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 a mailer which will soon almost certainly end up in your mailbox, if you have an Oxnard address and if the Post Office carries out its appointed rounds.

 

stoputilityrateincreases

As you can see, the mailer is very emotional, concentrating on the financial impact on families (businesses will be impacted much more), which they say (and multiple sources agree) would be about 60%, or $750 more annually (much higher for bulk users) over the next four years, while omitting the rationale for opposing the rate hikes. When we asked about this, we were told that it’s better to focus on one main idea at a time and explain more after they have peoples’ attention. They likely will, after mailing to all 63,000 known mailing addresses in Oxnard, regardless of whether recipients are ratepayers or property owners. This is a costly undertaking, which they said they were easily able to fund from concerned parties, whom they would not name.

Aaron Starr, also Controller of Haas Automation, the nation’s largest automated machine tool manufacturer and largest manufacturing employer in town, ran for City Council in 2014. Largely unknown then, he placed 4th, but has been gradually attracting more attention since then, via his activities. He ran largely on a platform of fiscal responsibility, lower taxes and clear priorities for the city on public safety and services/infrastructure.

He set up Moving Oxnard Forward (MOF) to address the same sorts of priorities he intended to tackle on the Oxnard City Council.  Their web site identifies priorities such as government “transparency,” minimizing taxes, streamlining business licenses, permits and fees, as well as street maintenance, which was one of Mayor Flynn’s top priorities when he ran for re-election.

The rate increases would impact city utilities for water, wastewater and solid waste disposal.

The city’s proposed capital improvements/major maintenance would require adding debt equal to about half the projected improvements’ cost, with the balance being funded out of rate revenue, with increases, per Dan Rydberg. Rydberg was appointed Utilities Director recently, after serving with the city since 2001, more recently as interim Director. Oxnard Mayor Pro-Tem Carmen Ramirez pointed out at a recent City Council meeting that if increases had been made more aggressively years ago, required debt expansion would likely have been much less.

When we asked at a December City Council meeting why weren’t private options considered for utilities, Rydberg quickly dismissed it, claiming that it would only be  a different way of financing it. After the meeting we asked him whether private firms might be more efficient and he conceded the possibility.

When we asked Starr about city officials who have said at council meetings that the proposed rate increases are a ceiling, which cannot be exceeded and may actually be less. It is our impression that bond raters have already been promised this will occur  Starr told us that is it unlikely that actual rates will be lower and that caveats on page 2 of the rate increase proposal belie their statement. 

So far, the Council has approved this all in principle and given a green light  to proceed with the 1-19-16 hearing and presumably, a vote on the increases. If approved, it could only be derailed by a successful protest vote or subsequent political pressure to reconsider. In the meantime, city staff insist that cash flow and reserves will be inadequate to operate water and wastewater without blasting through reserves, causing financial catastrophe, lowering bond ratings, increasing interest rates, or cutting off credit altogether.

 

The Protest

The full mailer is below. The reverse side (not shown) is the same thing, in Spanish. It contains a ballot to express opposition or support for the increases. Starr hopes to enlist supporters to help stop the increases, which could commence as soon as March.

  • The Oxnard notice of proposed rate increase the Notice of Public Hearing [PDF file] went out last month. Most people we talked to seemed unaware of the notice or the protest ballot.
  • The MOF protest will go to 63,000 Oxnard addresses this week.
  • Still another public forum on the rate increases will be held 6 pm, 1-13-16 at the Oxnard Performing Arts Center at 800 Hobson Way.
  • On 1-19-16, at 6 pm, a public hearing on the rate increases will be held at City Hall at the regular council meeting. Time of hearing uncertain now.

