Attachment 1 Water Financial Plan — Thousand Oaks City Council, September 9, 2025

City of
Thousand Oaks
2025 Water Rate Study
Final Report – September 3, 2025
Prepared by: Water Resources Economics, LLC
ATTACHMENT #1

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Water Resources Economics, LLC

September 3, 2025

Tara Tosatto
Revenue Operations Manager
City of Thousand Oaks
2100 Thousand Oaks Blvd.

Thousand Oaks, CA 91362

Subject: 2025 Water Rate Study

Dear Ms. Tosatto,

Water Resources Economics, LLC is pleased to submit this 2025 Water Rate Study Report to the City of Thousand Oaks. This report documents the results and recommendations of the 2025 Water Rate Study. The primary goal was to develop an updated five-year financial plan for the City’s Water Enterprise, a proposed two-year water rate schedule, and updated water connection fees.

This study utilized industry-standard rate-setting methodology in accordance with guidelines developed by the American Water Works Association. Our project team has a proven record developing fair and equitable rates for numerous retail water agencies in California over the past 25 years. We are confident in our ability to develop sound water rates that meet industry standards and align with Proposition 218 requirements.

It has been a pleasure assisting the City and we appreciate the support provided by yourself and your colleagues over the course of the study.

Sincerely,

Sanjay Gaur
Founder / President

City of Thousand Oaks 2025 Water Rate Study

Water Resources Economics, LLC

TABLE OF CONTENTS

1. Executive Summary .................................................................................................................. 1

2. Introduction ........................................................................................................................... 13

2.1 Water System Overview ............................................................................................................. 13

2.2 Rate Study Overview .................................................................................................................. 13

2.3 Legal Requirements .................................................................................................................... 13

2.4 Rate-Setting Methodology ......................................................................................................... 14

2.5 Disclaimers .................................................................................................................................. 15

3. Financial Plan Update ............................................................................................................. 16

3.1 Financial Plan Methodology ....................................................................................................... 16

3.2 Revenues ..................................................................................................................................... 16

3.3 Operations & Maintenance Expenses ........................................................................................ 25

3.4 Debt Service ................................................................................................................................ 30

3.5 Capital Improvement Program Expenses ................................................................................... 31

3.6 Reserve Targets .......................................................................................................................... 32

3.7 Status Quo Financial Plan ........................................................................................................... 33

3.8 Proposed Financial Plan .............................................................................................................. 36

4. Proposed Rate Development .................................................................................................. 40

4.1 Proposed Rate Calculation Methodology ................................................................................... 40

4.2 Proposed Fixed Charges.............................................................................................................. 41

4.3 Proposed Commodity Rates ....................................................................................................... 42

4.4 Proposed Water Rate Schedule .................................................................................................. 44

4.5 Bill Impacts .................................................................................................................................. 46

5. Water Shortage Stage Rates ................................................................................................... 48

5.1 Water Shortage Stage Rates Overview ....................................................................................... 48

5.2 Water Shortage Contingency Plan .............................................................................................. 48

5.3 Water Shortage Stage Rates Methodology ................................................................................ 49

5.4 Water Shortage Stage Rate Surcharge Development ................................................................ 49

5.5 Proposed Water Shortage Stage Rates....................................................................................... 52

6. Water Connection Fee Update ............................................................................................... 54

6.1 Water Connection Fee Update Overview ................................................................................... 54

6.2 Water Connection Fee Methodology ......................................................................................... 54

6.3 Proposed Water Connection Fees .............................................................................................. 55

7. Appendices ............................................................................................................................ 59

7.1 Appendix A: Detailed O&M Expense Projections ....................................................................... 59

7.2 Appendix B: Detailed Five-Year CIP Expenses ............................................................................ 66

City of Thousand Oaks 2025 Water Rate Study

Water Resources Economics, LLC

LIST OF TABLES
Table 1-1: Water Enterprise Reserve Targets ........................................................................................... 3 Table 1-2: Proposed Revenue Adjustments ............................................................................................. 3 Table 1-3: Proposed Water Rate Schedule ............................................................................................... 7 Table 1-4: Proposed Water Shortage Stage Rates ................................................................................... 8 Table 1-6: Proposed Water Connection Fees ......................................................................................... 12 Table 3-1: Current Fixed Charges ........................................................................................................... 17 Table 3-2: Current Commodity Rates ..................................................................................................... 18 Table 3-3: Current Pumping Charges ...................................................................................................... 18 Table 3-4: Assumed Account Growth ..................................................................................................... 18 Table 3-5: Number of Metered Water Service Connections .................................................................. 19 Table 3-6: Number of Private Fire Lines ................................................................................................. 20 Table 3-7: Projected Water Use by Customer Class and Tier (HCF) ....................................................... 22 Table 3-8: Projected Water Use by Pumping Zone (HCF) ....................................................................... 23 Table 3-9: Revenue from Current Rates ................................................................................................. 24 Table 3-10: Miscellaneous Non-Rate Revenue ....................................................................................... 24 Table 3-11: Current Revenue Summary ................................................................................................. 25 Table 3-12: Wholesale Water Purchase Cost Assumptions (CALENDAR YEAR BASIS) ........................... 26 Table 3-13: Wholesale Water Purchase Cost Projections (CALENDAR YEAR BASIS) .............................. 27 Table 3-14: Wholesale Water Purchase Cost Projections (FISCAL YEAR BASIS) ..................................... 28 Table 3-15: O&M Expense Annual Inflationary Assumptions ................................................................ 29 Table 3-16: Summary of O&M Expenses ................................................................................................ 30 Table 3-17: CIP Funding Assumptions .................................................................................................... 31 Table 3-18: Target Reserve Policy ........................................................................................................... 32 Table 3-19: Projected Target Reserve Levels .......................................................................................... 32 Table 3-20: Status Quo Financial Plan .................................................................................................... 34 Table 3-21: Proposed Revenue Adjustments ......................................................................................... 36 Table 3-22: Proposed Financial Plan ....................................................................................................... 38 Table 4-1: Proposed Fixed Charges ........................................................................................................ 41 Table 4-2: Water Supply Pass-Through Adjustment Calculation............................................................ 42 Table 4-3: Proposed Commodity Rates .................................................................................................. 43 Table 4-4: Proposed Pumping Charges ................................................................................................... 44 Table 4-5: Proposed Two-Year Water Rate Schedule ............................................................................ 45 Table 5-1: CY 2026 Water Shortage Stage Rate Surcharge Calculation ................................................. 50 Table 5-2: CY 2027 Water Shortage Stage Rate Surcharge Calculation ................................................. 51 Table 5-3: Proposed Water Shortage Stage Rate Surcharges ................................................................ 52 Table 5-4: Proposed Water Shortage Stage Rates (per HCF) ................................................................. 53 Table 6-1: Value of Water System Assets ............................................................................................... 56 Table 6-2: Equivalent Meter Units .......................................................................................................... 56 Table 6-3: Proposed Water Connection Fee Calculation per Equivalent Meter Unit ............................ 57 Table 6-4: Proposed Water Connection Fee Calculation by Meter Size ................................................ 57 Table 6-5: Proposed Water Connection Fees ......................................................................................... 58 City of Thousand Oaks 2025 Water Rate Study

Water Resources Economics, LLC

Table 7-1: Detailed O&M Expense Projections ...................................................................................... 59 Table 7-2: Detailed Five-Year CIP Expenses ............................................................................................ 66

LIST OF FIGURES
Figure 1-1: Status Quo Financial Plan – Projected Cash Reserves ............................................................ 4 Figure 1-2: Proposed Financial Plan – Projected Cash Reserves .............................................................. 4 Figure 1-3: Single-Family Residential Monthly Bill Impacts in 2026 (Zone P1) ........................................ 9 Figure 1-4: Single-Family Residential Monthly Bill Impacts in 2026 (Zones P2/P3) ............................... 10 Figure 3-1: Historical and Projected Water Use (AFY) ............................................................................ 21 Figure 3-2: Status Quo Financial Plan – Projected Cash Reserves .......................................................... 35 Figure 3-3: Proposed Financial Plan – Projected Cash Reserves ............................................................ 39 Figure 4-1: Single-Family Residential Monthly Bill Impacts in 2026 (Zone P1) ...................................... 46 Figure 4-2: Single-Family Residential Monthly Bill Impacts in 2026 (Zones P2/P3) ............................... 47

LIST OF ABBREVIATIONS
AF: Acre-feet
AFY: Acre-feet per year
AWWA: American Water Works Association
CIP: Capital improvement program
CMWD: Calleguas Municipal Water District
CY: Calendar Year
FY: Fiscal year (July 1st – June 30th)
HCF: One hundred cubic feet (approximately 748 gallons) O&M: Operations and maintenance
WRE: Water Resources Economics, LLC
City of Thousand Oaks 2025 Water Rate Study

1 1. EXECUTIVE SUMMARY

RATE STUDY OVERVIEW
Public retail water agencies in California conduct water rate studies periodically to ensure that customers are appropriately charged for water service. The City of Thousand Oaks (City) last completed a water rate study in 2023, which established a two-year water rate schedule for January 2024 through December 2025. The City engaged Water Resources Economics, LLC (WRE) to conduct this 2025 Water Rate Study to reevaluate the Water Enterprise’s near-term revenue needs and to establish a two-year proposed water rate schedule spanning from January 2026 through December 2027. As part of the 2025 Water Rate Study, WRE also developed updated water connection fees, which are one-time fees paid by new development to connect to the City’s water system.

