The Not-So-GREAT Oxnard Water Recycling Facility


Oxnard wants to raise your city utility rates by 60% so that they can spend $1.23 BILLION on capital improvement projects.  Many of these so-called “improvements” will not provide value to ratepayers.

For example, according to pages 14-15 of the cost-of-service report produced for the city by outside consultants, $254 million of that is proposed to be spent to expand the water recycling facility, dubbed by the city as the “GREAT Program”.

The city has already spent more than $200 million to build the facility (that’s at least $5,000 for each of the 40,000 ratepayers).  We are now in a drought, and the only thing the “GREAT” facility does is water the grass at the city-owned golf course (another money losing venture) … and we don’t even charge them for this water.

We don’t think Oxnard’s poor residents should pay for green grass for golfers, and it’s even more insulting while their own grass is brown.

Now the city proposes to pay another $254 million to expand production and storage capacity (that’s another $6,350 per ratepayer), but not to build pipes to transport the water to new users.

The numbers from the cost-of-service report demonstrate that this is a ridiculous investment.

Of the $254 million of new spending, $150 million of that will be spent through the year 2025 (with plans to spend the rest in later years).  After spending the initial $200 million in past years, plus the $150 million through 2025, the projected revenues from recycled water in the year 2025 are a pitiful $1.38 million per year.

Think about what that means.  Even if it cost zero dollars to operate the facility every year (no employee salaries and pensions, chemicals, electricity or maintenance), and even if we paid 0% interest on our debt, if 100% of the revenues were dedicated to paying back the initial investment…IT WOULD TAKE 253 YEARS!!!

If the revenues continue at that rate beyond 2025, after the full $454 million has been spent, IT WOULD TAKE ALMOST 329 YEARS.  In reality, it will take much, much longer because we will pay interest, and it does cost a lot to operate the facility every year.

This investment will not pay off in your lifetime.  It will not pay off in the lifetime of your children, your grandchildren, your great-grandchildren, or your great-great-grandchildren…it will take HUNDREDS of years.

For perspective, our country was only founded 240 years ago.

Legal restrictions prevent this recycled water from being used for drinking and food preparation, for washing your hands and dishes, etc.  It can be used to water grass, but after the proposed expansion you still can’t use it at your house because only a handful of agricultural users will have access to the water even at that point.

This is just one of the ridiculous things the city wants to do with the rate increase.

We need your help to stop these crippling rate increases:

1) Share this blog post with your Oxnard friends and neighbors.

2) Complete and return the protest ballot on page 2 of this document

3) Attend the January 19th public hearing at 6:00 pm at Oxnard City Hall (305 W Third St).

IMPORTANT TIMING NOTE:  Protest forms must be RECEIVED by the city before the end of the hearing on January 19.  If you mail your form later than January 15, it might not be received in time.  After that date, please just either deliver it directly to the city clerk or bring it in person to the hearing on January 19th.

A note about page numbers:  The cost-of-service report reference above has some printed page numbers embedded in the document, but their page number 1 is the eleventh page of the file.  If you are looking at the PDF version of the document, your PDF reader software considers the first page as page 1.  The page numbers above are the numbers PRINTED on the document.  You will need to add 10 to that number to get the correct PDF page number.


Fire Sale on Recycled Water

The City of Oxnard intends to charge some ratepayers less and expects you to pay the difference.

As we have noted before in our fight against the 60% proposed utility rate increases, Oxnard’s water enterprise fund does not charge the city-owned golf course for the recycled water it receives.  According to the city’s own documents and public statements, when they do start charging in the future, they intend to sell it AT A LOSS.

On Wednesday, January 13, the city put on a public forum about the proposed utility rate increases.  In response to a question from our President, the Public Works Director indicated that it costs the city about $1,800 per acre-foot to produce the non-potable recycled water.

According to the ordinance that will be in front of the city council on January 19, recycled water sold in 2016 will be priced at the rate of $3.46 to $3.65 per hundred-cubic-foot (HCF).  Since 435.6297 HCF make up an acre-foot, that price is equivalent to $1,507 to $1,590 per acre-foot, which is less than the $1,800 per acre-foot cost of production.

The cost of recycled water is likely much higher than that because we suspect the $1,800 per acre-foot figure only includes the operations cost of producing the water.  It likely does not yet factor in overhead costs such as the $200 million that they have already spent to build the building and the $254 million they still plan to spend to expand it.  If that’s the case, the real cost per acre-foot of recycled water is much higher.

While we do not begrudge any company that wants to take the city up on its offer to sell water below its cost, we believe that it is horrible mismanagement of your money for the city to operate in this way.  Because they are selling recycled water at a loss, they have to charge someone else more to make up for it.

That person is likely you.

Well over half of the $475 million in capital expenditures proposed for the water system is for the water recycling facility boondoggle.  The expansion will allow the city to sell even more water at below cost.

This reminds us of the joke about the merchant who claims to sell his products at a loss, but somehow makes up for it with greater volume.  Unfortunately, this situation is not a joke.  It’s costing you real money.

Time is short to stop the abusive rate increases which include the plan for expanding the water recycling facility.  It is now too late to mail protest forms and have them arrive on time.  Instead, submit your protest forms from page 2 of this document in person to the city clerk before the end of the public hearing on January 19, at 6:00 p.m., at Oxnard City Hall, 305 W Third St.


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