To legally stop the increases would require either:

  • more than 50% of ratepayers or property owners to protest in writing, per CA Proposition 218, we are told. Given that special election turnouts are horrible in Oxnard, something as obscure as as a protest form appearing in a dense city mailer is a long-shot to lodge a successful protest. Enter MOF and thousands of dollars for a campaign to stop the increases., consisting of mailing(s) and political pressure. A rate exercise proposal in Simi Valley recently had only an 8% ratepayer response. Starr claimed that even after the increase, their rates would be lower than Oxnard’s are now. He provided backup to CJ on this.
  • or enough political pressure to convince the City Council to hold off on the increases, address Citizen/ratepayer concerns, or scale down the program to something more financially manageable.
  • Starr pointed out further actions that have been taken before in Oxnard and other jurisdictions, such as a special recall election on council members or replacing them in the next regular election. When questioned did not say he had any plans regarding this.

RateIncreaseMailer

Wastewater

  • Starr said he does not believe that a proposed $675 million new wastewater system/plant is justified. He said  that one of the main justifications given which disputes, was that the existing facility would be inundated by “sea rise” attributable to “Global Warming.” On a recent plant tour, city officials stated that had previous predictions been true, the plant would already be underwater.”  The city’s planning for sea level rise is consistent with other city documents (http://publicworks.cityofoxnard.org/Uploads/Water/CityofOxnard_2010UWMP_PublicDraft_May2012.pdf).  Search for “sea level” in the referenced PDF. By the way: 6001 Perkins Road, Oxnard, California is 22 feet above sea level, according to www.veloroutes.org. The question is, can the existing plant be upgraded in place?
  • He also pointed out a very expensive solar system to be installed at the plant, when there would already generate power from methane salvaged from the treatment process. He mentioned a very expensive backup diesel generating system.
  • He said that on the tour another MOF member was told that a $30 million biotower (a huge tank, with pumps and internal agitator) was basically ruined. But both he and I heard another city employee tell us at a council meeting that the biotower would no longer be required with a new process to be implemented. No officials expressed any disagreement with this.

 

Water

  • In our conversation with Starr and another MOF member, we discussed that very large amounts have been spent on desalination, with very little return to date and possibly a quarter billion dollars is still needed just for the next phase of the GREAT water program.

 

Solid Waste

  • This program is said to be in better shape, with cost reductions in place, adequate reserves on hand and projected and current capital improvements being funded from ratepayer revenues. The city has been replacing worn out collection and hauling trucks at hundreds of thousands of dollars a vehicle.
  • “However, the city wishes to replace/upgrade the material recycling facility with very expensive new sorting/conveyor systems and do some avant guard upgrades for more advanced recycling, all of which MOF says totals about $80 million and which MOF questions.”  See table 4.2.5 of http://utilityrates.oxnard.org/wp-content/uploads/2015/11/Oxnard-Cost-of-Service-Report.pdf for a clearer description of the $80 million.  Interestingly, it includes a $15 million building expenditure, they reference “Fleet maintenance, storage, sorting, welding, thrift store, City Corps”.  It is not clear exactly why in the case of Solid Waste there is a building requirement for a thrift store and City Corps.

 

Oxnard States Its Case

The city has addressed the situation for many months, including an operational audit of all departments, including utilities, engineering reviews of requirements, a long-term plan and financial estimates. they say that the increases are need to support needed infrastructure to provide services and achieve mandated financial management goals.

as previously stated, the city is hosting a community forum on the issue at 6 p.m. Jan. 13 at the Performing Arts Center at 800 Hobson Way. See Oxnard’s rate increase case at http://utilityrates.oxnard.org.  Then, there is also the 1-19-16 public hearing on the rate increases.

The city mailed out this rate increase notice last month. Did you get/read it?

OxnardUtilityIncreaseNotice

 

CitizensJournal.us has published numerous articles on Oxnard rate increases and utilities status which we encourage you to examine.  some below:

City Council – SPECIAL MEETING December 10, 2015 – 05:00 PM View Agenda

More:

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https://citizensjournal.us/page/2/?x=0&y=0&s=utility+rates

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

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William "Bill" Hicks
William "Bill" Hicks
5 years ago

What happens if stopping the rates is successful? What if the City Council Members are correct but this movement is successful?