LEGAL REQUIREMENTS
Legal considerations relating to retail water rates in California focus heavily on Proposition 218, which was enacted in 1996 and is now reflected in Article XIII C and Article XIII D of the California Constitution. Proposition 218 states that “property related fees and charges” (which include retail water rates) may not exceed the proportional cost of providing the service to the customer and may not be used for any purpose other than providing said service. The practical implication is that public retail water agencies in California must demonstrate a sufficient nexus between the costs incurred by the agency to provide water service and the rates charged to customers.

RATE-SETTING METHODOLOGY
This rate study was conducted using industry-standard methodology outlined by the American Water Works Association (AWWA) in its Manual of Water Supply Practices M1: Principles of Water Rates, Fees and Charges, Seventh Edition. The overall rate study process is summarized below:

1. Financial Plan Update: Annual revenues from current rates and expenses are projected over a five-year period. This is used to establish baseline financial projections from which the need for rate increases is evaluated. The overall goal of the financial plan is to establish the total annual rate revenue requirement over the rate-setting period. The City conducts financial plan updates every two years during each rate study.

2. Cost-of-Service Analysis: System costs are evaluated and allocated to customers in proportion to their use of the water system. The overall goal of a cost-of-service analysis is to establish a robust proportionality between the costs incurred by the utility and the rates charged to customers. Public retail water agencies typically conduct a cost-of-service analysis approximately every five years to satisfy Proposition 218 requirements. The City conducts cost-of-service analyses for its water system every six years. The City’s prior cost-of-service analysis was completed in 2021 and the next is planned for 2027. Therefore, no cost-of- service analysis was conducted as part of the 2025 Water Rate Study.

3. Rate Development: A proposed rate schedule is calculated directly from the results of the financial plan update and cost-of-service analysis (if applicable).

City of Thousand Oaks 2025 Water Rate Study

2 4. Rate Study Documentation: A rate study report (i.e., this document) is developed to document the proposed rate development process, show detailed supporting calculations, and provide transparency to ratepayers and elected officials.

FINANCIAL PLAN UPDATE
Financial Plan Assumptions
Annual Water Enterprise revenues and expenses were projected to evaluate cash flow and cash reserve levels over a five-year planning horizon. WRE worked closely with City staff to develop key assumptions underlying the financial plan projections, including:
 Customer water demand: Baseline water demand was projected at 8,710 acre-feet per year (AFY) in Fiscal Year1 (FY) 2025/26, which aligns closely with the five-year historical average.

Baseline demand reflects Stage 1 supply conditions (0-10% water supply shortage) per the City’s Water Shortage Contingency Plan.
 Operations & maintenance (O&M) expense increases: Wholesale water purchases from Calleguas Municipal Water District (CMWD) constitute over half of all Water Enterprise O&M expenses. Per CMWD projections, water purchase costs are expected to increase by 8.4% per year on average. All other O&M expenses were projected to increase by 3.2% per year due to inflation. Total O&M is expected to increase by 6.3% per year on average.  Capital improvement program (CIP) funding: The City’s currently adopted CIP budget includes $74.5 million of Water Enterprise CIP project costs over the next five years (including carryover). However, it is anticipated that a portion of the five-year CIP will likely be deferred beyond the next five years. Furthermore, incorporating the full cost of the five-year CIP would result in unacceptably high bill impacts to customers. WRE worked with City staff to develop a modified CIP funding assumption of $10.4 million per year, which more closely reflects expected annual average CIP project execution.

Proposed Changes to Reserve Targets
It is common practice for public retail water utilities to establish reserve targets to ensure that cash reserves are maintained at appropriate levels. WRE evaluated the Water Enterprise’s three current reserve targets (see Table 1-1). One change was recommended to the capital reserve target, which is currently set equal to two years of average annual CIP expenses. The capital reserve is intended to provide sufficient cash on hand to cover ongoing construction costs associated with CIP projects. The current capital reserve target will be burdensome to maintain due to substantial planned CIP and would require significant rate increases to fully fund. WRE recommends reducing the capital reserve target from two years to one year of average annual CIP. This will mitigate rate increases, allow the Water Enterprise to draw upon its current reserves to help fund near-term CIP, and more closely align with industry norms.

1 The City’s fiscal year is from July through June. For example, FY 2025/26 extends from July 1, 2025 - June 30, 2026.

City of Thousand Oaks 2025 Water Rate Study

3 Table 1-1: Water Enterprise Reserve Targets
Reserve Current Target Proposed Target
Operating Reserve 25% of annual O&M expenses 25% of annual O&M expenses Capital Reserve Two years of average annual CIP One year of average annual CIP Emergency Reserve Replacement cost of most critical asset Replacement cost of most critical asset

Proposed Pass-Through Adjustments
The City’s currently adopted water rate ordinance includes a provision that allows the Water Enterprise to recover any increased costs resulting from CMWD wholesale water rate increases by implementing “pass-through adjustments.” Wholesale water purchase cost increases have significantly outpaced other Water Enterprise O&M cost increases in recent years. Uncertain future wholesale rate increases continue to pose a significant financial risk to the Water Enterprise. WRE therefore recommends that the City maintains its existing pass-through policy to ensure that wholesale water purchase costs can be adequately recovered.

Proposed Revenue Adjustments
Additional water rate increases, excluding pass-through adjustments, are referred to as “revenue adjustments.” In percentage terms, revenue adjustments represent overall annual increases in rate revenue resulting from rate increases (before accounting for pass-through adjustments). WRE worked with City staff to establish a proposed revenue adjustment scenario that would sufficiently meet the Water Enterprise’s funding requirements while minimizing customer bill impacts. The proposed revenue adjustment scenario includes revenue adjustments of 5% each year from FY 2025/26 through FY 2029/30 (see Table 1-2).

The currently adopted water rate schedule included 3% annual revenue adjustments (plus water supply pass-through adjustments). The need for higher revenue adjustments over the next five years is primarily due to higher CIP funding requirements, which have increased by over $2.5 million per year compared to the prior water rate study completed in 2023. Note that revenue adjustments in the final three years of the five-year study period are for planning purposes only, as the City only adopts two years of water rates at a time.

Table 1-2: Proposed Revenue Adjustments
Fiscal Year Effective Date Proposed Revenue Adjustment
FY 2025/26 PROPOSED January 2026 5% + Pass-Through Adjustment FY 2026/27 PROPOSED January 2027 5% + Pass-Through Adjustment FY 2027/28 PROJECTED January 2028 5% + Pass-Through Adjustment FY 2028/29 PROJECTED January 2029 5% + Pass-Through Adjustment FY 2029/30 PROJECTED January 2030 5% + Pass-Through Adjustment

City of Thousand Oaks 2025 Water Rate Study

4 Status Quo vs. Proposed Financial Plan Projections
Five-year financial plan projections were established for two scenarios. The “status quo” scenario was first developed to determine if pass-through adjustments alone (i.e., 0% annual revenue adjustments) would be sufficient to meet the Water Enterprise’s funding needs and cash reserve target levels over the next five years (see Figure 1-1). This provided a baseline scenario from which the need for proposed revenue adjustments was evaluated. The “proposed” scenario (see Figure 1-2) includes the 5% proposed annual revenue adjustments plus pass-through adjustments, which are necessary to ensure sufficient cash reserves are maintained over the study period.

Figure 1-1: Status Quo Financial Plan – Projected Cash Reserves

Figure 1-2: Proposed Financial Plan – Projected Cash Reserves

City of Thousand Oaks 2025 Water Rate Study

5 PROPOSED WATER RATE DEVELOPMENT
The City’s Water Fund functions as a self-sustaining business enterprise and is primarily funded by customer rates. The City’s water customers are billed monthly and rates are adjusted each January.

Current rates have been in effect since January 2025.

Current Water Rate Structure
Significant rate structure revisions are typically only evaluated in conjunction with a cost-service analysis. The City’s next water cost-of-service analysis is planned for 2027. Therefore, no changes to the current water rate structure outlined below were proposed as part of this water rate study. Note however that the proposed introduction of new water shortage stage rates is addressed in the next subsection. The City’s current water rate structure consists of the following rates and charges:

1. Fixed Charges: Each metered water connection (excluding private fire lines) is subject to a fixed meter charge, which varies based on meter size. Private fire lines2 are subject to separate fixed private fire line charges based on the diameter of the connection.

2. Commodity Rates: Each hundred cubic feet (HCF) of metered water use is subject to a commodity rate. Single family residential customers are subject a three-tier commodity rate structure. All other customers are subject to uniform rates (i.e., no tiers).

3. Pumping Charges: Each HCF of metered water use within higher elevation “pumping zones” is subject to a pumping charge to recover costs associated with booster pump stations.

Proposed Introduction of Water Shortage Stage Rates
Public retail water agencies in California have faced worsening water supply shortages and volatile droughts in recent years. During water supply shortages, revenue losses tend to significantly exceed cost savings. This often leads to significant financial challenges and insufficient cost recovery. Water shortage stage rates are a common tool used by public retail water agencies in California to mitigate financial risks during water supply shortages. Water shortage stage rates are increased commodity rates that are implemented during formally declared water supply shortages to offset financial losses during periods of reduced water sales.

The City has never previously adopted or implemented water shortage stage rates. However, significant constraints on imported water deliveries from the State Water Project due to drought in recent years have presented serious water supply challenges to the City’s water system. This has resulted in volatile customer water demand in response to supply shortages and subsequent conservation efforts. To address this financial risk, City staff directed WRE to develop proposed water shortage stage rates for consideration by City Council.

2 Private fire lines are dedicated private fire protection connections such as for fire-suppression sprinkler systems.

City of Thousand Oaks 2025 Water Rate Study

6 Proposed Water Rates
Proposed Water Rates
A proposed two-year schedule of fixed charges, commodity rates, and pumping charges is provided on the following page in Table 1-3. The proposed rate adjustments are planned for January 2026 and January 2027. Proposed fixed charges and pumping charges were calculated by increasing current charges by the 5% proposed revenue adjustments. Proposed commodity rates were calculated by first increasing current rates by the 5% proposed revenue adjustments and then adding the proposed water supply pass-through adjustments of $0.42 per HCF in 2026 and $1.02 per HCF in 2027.

