Oxnard's New Sewer Rate Scheme Revealed

After intense public pressure, city staff – finally! – agreed to release the secret rate model being used to develop new wastewater rates … or so it seemed.  They sent it after the close of business … on a Friday evening … before a three day holiday weekend … and it was locked down with passwords to prevent anyone from being able to generate their own what-if scenarios.

Frustration!!…but all was not lost. Fortunately, we’ve got friends in low places. We called in a favor. Without getting into the technical details, we now have an unlocked, fully-functional version of their rate model.

So … what was revealed?

Being able to review the rate model revealed new information, not previously shared with the public … or even members of the Utility Ratepayers Advisory Panel (URAP):

  • Up until now, the URAP was told that the city needed to spend $270.7 million on capital improvements over the next 10 years.  The rate model, however, calculates rates for $309.4 million of spending.  In the past two weeks, the city increased its spending plans by $40 million without telling the URAP members and the public of the change.  They just snuck it into the rates.  We might never have known this if we hadn’t insisted on seeing the rate model.
  • All six rate increase scenarios developed by the city staff violate existing city council policy regarding how much debt can be incurred.  We previously requested a list of all council policies impacting rate setting.  City staff disclosed SOME of those policies…but neglected to mention the one that requires that short-term assets be paid for in cash, and long-term assets only be 50% funded with debt.

    (This is particularly ironic, since when we wanted the URAP to recommend other council policy changes, city staff howled that we must live only within the bounds of existing policy and not ask to change it. When it suits them, however, they are asking the URAP to recommend plans that will violate city council policy and turn ratepayers into debt slaves!)
  • City staff prepared six rate increase scenarios which (after factoring in the 35% increase already implemented last March) would range from 56% to 96% increases.  It seems like they are giving us some options…until you see the rate model and realize that all six scenarios are just variations of one single plan to spend $309.4 million!  It’s not six options.  It’s only one option, and if we opt for lower rate increases in the first 5 years, they’ll make up for it in years 6-10 with even higher rate increases.
  • The ten-year plan is to more than triple the amount of debt, which will lock in high rates for decades to come.  The wastewater utility already spends 1/3 of its revenues on debt payments … In less than ten years the annual debt payments alone will exceed 100% of today’s revenues. The architects of this plan will be long retired and enjoying their pensions … while you are saddled with debt payments for a generation.

All is not lost though … After breaking through their password we were able to develop an alternate scenario to present to the URAP this Wednesday night.

City staff really wanted the URAP to make a snap decision last week; however, the URAP needed more time to study the matter … and scheduled one more meeting.

This URAP will likely vote out a set of recommendations to the city council this Wednesday, February 22, starting at 6:00 pm at:

Oxnard Performing Arts Center, Ventura Room
800 Hobson Way, Oxnard, CA 93030

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