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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