The proposed pass-through adjustments were calculated based on projected customer demand levels and forecasted CMWD wholesale rate increases. Note that the City may adjust the pass-through adjustments during the proposed rate period based on actual CMWD wholesale cost increases that vary from the projected values presented in this rate study. In the event that this occurs, customers must be notified in advance, in accordance with all relevant legal requirements, before updated pass- through adjustments may be implemented.

Proposed Water Shortage Stage Rates
The proposed commodity rates presented in Table 1-3 assume water demand levels consistent with Stage 1 of the City’s Water Shortage Contingency Plan, which represents a 0-10% water supply shortage (i.e., baseline demand). WRE developed proposed water shortage stage rates for the City’s remaining five shortage stages defined below:
 Stage 2: 11-20% supply reduction
 Stage 3: 21-30% supply reduction
 Stage 4: 31-40% supply reduction
 Stage 5: 41-50% supply reduction
 Stage 6: >50% supply reduction
Proposed water shortage stage rates for Stages 2-6 are provided in Table 1-4. The stage rates were determined by applying uniform $ per HCF increases to all baseline commodity rates and are intended to recover Water Enterprise net revenue losses associated with each shortage level.

When in effect, water shortage stage rates would fully replace baseline commodity rates.

Note that if adopted, the proposed water shortage stage rates may only be implemented if the corresponding water shortage stage (or a higher stage) has been formally declared in accordance with the City’s Water Shortage Contingency Plan. However, the City would not be required to implement the corresponding stage rates when a water shortage stage is declared. For example, the City may continue to charge baseline commodity rates even if a Stage 2 water shortage is formally declared. It is anticipated that Stage 1 will be in effect when new rates are implemented in January 2026.

City of Thousand Oaks 2025 Water Rate Study

7 Table 1-3: Proposed Water Rate Schedule
Proposed Water Rates Current
Proposed
January
2026
Proposed
January
2027
Fixed Meter Charges (per Month)
3/4-inch meter and smaller $28.41 $29.84 $31.34
1-inch meter $44.52 $46.75 $49.09

1.5-inch meter $84.80 $89.04 $93.50
2-inch meter $133.14 $139.80 $146.79
3-inch meter $286.20 $300.51 $315.54
4-inch meter $511.76 $537.35 $564.22
6-inch meter $1,051.49 $1,104.07 $1,159.28

Fixed Private Fire Line Charges (per Month)
2-inch connection and smaller $2.42 $2.55 $2.68
3-inch connection $6.98 $7.33 $7.70
4-inch connection $14.84 $15.59 $16.37
6-inch connection $43.08 $45.24 $47.51
8-inch connection $91.78 $96.37 $101.19
10-inch connection $165.02 $173.28 $181.95
12-inch connection $266.56 $279.89 $293.89

Commodity Rates (per HCF)
Single-Family Residential Tiered Commodity Rates
Tier 1: 0-12 HCF per Month $6.41 $7.16 $8.10
Tier 2: 13-30 HCF per Month $7.01 $7.79 $8.76
Tier 3: >30 HCF per Month $7.36 $8.15 $9.14

Uniform Commodity Rates
Multi-Family Residential, Non-Residential, & Groundwater $6.78 $7.54 $8.50 Construction $7.36 $8.15 $9.14

Pumping Charges (per HCF)
Zone P1 (0 Lifts) N/A N/A N/A
Zone P2 (1 Lifts) $0.45 $0.48 $0.51
Zone P3 (1 Lifts) $0.45 $0.48 $0.51
Zone P4 (2 Lifts) $0.90 $0.96 $1.02
Zone P5 (3 Lifts) $1.35 $1.44 $1.53

City of Thousand Oaks 2025 Water Rate Study

8 Table 1-4: Proposed Water Shortage Stage Rates
Water Shortage Stage Rates
Baseline
Commodity
Rate - Stage1
Stage 2
(11-20%
Shortage)
Stage 3
(21-30%
Shortage)
Stage 4
(31-40%
Shortage)
Stage 5
(41-50%
Shortage)
Stage 6
(>50%
Shortage)
Commodity Rate by Stage (January 2026)
Single-Family Residential Tiered Commodity Rates
Tier 1: 0-12 HCF per Month $7.16 $7.63 $8.10 $8.71 $9.51 $12.44 Tier 2: 13-30 HCF per Month $7.79 $8.26 $8.73 $9.34 $10.14 $13.07 Tier 3: >30 HCF per Month $8.15 $8.62 $9.09 $9.70 $10.50 $13.43

Uniform Commodity Rates
Multi-Family Residential, Non-Residential, &
Groundwater $7.54 $8.01 $8.48 $9.09 $9.89 $12.82
Construction $8.15 $8.62 $9.09 $9.70 $10.50 $13.43

Commodity Rate by Stage (January 2027)
Single-Family Residential Tiered Commodity Rates
Tier 1: 0-12 HCF per Month $8.10 $8.64 $9.17 $9.86 $10.78 $14.11 Tier 2: 13-30 HCF per Month $8.76 $9.30 $9.83 $10.52 $11.44 $14.77 Tier 3: >30 HCF per Month $9.14 $9.68 $10.21 $10.90 $11.82 $15.15

Uniform Commodity Rates
Multi-Family Residential, Non-Residential, &
Groundwater $8.50 $9.04 $9.57 $10.26 $11.18 $14.51 Construction $9.14 $9.68 $10.21 $10.90 $11.82 $15.15 City of Thousand Oaks 2025 Water Rate Study

9 SINGLE-FAMILY RESIDENTIAL MONTHLY BILL IMPACTS
Sample monthly bills based on current and proposed rates were calculated to evaluate impacts to typical single-family residential customers in 2026. A comparison of single-family residential bills at varying levels of water use under current 2025 rates and proposed 2026 rates is provided for the most common pumping zones in Figure 1-3 and Figure 1-4. All sample bills incorporate fixed meter charges for a 3/4-inch or smaller meter and assume no water shortage stage rates are in effect. Annual bill increases exceed the 5% proposed revenue adjustments due to the additional rate increases resulting from water supply pass-through adjustments.

Figure 1-3: Single-Family Residential Monthly Bill Impacts in 2026 (Zone P1)

City of Thousand Oaks 2025 Water Rate Study

10 Figure 1-4: Single-Family Residential Monthly Bill Impacts in 2026 (Zones P2/P3)

City of Thousand Oaks 2025 Water Rate Study

11 WATER CONNECTION FEE UPDATE
Connection Fee Overview
New connections to the City’s potable water system are subject to water connection fees (sometimes referred to as “plant investment fees”). Connection fees are one-time fees that are necessary to ensure that existing users are not unfairly burdened by costs incurred to provide system capacity to new users. The City’s currently adopted water connection fee is $10,280 for a 3/4-inch or smaller meter. Larger meters are subject to higher fees in proportion to meter capacity.

Public water agencies typically conduct connection fee update studies periodically to ensure that charges are fair, reasonable, and consistent with legal requirements. The City last conducted a water connection fee update study in 2020. Since 2020, the City has increased its water connection fees every two years in proportion to changes in the Engineering News-Record’s Construction Cost Index for Los Angeles.

Proposed Connection Fee Methodology
Water and wastewater connection fees in California are typically developed based on methodologies outlined by the AWWA in its Manual of Water Supply Practices M1: Principles of Water Rates, Fees and Charges, Seventh Edition. The most appropriate AWWA methodology for water systems with sufficient existing capacity to serve long-term future demands is referred to as the Buy-in Method.

The Buy-in Method establishes connection fees based on the value of the system’s existing capital assets. The underlying rationale is that new customers should pay to “buy-in” to existing system capacity funded by past and current users. The Buy-in Method was utilized in the prior connection fees study in 2020 to establish the City’s current connection fees. WRE recommends retaining this methodology, as existing water system capacity is still expected to be sufficient to accommodate future growth.

Proposed Water Connection Fees
Proposed water connection fees based on the Buy-in Method are shown on the following page in Table 1-6. Proposed fees are approximately 17% higher than current fees. The increase is due to high inflation driving up capital asset values in recent years, as well as from the recent completion of significant capital projects adding to total water system capital assets. WRE recommends that the City continue to adjust its water connection fees every two years in proportion to changes in the Engineering-News Record’s Construction Cost Index for Los Angeles.

The City currently charges most new connections based on meter size. However, the City currently assesses connection fees on a per dwelling unit basis for some customer types such as multi-family residential
3 and hotels/motels/congregate care facilities with kitchens in each unit4 Additionally,

3 Each dwelling unit is charged 75% of the 3/4-inch fee. 4 Each dwelling unit is charged 50% of the 3/4-inch fee.

City of Thousand Oaks 2025 Water Rate Study

12 commercial connections with ten or fewer fixture units and monthly water use of 8 HCF or less are subject to reduced fees.5 No changes to these existing practices were recommended as part of this update.

Table 1-5: Proposed Water Connection Fees
Water Connection Fees Current
Proposed
January 2026 Difference
3/4-inch meter and smaller $10,280 $12,063 $1,783
1-inch meter $17,168 $20,105 $2,937

1.5-inch meter $34,232 $40,210 $5,978
2-inch meter $54,844 $64,335 $9,491
3-inch meter $119,968 $140,732 $20,764
4-inch meter $215,880 $253,318 $37,438
6-inch meter $445,432 $522,719 $77,287

5 Equal to 50% of the 3/4-inch fee.

City of Thousand Oaks 2025 Water Rate Study

13 2. INTRODUCTION

2.1 WATER SYSTEM OVERVIEW
The City provides potable water service to over 17,200 metered connections within City limits and to surrounding unincorporated areas of Ventura County. The City is the water purveyor for approximately 36% of water users within City limits. Other water users are served by California American Water Company, California Water Service Company, or Camrosa Water District. Over 90% of the City’s metered connections serve single-family residences, with remaining connections serving multi-family residential, commercial, institutional, and irrigation water users.

