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Saturday, April 20, 2019

By Chris Frost


Oxnard— The Oxnard City Council’s Public Works and Transportation Committee discussed a potential increase for wastewater rates in the future, April 9, as rising costs and cutbacks in supply is on the horizon. 


Oxnard Water Utility Manager Omar Castro presented the city’s water resource management plan, financial plan and rate study to the committee and said the city’s resources are combined with 40-50 percent of state water it gets from the Metropolitan Water District via Callegas.


“With our groundwater pumping, we produce about 25-30 percent through our wells, and we purchase 25-30 percent through the United Conservation District.


Castro said challenges include increased costs and the reliability of state water and the city sees an approximately 5.5 percent increase in price by 2040. The city will purchase state water for $5,000 an acre-foot.


“If you look at what people are producing desalinated water at, it’s about $2,000 an acre-foot,” he said. “We also have an issue with vulnerability, we know that the pipeline is the sole source of state water, it’s about 50 percent of our water supply, and it’s reaching the end of its life.”


Local groundwater is also being impacted, he said, as the Sustainable Groundwater Management Act (GMA), a mandated cutback in the management of the local groundwater supply, which could mean a 40 percent cutback in the groundwater supply.


“That’s not just the water we pump; that’s the water we’d have available from United Water,” he said. 


The city is looking toward ways to manage its resources, he said, and they are looking at expanding the advanced water purification facility which was initially designed to supply water to agricultural and industrial customers.


“It was designed to put it in the ground to minimize the impact of seawater intrusion,” Castro said. “Now that we have new regulations, we can utilize that resource in our aquifer storage and recovery program, putting it into the ground and demonstrating to the state that it meets the potable standards and utilize that water differently.”


The advanced water treatment facility needs to expand, he said, as it is currently built at 6.25 million gallons per day, but the overall design allows it to treat 25 million gallons per day.


“Some of the issues Crossroads are having is that water sources are complex. We share them between Oxnard and United Pumping groundwater, and it is an aging infrastructure that we have to maintain and replace,” he said. “Our climate changes are uncertain, and we did have a reasonable amount of precipitation this year, but our historical trend shows that we are in a dry period.”


Water affordability remains a key, as the city has seen the projected impact from the state water purchase.


“We want to make sure that we address our customers who care about the water quality as well as the level of service,” he said. “The regional economic vitality depends on our water security.”


The rate study will examine best investments to secure the city’s water future, he said, what actions they must take to meet the regulatory and climate changes, the necessary steps needed to supply high water quality, balance long-term project priorities with today’s water rates and create a dialogue with customers and identify their essential items.


“The urban water management plan is something we have to address and update in 2021,” he said.  


Castro said the water resource management plan has five steps: Build a consensus, the baseline assessment, alternative screenings, regional stakeholders and alternative selection.


“The first step is soliciting input goals and objectives through surveys and interviews, and that is part of our in-reach,” he said. “That is talking with all of our employees, managers, directors and well as city council members. We will work closely with our city attorney’s office to make sure there’s no Brown Act violations or issues.”


Step two means assessing the water division assets and having a clear plan of what their financial health is and identify those resources.


“We have to engage in our partners and our regional partners,” he said. “Step five is to establish the optimal alternatives based on cost reliability, implementation complexity, regulatory constraints, and regional customer benefits. For the financial model, we have to assess the quality of benefits of each one, develop preliminary costs for each one, and conduct a cost-benefit analysis and determine the best short-term and long-term goals.”


Castro said the city would have a public outreach and make sure there is plenty of material for people to see and they must connect everyone who can participate.


“We have the utility rate-payers advisory panel and community members, up to 10 meetings and we’ll utilize that input and develop our rate structure and alternatives, and provide recommendations,” he said. “The last component is our Prop 218, which is the informative process to all of our communities about the rates.”


Castro said the consultant team cost would not exceed $519,143.


“The water rate study and financial plan will not exceed $160,442,” he said. “If we weren’t doing the resource management plan, this would probably go up another $170,000, or more, but we are going to be able to extract and get the information off our plan and develop these rates.”


During public comments, Alicia Percell said she is concerned about how the prices are set for the cost of recycled water.


“It’s clear that the users of recycled water are not paying the capital costs for the AWPF facility,” she said. “The capital cost for building the facility is being borne by all the ratepayers in the city, not the users of the recycled water. The cost structure for the recycled water is only based on operational costs and somebody else paid to build the thing.”


She said the rate charged is “well below” the unit cost and the city is selling it for less than it costs to produce.


“The rationale is that some of these entities have groundwater pumping rights, so the contract is structured," she said. "You give us groundwater pumping credits, and we give you a reduced rate for the water.”


She asked the committee what the value of the credit is, and said currently, Fox Canyon does not allow them to redeem the credits.


“It’s like a coupon that says good while supplies last, but there are no supplies,” she said. “We’re trading it for something that seems to have zero value, and I’m pretty sure that I read somewhere there is a 10-year expiration on the coupon, and at some point, those things become worthless, so we traded it for something that has no value.”


Castro said the water resource management plan updates all the information and makes sure it is transparent.


“We are currently completing our permit with the Los Angeles Regional Board to utilize that water differently, so this resource management plan is going to define all that and make clear for everyone,” he said. 


Committee Member Tim Flynn said he hopes the city does not raise water rates, but it appears to be on the horizon.


“The plan to build an advanced water purification facility is brilliant,” he said. “Oxnard, under a previous city public works director, was and has been a leader when it comes to investment in not just technology, but investment in future strategies to deal with what is a permanent situation.”


The plan for the treatment facility was flawed, and he said people did not know it at the time.


“Today we know that the advanced water purification facility and Oxnard’s building of this $90 million plant was based on a flawed strategy that was having a variety of users for the water, but a big part of those users were to be ag users,” he said. “To get the money we would need from them, to be competitive with water rates, was sell them at cash value per acre-foot, then they would provide us pumping right credits.”


He pointed out there are issues with groundwater shortages and overpumping the aquifer for the last three decades, and that’s why the the GMA was formed.


“My father was part of forming the GMA when he was on the board of supervisors because of saltwater intrusion, and the groundwater was being over-pumped,” Flynn said. “The flawed strategy is the credits. I,000-acre-feet of credits, and we need to redeem that coupon.”


He called it “phony money.”


“We hope that groundwater doesn’t have to be adjudicated and the city can manage its problems.


Flynn pointed to the recall election over wastewater rates in 2018 that caused “enormous human and financial capital to the city, and the government.


“I estimated at one point that one-third of the total capacity of the city was involved in the recall election over wastewater rates,” he said. “It was catastrophic, and it wasn’t whether the rates should rise, even the proponent of the recall said the rates should rise, it was over the tiny details. 


That recall election was a farce and a waste of money.”


The project is scheduled to start in April.