1. Cost of Service and Rate Study
City of Port Hueneme
Cost of Service and Rate Study
City Council Workshop #2
December 21, 2017

2. Recap – Special Questions
5 Special questions plus a question about capital reserve level (Total 6 decisions before council)
Two were preliminarily answered last time:
RO Off
Reserves = 7.5%
Leaves 4 to answer today

3. Recap - 5 Special Questions
SQ #1: How much does the City owe for Water? Shall we reduce the principal owed to the General Fund by approximately $800,000? TBD
SQ #2: The General Fund loan interest rate is 5% (2008). Current interest rates are lower. Shall we “refinance” the loan to 2.87% (approximate 30-yr Treasury)? TBD
SQ#3: Shall we shut down RO treatment – which saves about 90 to 100k per year? RO Off

4. Recap - 5 Special Questions
4. SQ#4: How much shall the City invest in Capital Replacement?
Full Staff Recommended CIP ($33M over 5 years)?
WMP CIP (Lower expense over the next 5 years, but long-term same amount, $19M over 5 years)?
No CIP?
Something else?
TBD
5. SQ #5: How much fixed revenue shall the City collect through its rate structure – which affects a customers fixed charge/bill
Current is about 59%
So. California Average around 26 to 30%,
Mid-point – 45%?
Tendency to reduce the fixed charge for lower bills for low water users

5. Recap - Reserves
Do you want to modify your reserve goals? 7.5% of asset value, was 10%
Avg of Fully City is $7 M
Avg of Water Master Plan CIP is $4M

6. End of Presentation