The City’s potable water supply currently consists entirely of treated imported water from the State Water Project, which is purchased from CMWD. The City also produces untreated water from one groundwater well, which is used exclusively for street median irrigation along Hillcrest Drive. The City’s current water system infrastructure includes 16 pump stations, 12 pressure reducing stations, 16 reservoirs totaling 35.5 million gallons, 11 interconnections with CMWD’s system, five emergency interconnections (three with California American Water Company and two with California Water Service Company), and 232 miles of transmission and distribution pipelines.

2.2 RATE STUDY OVERVIEW
The City’s water system functions as a self-sustaining enterprise (referred to herein as the Water Enterprise) and is primarily funded by customer rates. The City’s currently adopted two-year water rate schedule spans from January 2024 through December 2025 and was developed during a prior rate study completed in 2023. Public retail water agencies in California typically conduct a water rate study periodically to ensure that customers are appropriately charged for water service in compliance with California Proposition 218 and other applicable laws.

The City engaged WRE to conduct this 2025 Water Rate Study to establish a two-year proposed water rate schedule spanning from January 2026 through December 2027. The primary purpose of this rate study is to reevaluate the Water Enterprise’s near-term revenue needs and establish proposed rates for the next two years that will comply with all applicable laws while ensuring financial sustainability.

As part of the 2025 Water Rate Study, WRE also developed updated water connection fees for the City. Water connection fees are one-time fees paid by new development to connect to the City’s water system.

2.3 LEGAL REQUIREMENTS
Legal considerations relating to retail water rates in California focus heavily on Proposition 218, which was enacted in 1996 and is now reflected in Article XIII C and Article XIII D of the California Constitution. Proposition 218 states that “property related fees and charges” (which include retail water rates) may not exceed the proportional cost of providing the service to the customer and may not be used for any purpose other than providing said service. The practical implication is that public retail water agencies in California must demonstrate a sufficient nexus between the costs incurred by City of Thousand Oaks 2025 Water Rate Study

14 the agency to provide water service and the rates charged to customers. The primary means by which retail water agencies address this requirement is by conducting a “cost-of-service analysis” (which is described in more detail below).

Proposition 218 also affects the rate adoption process by requiring agencies to hold a public hearing to adopt rates. The agency must mail public hearing notices to all customers no fewer than 45 days prior to the public hearing. The public hearing notices must clearly show all proposed rate changes, provide information on the public hearing date/time/location, and provide instructions on how customers may protest the proposed rate changes. If a majority of customers submit a protest, the proposed rate changes cannot be adopted.

2.4 RATE-SETTING METHODOLOGY
The 2025 Water Rate Study was conducted using industry-standard methodology outlined by the AWWA in its Manual of Water Supply Practices M1: Principles of Water Rates, Fees and Charges, Seventh Edition. The overall rate study process is summarized in the steps outlined below:

2. Cost-of-Service Analysis: System costs are evaluated and allocated to various cost causation categories. This provides a basis from which to allocate the total annual rate revenue requirement to customers in proportion to their use of the water system. The overall goal of a cost-of-service analysis is to establish a robust proportionality between the costs incurred by the utility and the rates charged to customers. Public retail water agencies typically conduct a cost-of-service analysis approximately every five years to satisfy Proposition 218 requirements. The City conducts cost-of-service analyses for its water and wastewater systems every six years. The City’s prior water cost-of-service analysis was completed in 2021 and the next is planned for 2027. Therefore, no cost-of-service analysis was conducted as part of the 2025 Water Rate Study.

3. Rate Development: The existing rate structure is evaluated and potential changes are identified. A multi-year proposed rate schedule is then calculated directly from the results of the financial plan update and cost-of-service analysis (if applicable). Sample customer bills are evaluated to better understand the impacts of the proposed rate changes to customers.

4. Rate Study Documentation: A rate study report is developed to document the proposed rate development process, show detailed supporting calculations, and provide transparency to ratepayers and elected officials. This document serves as the report for the 2025 Water Rate Study.

City of Thousand Oaks 2025 Water Rate Study

15 2.5 DISCLAIMERS
 All projections are based on the best available data provided to WRE by City staff between January and July of 2025.
 All table values are rounded to the nearest digit shown unless stated otherwise. However, all calculations are based on precise values. Attempting to manually recalculate the values displayed in any report tables may therefore produce slightly different results.  All current and proposed rates, charges, and tier allotments (i.e., the quantity of water charged at each tier rate) in this report are shown on a monthly basis.  The proposed results rely upon current and future year projections based on historical trends, input from City staff, and WRE’s professional judgement.  If formally adopted, the proposed rates will represent the maximum amount that customers may be charged in each year over the two-year rate-setting period. However, the City may implement lower rates over the rate-setting period without needing to undergo a new formal rate adoption process.

City of Thousand Oaks 2025 Water Rate Study

16 3. FINANCIAL PLAN UPDATE

3.1 FINANCIAL PLAN METHODOLOGY
A five-year financial plan update was conducted to project revenues, expenses, and cash reserves over the next five years through FY 2029/30. The primary goal of the financial plan update was to quantify the total amount of revenue required from water rates on an annual basis to support the Water Enterprise’s financial needs. Although the City only adopts two-year water rate schedules, the financial plan update spans five years to provide a broader planning horizon. The key steps in developing the financial plan were:
 Revenue projections: Annual Water Enterprise revenues from rates and other miscellaneous sources were projected over the study period. Rate revenues were projected based on current rates to establish baseline revenues from which the need for rate increases were evaluated.  Expense projections: Annual Water Enterprise expenses were projected over the study period. Expenses include O&M expenses, debt service (if applicable), and CIP project costs.  Evaluation of financial policies: The City’s reserve target for the Water Enterprise was reviewed and evaluated. Reserve targets are typically formally set by an agency’s policymakers and may need to be periodically evaluated and updated.  Status quo financial plan projections: Cash flow and reserve balances were projected over the study period in the absence of any proposed rate increases (i.e., the status quo). The status quo financial plan established a baseline scenario from which the need for rate increases could then be evaluated.
 Proposed financial plan projections: The magnitude and timing of annual proposed rate increases over the study period were evaluated and determined. Proposed rate increases (referred to as “revenue adjustments”) must generate sufficient revenue to recover the agency’s expenses and maintain adequate reserves. Other factors affecting revenue adjustments may include agency-specific policy objectives such as minimizing bill impacts to ratepayers. The proposed financial plan established the total annual rate revenue requirement over the rate-setting period.

3.2 REVENUES

CURRENT WATER RATES
The City’s water rates are adjusted on a calendar year rather than fiscal year basis in order to align with CMWD’s wholesale water rate adjustments, which occur each January. The City’s currently adopted two-year water rate schedule extends through Calendar Year (CY) 2025. Year two of the adopted rate schedule has been in effect since January 2025 (see Table 3-1 through Table 3-3). The City’s current water rate structure consists of the following types of rates and charges:

City of Thousand Oaks 2025 Water Rate Study

17  Fixed Charges: Each metered water connection (excluding private fire lines) is subject to a fixed meter charge, which varies based on meter size. Private fire lines6 are subject to separate fixed private fire line charges based on the diameter of the connection.  Commodity Rates: Each HCF of metered water use is subject to a commodity rate. Single- family residential customers are subject a three-tier commodity rate structure. Multi-family residential, non-residential, and groundwater7 customers are subject to the same uniform rate. Construction water use is subject to a higher uniform rate equal to the Tier 3 rate for single-family residential.
 Pumping Charges: Delivering water to customers at higher elevations is more costly due to the use of booster pump stations. Water use in higher elevation zones is therefore subject to an additional pumping charge per HCF. There are five pumping zones, with each associated pumping charge based on the number of “Lifts” (i.e., a unit representing elevation change).

Zone P1 represents the base elevation zone and is therefore exempt from pumping charges.

Table 3-1: Current Fixed Charges
Current Fixed Charges (per Month) January 2025
Fixed Meter Charges
3/4-inch meter and smaller $28.41
1-inch meter $44.52

1.5-inch meter $84.80
2-inch meter $133.14
3-inch meter $286.20
4-inch meter $511.76
6-inch meter $1,051.49

Fixed Private Fire Line Charges
2-inch connection and smaller $2.42
3-inch connection $6.98
4-inch connection $14.84
6-inch connection $43.08
8-inch connection $91.78
10-inch connection $165.02
12-inch connection $266.56

6 Private fire lines are dedicated private fire protection connections such as for fire- suppression sprinkler systems. 7 Groundwater includes water use from the City’s Hillcrest Drive well for street median irrigation.

