF)?
2. Where are all of the supposed Environmental Resources Enterprise savings that were
purported to have been realized through the in-sourcing of what was previously
contract Environmental Resources Enterprise Material Recovery Operations? Weren’t
these huge annual savings supposed to have resulted in the additional revenues
necessary to both cover capital reinvestment costs and provide a degree of rate
stabilization along the way? Shouldn’t the City seriously consider out-sourcing
completely its transfer hauling operations to reduce capital reinvestment needs and
labor costs?
3. Why aren’t numerous existing Water/Wastewater Enterprise capital investments
(including the Automated Meter Reading System, Brackish Water Desalter, Blending
Station No. 6, AWPF and Ferro Pits) being maximized to reduce operating costs, increase
revenues, and leverage technology investments designed to increase operational
efficiencies and reduce labor costs?
They are many more issues beyond the starting three (3) that I’ve listed above that I believe deserve some degree of consideration and evaluation before the City Council unilaterally accepts the doom and gloom predictions being put forth and moves in favor of the recommended actions. I would also go so far as to recommend a comprehensive peer-review of both City staff and Consultants’ myriad of capital improvement recommendations, master plans, rate studies, Proposition 218 interpretations, etc., before progressing any further at this time.
Finally, while I am unable to attend your scheduled Public Hearing next week, I wanted to add my voice and opinions (in writing) to the public debate and conversation.
Respectfully submitted for your review and consideration.
Sincerely,
Ken Ortega, Concerned Oxnard Resident and Ratepayer
The dichotomy with Oxnard is confusing at best. The California State Appellate Court, Oxnard’s Mayor Pro Temp and the City’s Consulting engineers all agree that the water rates must be set by actual costs of providing water services. (See footnote A below, and Jan 9th council meeting closing comments by the Mayor Pro Tem, and the recording of the Utilities rate review committee meetings) Therefore, the city’s water rate increases must be based on actual costs of providing us water services. Well that sounds reasonable.
But yesterday we also read in the Star that Oxnard’s auditors are so perplexed that they are unable to even find documents to prove why $400,000 of taxpayers’ cash was transferred to pay expenses. Further they claim according to the article that there is a $90 million discrepancy between what the city told us Oxnard residence were the correct numbers and what the city told the State Controller are the right numbers just last year. And don’t forget the cash hasn’t been reconciled or balanced since June 2014; now that’s over a year ago. Wow so in my books $90,000,000 is material in any sense of the word; so how can we rely on the numbers the city staff is using to “justify” their rate increase if they can’t even produce accurate financial reports from which they would develop their cost analysis?
But in the midst of this confusion that same city staff want to increase your utility bills by about $750 a year based on WHAT exactly? Financial reports that cannot be verified as accurate?
Or, do you like me you begin to wonder if maybe the city staff is just making up numbers to justify their proposed rate increases violating the State Courts and Proposition 218 and the State Constitution?
Oh I can see the witness list for Howard Jarvis vs. Oxnard utilities rates increases already:
1. Mayor Pro Temp, Carmen Ramirez with the video of her Jan 9th statemet;
2. Oxnard auditors, Eadie and Payne LLP
3. City Utilities Director Rydberg; and
4. City water rates consults Carollo Engineers.
But smart Oxnard will once again spend millions of your tax dollars to pay attorneys to fight it out in court…and lose in the end.
End of “The 2 tails of one city”.
by Phillip Molina
(A) FOURTH APPELLATE DISTRICT COURT OF CALIFORNIA:
” However, the trial court did not err in ruling that Proposition 218 requires public water agencies to calculate the actual costs of providing water at various levels of usage. Article XIII D, section 6, subdivision (b)(3) of the California Constitution, as interpreted by our Supreme Court in
Bighorn-Desert View Water Agency v. Verjil (2006) 39 Cal.4th 205, 226 (Bighorn) provides that water rates must reflect the “cost of service attributable” to a given parcel.3 While tiered, or inclined rates that go up progressively in relation to usage are perfectly consonant with article XIII D, section 6, subdivision (b)(3) and Bighorn, the tiers must still correspond to the actual cost of providing service at a given level of usage.”
George:
Just read your informative article regarding Wednesday night’s INCO Community Forum on Oxnard’s Utility Rate Increases.
For the record, I wanted to clear-up a couple of points you attribute to me.
First, I did not express either support or opposition to the proposed Utilty Rate Increases in Oxnard. That would be presumptuous of me, as I am not a resident of Oxnard, nor do I pay any City utility service bills.
Second, neither my presence, nor my questions or comments were made in any official capacity as an employee of the VCPWA-Watershed Protection District. I was there as a member of the public interested in the subject matter, and exercising my First Amendment rights guaranteed me under the United States Constitution.
Third and finally, if you view the tape of the meeting carefully, you will see that I acknowledged and commended the City for completing a long-term, strategic, utility master plan and cost of services study. Additionally, I asked Mr. Rydberg a question as to the City’s plans to prepare, regularly update, and publish, utility capital investment progress reports and track the return on the public’s investment in the City’s planned utility service capital improvement portfolio via various means (staff reports, performance dashboards, infographics) and deploy on various social media venues (i.e. City websites, Facebook, YouTube, etc..)
As you know full well, whether in the private or public sectors, such seminal strategic planning governance documents are critical in ensuring that best utility services management practices are followed, and accuracy, granularity, and precision in vital-factor information is ensured regarding operational benchmarks and performance management milestones.
Citizens Journal, and you in particular, are to be commended for the ongoing work you do to help the public keep informed regarding these vital utility service matters in Oxnard.