City of Thousand Oaks 2025 Water Rate Study

18 Table 3-2: Current Commodity Rates
Current Commodity Rates (per HCF) January 2025
Single-Family Residential Tiered Commodity Rates
Tier 1: 0-12 HCF per Month $6.41
Tier 2: 13-30 HCF per Month $7.01
Tier 3: >30 HCF per Month $7.36

Uniform Commodity Rates
Multi-Family Residential, Non-Residential, & Groundwater $6.78 Construction $7.36

Table 3-3: Current Pumping Charges
Current Pumping Charges (per HCF) January 2025
Zone P1 (0 Lifts) N/A
Zone P2 (1 Lifts) $0.45
Zone P3 (1 Lifts) $0.45
Zone P4 (2 Lifts) $0.90
Zone P5 (3 Lifts) $1.35

UNITS OF SERVICE
Metered Water and Private Fire Line Connections
Units of service represent the quantity of billing units subject to rates and charges. The number of metered water connections and private fire line connections are the fixed charge units of service. The number of metered water connections and private fire lines were projected over the study period by increasing FY 2024/25 actual counts based on the annual account growth assumptions shown below in Table 3-4. Account growth assumptions are based on expected near-term development, as well as growth projections from the City’s 2020 Urban Water Management Plan. Projected metered water connections and private fire lines are shown in Table 3-5 and Table 3-6, respectively. Note that there are currently no single-family residential meters larger than 2-inch and that all construction connections have 3-inch temporary meters.

Table 3-4: Assumed Account Growth
Customer Class Annual Account Growth
Single-Family Residential 0.2%
Multi-Family Residential 1.0%
Non-Residential 0.5%
Construction 0.0%
Private Fire Lines 0.5%

City of Thousand Oaks 2025 Water Rate Study

19 Table 3-5: Number of Metered Water Service Connections Metered Water Connections
FY
2024/25
Actual
FY
2025/26
Projected
FY
2026/27
Projected
FY
2027/28
Projected
FY
2028/29
Projected
FY
2029/30
Projected
Single-Family Residential
3/4-inch meter and smaller 15,109 15,139 15,169 15,200 15,230 15,261 1-inch meter 807 809 810 812 813 815

1.5-inch meter 10 10 10 10 10 10
2-inch meter 1 1 1 1 1 1
Subtotal 15,927 15,959 15,991 16,023 16,055 16,087

Multi-Family Residential
3/4-inch meter and smaller 74 75 75 76 77 78
1-inch meter 23 23 23 24 24 24

1.5-inch meter 62 63 63 64 65 65
2-inch meter 77 78 79 79 80 81
3-inch meter 14 14 14 14 15 15
4-inch meter 8 8 8 8 8 8
6-inch meter 5 5 5 5 5 5
Subtotal 263 266 268 271 274 276

Non-Residential
3/4-inch meter and smaller 236 237 238 240 241 242
1-inch meter 239 240 241 243 244 245

1.5-inch meter 279 280 282 283 285 286
2-inch meter 235 236 237 239 240 241
3-inch meter 23 23 23 23 23 24
4-inch meter 16 16 16 16 16 16
6-inch meter 2 2 2 2 2 2
Subtotal 1,030 1,035 1,040 1,046 1,051 1,056

Construction
3-inch meter 23 23 23 23 23 23
Subtotal 23 23 23 23 23 23

Total 17,243 17,283 17,322 17,362 17,402 17,442
% Change 0.2% 0.2% 0.2% 0.2% 0.2%

City of Thousand Oaks 2025 Water Rate Study

20 Table 3-6: Number of Private Fire Lines
Private Fire Line
Connections
FY 2024/25
Actual
FY 2025/26
Projected
FY 2026/27
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
2-inch and smaller 0 0 0 0 0 0
3-inch 7 7 7 7 7 7
4-inch 110 111 111 112 112 113
6-inch 75 75 76 76 77 77
8-inch 19 19 19 19 19 19
10-inch 1 1 1 1 1 1
12-inch 0 0 0 0 0 0
Total 212 213 214 215 216 217
% Change 0.5% 0.5% 0.5% 0.5% 0.5%

Water Use
Annual water use by customer class and tier (in HCF) are the units of service for commodity rates.

Total annual water use in AFY was projected over the study period based on an evaluation of actual water demand over the past five years (see Figure 3-1). Actual water demand in FY 2024/25 was very close to the five-year historical average and was deemed reflective of baseline demand conditions in the near-term. Therefore, annual demand over the next five years was projected by increasing FY 2024/25 actual demand based on the account growth assumptions shown previously in Table 3-4.

Thus, all projected increases in total water demand over the next five years are solely due to account growth. Water demand on a per connection basis is assumed to remain constant at FY 2024/25 levels.

Note that annual water demand projections assume Stage 1 water supply conditions per the City’s 2020 Water Shortage Contingency Plan (i.e., 0-10% water supply shortage). Projected water use is shown by customer class and tier in Table 3-7, and by pumping zone in Table 3-8. Note that all water demand projections shown reflect metered water use and do not include system water losses.

City of Thousand Oaks 2025 Water Rate Study

21 Figure 3-1: Historical and Projected Water Use (AFY)

City of Thousand Oaks 2025 Water Rate Study

22 Table 3-7: Projected Water Use by Customer Class and Tier (HCF) Metered Water Use
FY 2024/25
Actual
FY 2025/26
Projected
FY 2026/27
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
Single-Family Residential (HCF)
Tier 1: 0-12 HCF per Month 1,627,016 1,630,271 1,633,531 1,636,798 1,640,072 1,643,352 Tier 2: 13-30 HCF per Month 672,677 674,023 675,371 676,722 678,075 679,431 Tier 3: >30 HCF per Month 226,180 226,632 227,086 227,540 227,995 228,451 Subtotal 2,525,874 2,530,926 2,535,988 2,541,060 2,546,142 2,551,234

Other (HCF)
Multi-Family Residential 315,268 318,421 321,605 324,821 328,069 331,350 Commercial/Irrigation/Groundwater 937,694 942,379 947,087 951,818 956,574 961,353 Construction 2,191 2,191 2,191 2,191 2,191 2,191
Subtotal 1,255,153 1,262,990 1,270,883 1,278,830 1,286,834 1,294,894

Total (HCF) 3,781,027 3,793,916 3,806,870 3,819,890 3,832,976 3,846,128 Total (AFY) 8,680 8,710 8,739 8,769 8,799 8,829
% Change 0.3% 0.3% 0.3% 0.3% 0.3%

City of Thousand Oaks 2025 Water Rate Study

23 Table 3-8: Projected Water Use by Pumping Zone (HCF) Water Use by Pumping Zone
FY 2024/25
Actual
FY 2025/26
Projected
FY 2026/27
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
Zone P1 (0 Lifts) 1,295,014 1,299,429 1,303,865 1,308,325 1,312,807 1,317,311 Zone P2 (1 Lifts) 1,088,837 1,092,549 1,096,279 1,100,029 1,103,797 1,107,584 Zone P3 (1 Lifts) 785,068 787,744 790,434 793,137 795,854 798,585 Zone P4 (2 Lifts) 588,357 590,363 592,378 594,404 596,441 598,487 Zone P5 (3 Lifts) 23,751 23,832 23,913 23,995 24,077 24,160 Total Water Use (HCF) 3,781,027 3,793,916 3,806,870 3,819,890 3,832,976 3,846,128 % Change 0.3% 0.3% 0.3% 0.3% 0.3%
City of Thousand Oaks 2025 Water Rate Study

24 REVENUE FROM CURRENT RATES
Annual revenues from current rates (effective January 2025) were projected over the study period (see Table 3-9). Fixed charge revenues were calculated by multiplying the current monthly charges (from Table 3-1) by the respective number of connections each year (from Table 3-5 and Table 3-6) and then multiplying by 12 months. Commodity rate revenues were calculated by multiplying current commodity rates (from Table 3-2) by the respective units of water use in each customer class and tier (from Table 3-7). Pumping charge revenues were calculated by multiplying current pumping charges (from Table 3-3) by the respective units of water use in each pumping zone (from Table 3-8).

Table 3-9: Revenue from Current Rates
Description
FY 2025/26
Projected
FY 2026/27
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
Fixed Meter Charges $7,229,415 $7,250,291 $7,271,257 $7,292,313 $7,313,461 Commodity Rates $25,407,294 $25,494,490 $25,582,128 $25,670,213 $25,758,747 Pumping Charges $1,409,631 $1,414,444 $1,419,282 $1,424,144 $1,429,031 Total $34,046,340 $34,159,225 $34,272,667 $34,386,670 $34,501,238 % Change 0.3% 0.3% 0.3% 0.3%

MISCELLANEOUS NON-RATE REVENUES
The Water Enterprise also collects revenue from miscellaneous non-rate sources, which were projected over the study period (see Table 3-10). Miscellaneous non-rate revenues in FY 2025/26 and FY 2026/27 are from the currently adopted two-year budget. Projected revenues were held constant at FY 2026/27 budgeted amounts in the final three years of the study period to ensure sufficiently conservative revenue projections, except for interest income. Revenue from interest income was projected beginning in FY 2027/28 based on projected annual cash reserve levels and an assumed 2% annual interest rate. Declining interest income is due to the projected drawdown of cash reserves over the study period.

Table 3-10: Miscellaneous Non-Rate Revenue
Description
FY 2025/26
Budget
FY 2026/27
Budget
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
Interest Income $1,035,939 $893,689 $677,336 $619,891 $592,770 Miscellaneous Revenue $388,000 $391,000 $391,000 $391,000 $391,000 Plant Investment Fees $200,000 $250,000 $250,000 $250,000 $250,000 Stand-By (Fire Detectors) $95,000 $100,000 $100,000 $100,000 $100,000 Backflow Prevention $40,000 $40,000 $40,000 $40,000 $40,000 Rental of City Facilities $33,000 $33,000 $33,000 $33,000 $33,000 Installation - Meter $25,000 $25,000 $25,000 $25,000 $25,000 Total $1,816,939 $1,732,689 $1,516,336 $1,458,891 $1,431,770 % Change -4.6% -12.5% -3.8% -1.9%
City of Thousand Oaks 2025 Water Rate Study

25 REVENUE SUMMARY
A summary of total projected revenues over the study period is shown below (see Table 3-11), and includes both revenue from current rates (from Table 3-9) and miscellaneous non-rate revenues (from Table 3-10). For FY 2025/26 and FY 2026/27, revenue from current rates was projected by WRE.

All other revenues in FY 2025/26 and FY 2026/27are budgeted amounts. Note that the revenue totals shown below do not account for any proposed rate increases or pass-through adjustments (which are addressed in subsequent report sections).

Table 3-11: Current Revenue Summary
Revenues
FY 2025/26
Budget/
Projected
FY 2026/27
Budget/
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
Current Water Rates $34,046,340 $34,159,225 $34,272,667 $34,386,670 $34,501,238 Interest Income $1,035,939 $893,689 $677,336 $619,891 $592,770 Miscellaneous Revenue $388,000 $391,000 $391,000 $391,000 $391,000 Plant Investment Fees $200,000 $250,000 $250,000 $250,000 $250,000 Stand-By (Fire Detectors) $95,000 $100,000 $100,000 $100,000 $100,000 Backflow Prevention $40,000 $40,000 $40,000 $40,000 $40,000 Rental of City Facilities $33,000 $33,000 $33,000 $33,000 $33,000 Installation - Meter $25,000 $25,000 $25,000 $25,000 $25,000 Total $35,863,279 $35,891,914 $35,789,003 $35,845,561 $35,933,009 % Change 0.1% -0.3% 0.2% 0.2%

3.3 OPERATIONS & MAINTENANCE EXPENSES

WHOLESALE WATER PURCHASE COST PROJECTIONS
Wholesale Water Purchase Cost Overview
The Water Enterprise’s sole water supply source is imported water purchased from CMWD. The costs associated with purchasing wholesale water from CMWD constitute over half of the Water Enterprise’s total O&M expenses. Furthermore, water purchase cost increases have significantly outpaced other Water Enterprise O&M cost increases. Wholesale water rates and charges paid to CMWD by the City include a Capacity Reservation Charge, Readiness-to-Service Charge, and Full Service Treated Tier 1 Rates. The Capacity Reservation Charge and Readiness-to-Service Charge are allocated to CMWD’s purveyors in proportion to historical peak capacity and ten-year rolling average water sales, respectively. However, these charges are treated as fixed for the purposes of this rate study, as future year changes to the purveyor allocations cannot be reasonably forecasted. Full Service Treated Tier 1 Rates are charged per acre-foot (AF) of treated water delivered by CMWD, and are thus treated as variable expenses (i.e., vary based on customer water demand).

City of Thousand Oaks 2025 Water Rate Study

26 Wholesale Water Purchase Cost Assumptions
Wholesale water purchase cost projections were developed on a calendar year basis to align with CMWD wholesale rate adjustments that occur each January. Key assumptions underlying the wholesale water purchase cost projections were first established (see Table 3-12).

CMWD has adopted wholesale rates through CY 2026. Annual increases in CY 2027 through CY 2030 are based on forecasts provided by CMWD during its April 24, 2025, purveyor meeting. Projected water purchase unit costs were calculated by increasing CY 2026 adopted rates by the assumed annual increases shown below. Unit costs for the two fixed charges represent the Water Enterprise’s total annual charge. The Full Service Treated Tier 1 Rate unit cost reflects the cost per AF delivered. Next, annual water purchases in AF were projected on a calendar year basis by incorporating 50% of customer water demand from the two corresponding fiscal years (from Table 3-7) and then applying a 2% loss factor to account for estimated system water losses.

Table 3-12: Wholesale Water Purchase Cost Assumptions (CALENDAR YEAR BASIS) Description CY 2025 CY 2026 CY 2027 CY 2028 CY 2029 CY 2030 Purchased Water Unit Cost Increases Adopted Adopted Projected Projected Projected Projected CMWD Capacity Reservation Charge 3.0% 5.7% 9.8% 10.4% 7.0% 5.1% CMWD Readiness-to-Service Charge 8.8% 9.0% 7.0% 18.8% 21.9% 9.8% CMWD Full Service Treated Tier 1 Rate 9.5% 8.6% 11.6% 7.5% 5.1% 4.4%

Purchased Water Unit Costs Adopted Adopted Projected Projected Projected Projected CMWD Capacity Reservation Charge (Fixed) $788,257 $833,525 $914,877 $1,009,789 $1,080,853 $1,135,991 CMWD Readiness-to-Serve Charge (Fixed) $1,029,700 $1,122,047 $1,200,333 $1,425,717 $1,738,082 $1,908,638 CMWD Full Service Treated Tier 1 Rate (per AF) $1,895 $2,058 $2,296 $2,468 $2,594 $2,708

Water Purchases from CMWD (AF) Projected Projected Projected Projected Projected Projected Customer Water Demand (excl. Groundwater)8 8,693 8,723 8,753 8,783 8,813 8,843 Plus Estimated System Water Losses 180 181 182 182 183 184 Total 8,873 8,904 8,934 8,965 8,996 9,026

8 Excludes 1.7 AFY of water supplied by the City’s Hillcrest Drive well for street median irrigation.

City of Thousand Oaks 2025 Water Rate Study

27 Wholesale Water Purchase Cost Projections (Calendar Year Basis) Wholesale water purchase cost projections are shown on a calendar year basis in Table 3-13. Projected costs, including unit cost increases, are shown in Lines 1-5. The two fixed charges (Lines 2-3) equal the projected unit costs from Table 3-12. The Full Service Treated Tier 1 Rates (Line 4) equals the unit rate per AF multiplied by total annual water purchases in AF (from Table 3-12). The City’s currently adopted water rate ordinance includes a provision that allows the Water Enterprise to recover any increased costs resulting from CMWD wholesale rate increases by implementing “pass-through adjustments.” In practice, this means that commodity rates may be adjusted at any time during the adopted rate period to offset any cost increases directly resulting from CMWD wholesale rate increases. WRE recommends that the City maintain its existing pass-through policy to ensure that wholesale water purchase costs will be adequately recovered. Water supply costs eligible to be recovered by pass-through adjustments were estimated by first projecting water purchases costs exclusive of any unit cost increases beyond CY 2025 (Lines 8-12). Projected water supply pass-through costs (Line 14) equal the difference between projected costs with and without projected wholesale rate increases (Lines 5 and 12).

Table 3-13: Wholesale Water Purchase Cost Projections (CALENDAR YEAR BASIS) Line Description
CY 2025
Projected
CY 2026
Projected
CY 2027
Projected
CY 2028
Projected
CY 2029
Projected
CY 2030
Projected
1 Projected Costs including Unit Cost Increases
2 CMWD Capacity Reservation Charge $788,257 $833,525 $914,877 $1,009,789 $1,080,853 $1,135,991 3 CMWD Readiness-to-Serve Charge $1,029,700 $1,122,047 $1,200,333 $1,425,717 $1,738,082 $1,908,638 4 CMWD Full Service Treated Tier 1 Rates $16,815,276 $18,323,971 $20,512,943 $22,125,114 $23,334,422 $24,443,585 5 Total $18,633,233 $20,279,543 $22,628,153 $24,560,620 $26,153,358 $27,488,214 6 % Change 8.8% 11.6% 8.5% 6.5% 5.1%
7 8 Projected Costs excluding Unit Cost Increases
9 CMWD Capacity Reservation Charge $788,257 $788,257 $788,257 $788,257 $788,257 $788,257 10 CMWD Readiness-to-Serve Charge $1,029,700 $1,029,700 $1,029,700 $1,029,700 $1,029,700 $1,029,700 11 CMWD Full Service Treated Tier 1 Rates $16,815,276 $16,872,655 $16,930,325 $16,988,287 $17,046,542 $17,105,094 12 Total $18,633,233 $18,690,612 $18,748,282 $18,806,244 $18,864,499 $18,923,051 13 14 Water Supply Pass-Through Costs N/A $1,588,930 $3,879,871 $5,754,376 $7,288,858 $8,565,164 City of Thousand Oaks 2025 Water Rate Study

28 Wholesale Water Purchase Cost Projections (Fiscal Year Basis) Financial plan projections were developed on a fiscal year basis. Therefore, wholesale water purchase costs (including projected unit cost increases) and pass-through costs from Table 3-13 were converted to a fiscal year basis in Table 3-14 below. The two fixed charges were converted to a fiscal year basis by taking an average of the projected costs from the two corresponding calendar years. Full Service Treated Tier 1 Rates were converted to a fiscal year basis by attributing 50% of water purchases within each fiscal year to each corresponding calendar year.

Table 3-14: Wholesale Water Purchase Cost Projections (FISCAL YEAR BASIS) Description
FY 2025/26
Projected
FY 2026/27
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
Wholesale Water Purchase Costs
CMWD Capacity Reservation Charge $810,891 $874,201 $962,333 $1,045,321 $1,108,422 CMWD Readiness-to-Serve Charge $1,075,874 $1,161,190 $1,313,025 $1,581,900 $1,823,360 CMWD Full Service Treated Tier 1 Rates $17,568,314 $19,416,563 $21,317,621 $22,728,701 $23,888,019 Total $19,455,079 $21,451,954 $23,592,979 $25,355,922 $26,819,801 % Change 10.3% 10.0% 7.5% 5.8%

Water Supply Pass-Through Costs $793,228 $2,732,579 $4,815,790 $6,520,624 $7,926,101

City of Thousand Oaks 2025 Water Rate Study

29 OTHER O&M EXPENSE PROJECTIONS
All O&M expenses other than wholesale water purchase costs were projected over the study period based on the currently adopted two-year budget. Projected expenses in FY 2025/26 and FY 2026/27 equal the adopted budget. Beginning in FY 2027/28, other O&M expenses were projected by increasing FY 2026/27 budget amounts by the annual inflationary increases shown in Table 3-15. The inflationary assumptions shown are based on historical cost increases, anticipated increases per direction from City staff, as well as inflationary trends across the water utility industry and broader economy.

Table 3-15: O&M Expense Annual Inflationary Assumptions Expense Category
Annual
Inflation
General 2.5%
Salaries/Benefits 4.0%
Electricity 3.0%
Construction 3.0%

Nearly all O&M expenses other than wholesale water purchase costs were treated as fixed costs.

However, booster pump station electricity costs were treated as variable costs because they represent a substantial cost that varies based on the quantity of water delivered to customers.

Booster pump station electricity costs were therefore increased in proportion to overall changes in annual water demand after adjusting for annual inflation. Please refer to Appendix A for detailed annual O&M expense projections on a line item basis.

City of Thousand Oaks 2025 Water Rate Study

30 O&M EXPENSE SUMMARY
A summary of projected O&M expenses is shown in Table 3-16 below. For FY 2025/26 and FY 2026/27, wholesale water purchase costs were projected by WRE. All other O&M expenses in FY 2025/26 and FY 2026/27 are budgeted amounts. Total O&M expenses are projected to increase by about 6.3% per year on average, primarily due to significant anticipated increases to wholesale water purchase costs. O&M expenses, excluding wholesale water purchase costs, are only projected to increase by 3.2% per year on average due to inflation.

Table 3-16: Summary of O&M Expenses
O&M Expenses
FY 2025/26
Budget/
Projected
FY 2026/27
Budget/
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
Administration $2,988,520 $3,130,919 $3,215,284 $3,302,002 $3,391,141 Capital/ Development Engineering Services $2,213,598 $2,284,430 $2,374,692 $2,468,535 $2,566,103 Conservation $570,091 $678,719 $700,274 $722,550 $745,575 Groundwater $64,971 $96,851 $100,284 $103,842 $107,529 Municipal Service Center $780,748 $805,505 $832,967 $861,408 $890,865 Pumping $1,279,250 $1,331,088 $1,375,489 $1,421,410 $1,468,904 Quality Assurance $769,724 $801,770 $828,041 $855,218 $883,333 Reservoirs $504,063 $525,792 $543,207 $561,227 $579,875 Storage & Distribution (Water Purchases) $19,455,079 $21,451,954 $23,592,979 $25,355,922 $26,819,801 Storage & Distribution (Other) $4,531,821 $4,408,319 $4,559,872 $4,716,840 $4,879,423 Water Capital Program $120,300 $127,700 $131,531 $135,477 $139,541 Total $33,278,165 $35,643,047 $38,254,618 $40,504,430 $42,472,090 % Change 7.1% 7.3% 5.9% 4.9%

3.4 DEBT SERVICE
The City’s Water Enterprise has no outstanding debt. Furthermore, the City does not currently plan to issue any new debt over the next five years to finance any Water Enterprise CIP projects. Therefore, no debt service was incorporated into the financial plan projections.

City of Thousand Oaks 2025 Water Rate Study

31 3.5 CAPITAL IMPROVEMENT PROGRAM EXPENSES
The City’s currently adopted CIP budget includes $74.5 million of Water Enterprise CIP project costs over the next five years (including carryover). Detailed CIP project expenses are provided in Appendix B and include substantial costs for automated metering infrastructure installation, water main replacements, reservoir/pump station upgrades, and other infrastructure repair and replacement. While the CIP budget identifies capital investments needed to maintain system long-term reliability, it is expected that a portion of the five-year CIP will likely be deferred beyond the study period. Furthermore, incorporating the full cost of the five-year CIP would result in unacceptably high bill impacts to customers. Therefore, WRE worked with City staff to develop a modified CIP funding scenario that more closely reflects expected CIP project execution over the study period (see Table 3-17). This proposed CIP funding scenario is based on the five-year CIP from the adopted CIP budget and applies the following adjustments:
 Five-year CIP costs (Line 1) were adjusted for inflation by applying 3% annual increases beginning in FY 2027/28.9  Execution factors (Lines 4) were applied to inflated CIP expenses (Line 3) to estimate executed CIP each year (Line 5).10  The five-year total for executed CIP less grants11 (Line 7) was distributed evenly across the study period to reflect annual CIP funding requirements from Water Enterprise rates and reserves (Line 8).

Table 3-17: CIP Funding Assumptions
Line Description FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Total 1 Five-Year CIP (per Adopted CIP Budget) $25,722,977 $16,937,750 $10,679,300 $10,390,000 $10,815,000 $74,545,027 2 Annual Inflationary Adjustment N/A N/A 3% 3% 3%
3 Five-Year CIP (adjusted for inflation) $25,722,977 $16,937,750 $10,999,679 $11,022,751 $11,817,843 $76,501,000 4 Execution Factor 60% 75% 75% 75% 75% 70%
5 Executed CIP $15,433,786 $12,703,313 $8,249,759 $8,267,063 $8,863,382 $53,517,303 6 Grants for CIP $0 $1,300,000 $0 $0 $0 $1,300,000 7 Executed CIP (less grants) $15,433,786 $11,403,313 $8,249,759 $8,267,063 $8,863,382 $52,217,303 8 Levelized CIP Funding $10,443,461 $10,443,461 $10,443,461 $10,443,461 $10,443,461 $52,217,303

9 Consistent with long-term annual changes in the Engineering News-Record’s Construction Cost Index (20-City Average). 10 Execution factors were determined based on historical CIP execution rates as well as City staff estimates of future project execution. 11 The Lang Ranch Power Backup Project is contingent upon grant/incentive funding programs which are expected to provide $1.3 million.

City of Thousand Oaks 2025 Water Rate Study

32 3.6 RESERVE TARGETS
Retail water purveyors need to maintain sufficient cash reserves to cover expenses and mitigate financial risks. It is common practice for public retail water utilities to establish reserve target levels to ensure that cash reserves are maintained at appropriate levels. The Water Enterprise’s current reserve policy specifies target levels for three separate reserves (see Table 3-18):
 Operating Reserve: The current target is set equal to 25% of annual O&M expenses and is intended to provide sufficient cash on hand all times to cover O&M expenses. The current target is consistent with industry standards and sufficient for agencies that bill on a monthly basis. No changes to the current target are recommended at this time.  Capital Reserve: The current target is set equal to two years of average annual CIP expenses and is intended to provide sufficient cash on hand to cover ongoing construction costs associated with CIP projects. The current reserve target will be burdensome to maintain due to substantial planned CIP and would require significant rate increases to fully fund. WRE recommends reducing the capital reserve target from two years to one year of average annual CIP. This will mitigate rate increases, allow the Water Enterprise to draw upon its substantial current reserves to meet near-term CIP funding needs, and more closely align with industry norms.
 Emergency Reserve: The current target is set equal to the replacement cost of the water system’s most critical capital asset (Wilder Reservoir) and is intended to provide sufficient cash on hand in the event of an unexpected critical asset failure. The current target is consistent with industry standards. No changes are recommended at this time.

Table 3-18: Target Reserve Policy
Reserve Current Target Proposed Target
Operating Reserve 25% of annual O&M expenses 25% of annual O&M expenses Capital Reserve Two years of average annual CIP One year of average annual CIP Emergency Reserve Replacement cost of most critical asset Replacement cost of most critical asset

Proposed target reserve levels were projected on an annual basis (see Table 3-19). The operating reserve target equals 25% of projected annual O&M expenses (from Table 3-16). The capital reserve target equals annual levelized CIP funding (from Table 3-17). The emergency reserve target equals the current estimated replacements cost of Wilder Reservoir.

Table 3-19: Projected Target Reserve Levels
Reserve FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Operating Reserve $8,319,541 $8,910,762 $9,563,655 $10,126,108 $10,618,023 Capital Reserve $10,443,461 $10,443,461 $10,443,461 $10,443,461 $10,443,461 Emergency Reserve $6,072,934 $6,072,934 $6,072,934 $6,072,934 $6,072,934 Total $24,835,936 $25,427,156 $26,080,049 $26,642,502 $27,134,417 City of Thousand Oaks 2025 Water Rate Study

33 3.7 STATUS QUO FINANCIAL PLAN

STATUS QUO FINANCIAL PLAN
Status quo financial plan projections were developed to evaluate whether current rates plus pass- through adjustments12 will generate sufficient revenue over the study period to meet the Water Enterprise’s financial needs (see Table 3-20). The status quo financial plan combines revenues and expenses from preceding subsections to project cash flow and reserve balances on an annual basis.

Sources of funds include current rate revenues and miscellaneous non-rate revenues (from Table 3-11) and water supply pass-through adjustments (from Table 3-14).13 Revenue adjustments (Line 3) represent rate increases in addition to water supply pass-through adjustments and are therefore excluded from the status quo financial plan. Uses of funds include O&M expenses (from Table 3-16) and CIP expenses (from Table 3-17). Projected reserve ending balances are compared to the projected reserve target levels based on the proposed reserve policy (from Table 3-19).

Under the status quo financial plan, Water Enterprise cash reserves are projected to fall below the proposed reserve target level in FY 2027/28 and continue to decline steadily through FY 2029/30. This is due to the reliance on reserves to cover a significant portion of CIP expenses. This demonstrates that current rates plus pass-through adjustments are insufficient to meet the Water Enterprise’s capital funding requirements over the five-year study period. A graphical summary of the status quo financial plan is provided in Figure 3-2.

12 Although water supply pass-through adjustments represent increases to current commodity rates, they are included in the status quo financial projections to ensure adequate recovery of wholesale water purchase costs. 13 Water supply pass-through adjustment revenues are intended to fully offset projected water supply pass -through costs.

Therefore, pass-through revenues are set to equal pass-through costs.

City of Thousand Oaks 2025 Water Rate Study

34 Table 3-20: Status Quo Financial Plan
Line Projected Cash Flow
FY 2025/26
Projected
FY 2026/27
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
1 Source of Funds
2 Revenue from Current Rates $34,046,340 $34,159,225 $34,272,667 $34,386,670 $34,501,238 3 Revenue Adjustments $0 $0 $0 $0 $0
4 Water Supply Pass-Through Adjustments $793,228 $2,732,579 $4,815,790 $6,520,624 $7,926,101 5 Miscellaneous Non-Rate Revenues14 $1,816,939 $1,732,689 $1,402,645 $1,234,195 $1,053,591 6 Total Source of Funds $36,656,507 $38,624,493 $40,491,101 $42,141,490 $43,480,930 7 8 Use of Funds
9 O&M Expenses $33,278,165 $35,643,047 $38,254,618 $40,504,430 $42,472,090 10 Debt Service $0 $0 $0 $0 $0
11 CIP Expenditures $10,443,461 $10,443,461 $10,443,461 $10,443,461 $10,443,461 12 Total Use of Funds $43,721,625 $46,086,507 $48,698,079 $50,947,891 $52,915,551 13 14 Cash Reserves
15 Beginning Cash Balance15 $47,094,673 $40,029,556 $32,567,542 $24,360,564 $15,554,163 16 Net Cash Flow16 ($7,065,118) ($7,462,014) ($8,206,978) ($8,806,401) ($9,434,620) 17 Ending Cash Balance $40,029,556 $32,567,542 $24,360,564 $15,554,163 $6,119,542 18 19 Target Reserve Level $24,835,936 $25,427,156 $26,080,049 $26,642,502 $27,134,417 20 Target Reserve Level Met? Yes Yes No No No

14 Miscellaneous non-rate revenues differ from totals shown in Table 3-10 in the final three years, as interest income is lower under the status quo financial plan (due to lower cash reserve levels).
15 Beginning FY 2025/26 cash balance reflects estimated cash reserves as of July 2025. 16 = [Line 6] – [Line 12].

City of Thousand Oaks 2025 Water Rate Study

35 Figure 3-2: Status Quo Financial Plan – Projected Cash Reserves

City of Thousand Oaks 2025 Water Rate Study

36 3.8 PROPOSED FINANCIAL PLAN

PROPOSED REVENUE ADJUSTMENTS
Revenue adjustments represent increased revenues resulting from proposed rate increases (before accounting for water supply pass-through adjustments). WRE worked with City staff to establish a proposed revenue adjustment scenario that would sufficiently meet the Water Enterprise’s funding requirements while minimizing customer bill impacts. The proposed revenue adjustment scenario includes revenue adjustments of 5% each year from FY 2025/26 through FY 2029/30 (see Table 3-21).

Note that revenue adjustments in the final three years of the five-year study period are for planning purposes only, as the City adopts two-year water rate schedules. All proposed revenue adjustments are assumed to be implemented in January of each fiscal year. The cumulative increase in revenues due to the proposed revenue adjustments is also shown in Table 3-21. Note that revenue adjustments do not account for additional rate revenue increases resulting from pass-through adjustments.

Table 3-21: Proposed Revenue Adjustments

PROPOSED FOR PLANNING PURPOSES ONLY
Description FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Revenue Adjustments
Revenue Adjustment % 5.0% 5.0% 5.0% 5.0% 5.0%
Effective Date Jan. 2026 Jan. 2027 Jan. 2028 Jan. 2029 Jan. 2030 Months Effective in Fiscal Year 6 6 6 6 6

Additional Rate Revenue
FY 2025/26 Revenue Adjustment $851,159 $1,707,961 $1,713,633 $1,719,334 $1,725,062 FY 2026/27 Revenue Adjustment $896,680 $1,799,315 $1,805,300 $1,811,315 FY 2027/28 Revenue Adjustment $944,640 $1,895,565 $1,901,881 FY 2028/29 Revenue Adjustment $995,172 $1,996,975 FY 2029/30 Revenue Adjustment $1,048,412
Total $851,159 $2,604,641 $4,457,589 $6,415,371 $8,483,644

City of Thousand Oaks 2025 Water Rate Study

37 PROPOSED FINANCIAL PLAN
Proposed financial plan projections were developed to evaluate the sufficiency of the proposed revenue adjustments over the study period (see Table 3-22). The proposed financial plan projections were calculated by applying the same methodology described previously for the status quo financial plan projections in Table 3-20. The primary difference is that revenue adjustments under the proposed financial plan (from Table 3-21) substantially increase total revenues relative to the status quo financial plan.

Under the proposed financial plan, cash reserves are projected to meet the proposed target level in all years. Cash reserves will still be drawn upon each year to cover a portion of CIP funding requirements. However, the reliance on cash reserves to cover CIP steadily declines over the study period as proposed revenue adjustments generate increased revenues. In FY 2025/26, about 60% of CIP expenses are projected to be covered by reserves. This is projected to decline to only 5% by FY 2029/30. The utilization of reserves to cover CIP over the study period is possible due to the proposed reduction to the capital reserve target. A graphical summary of the status quo financial plan is provided in Figure 3-3.

City of Thousand Oaks 2025 Water Rate Study

38 Table 3-22: Proposed Financial Plan
Line Projected Cash Flow FY 2025/26
Projected
FY 2026/27
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
1 Source of Funds
2 Revenue from Current Rates $34,046,340 $34,159,225 $34,272,667 $34,386,670 $34,501,238 3 Revenue Adjustments $851,159 $2,604,641 $4,457,589 $6,415,371 $8,483,644 4 Water Supply Pass-Through Adjustments $793,228 $2,732,579 $4,815,790 $6,520,624 $7,926,101 5 Miscellaneous Non-Rate Revenues $1,816,939 $1,732,689 $1,516,336 $1,458,891 $1,431,770 6 Total Source of Funds $37,507,666 $41,229,134 $45,062,382 $48,781,556 $52,342,754 7 8 Use of Funds
9 O&M Expenses $33,278,165 $35,643,047 $38,254,618 $40,504,430 $42,472,090 10 Debt Service $0 $0 $0 $0 $0
11 CIP Expenses $10,443,461 $10,443,461 $10,443,461 $10,443,461 $10,443,461 12 Total Use of Funds $43,721,625 $46,086,507 $48,698,079 $50,947,891 $52,915,551 13 14 Cash Reserves
15 Beginning Cash Balance17 $47,094,673 $40,880,714 $36,023,341 $32,387,644 $30,221,309 16 Net Cash Flow18 ($6,213,959) ($4,857,373) ($3,635,697) ($2,166,335) ($572,797) 17 Ending Cash Balance $40,880,714 $36,023,341 $32,387,644 $30,221,309 $29,648,512 18 19 Target Reserve Level $24,835,936 $25,427,156 $26,080,049 $26,642,502 $27,134,417 20 Target Reserve Level Met? Yes Yes Yes Yes Yes

17 Beginning FY 2025/26 cash balance reflects estimated cash reserves as of July 2025. 18 = [Line 6] – [Line 12].

City of Thousand Oaks 2025 Water Rate Study

39 Figure 3-3: Proposed Financial Plan – Projected Cash Reserves

City of Thousand Oaks 2025 Water Rate Study

40 4. PROPOSED RATE DEVELOPMENT

4.1 PROPOSED RATE CALCULATION METHODOLOGY
Section 4 shows the development of proposed fixed charges, commodity rates, and pumping charges based on the results of the proposed financial plan. No changes to the current water rate structure are proposed, with the exception of water shortage stage rates which are addressed separately in Section 5. Although the proposed financial plan covers a five-year period, the City only adopts two years of water rates at a time. Therefore, proposed water rates were only developed for the next two calendar years. No cost-of-service analysis was conducted as part of this rate study. Therefore, all proposed water rates were calculated by applying the following adjustments to current water rates:
 Proposed revenues adjustments: All current water rates were increased by the proposed 5% annual revenue adjustments. This establishes proposed rates that are consistent with the proposed financial plan revenue projections.
 Pass-through adjustments: Water supply pass-through adjustments were added to the proposed commodity rates. This is intended to recover cost increases directly resulting from CMWD wholesale water rate increases.

City of Thousand Oaks 2025 Water Rate Study

41 4.2 PROPOSED FIXED CHARGES
Proposed fixed charges were calculated by increasing current charges (effective January 2025) by 5% per year (per the proposed revenue adjustments from Table 3-21) and rounding up to the nearest cent (see Table 4-1).

Table 4-1: Proposed Fixed Charges
Fixed Charges Current
Proposed
January 2026
(5% Increase)
Proposed
January 2027
(5% Increase)
Fixed Meter Charges (per Month)
3/4-inch meter and smaller $28.41 $29.84 $31.34
1-inch meter $44.52 $46.75 $49.09

1.5-inch meter $84.80 $89.04 $93.50
2-inch meter $133.14 $139.80 $146.79
3-inch meter $286.20 $300.51 $315.54
4-inch meter $511.76 $537.35 $564.22
6-inch meter $1,051.49 $1,104.07 $1,159.28

City of Thousand Oaks 2025 Water Rate Study

42 4.3 PROPOSED COMMODITY RATES

CALCULATION OF PROPOSED WATER SUPPLY PASS THROUGH ADJUSTMENTS Proposed commodity rates incorporate both revenue adjustments and water supply pass-through adjustments. Pass-through adjustments are applied as uniform $ per HCF increases to all commodity rates. Pass-through adjustments were calculated on a calendar year basis to align with both CMWD wholesale rate adjustments and the City’s water rate adjustments, which occur each January (see Table 4-2). Projected pass-through costs (Line 1)19 were divided by total customer water demand in HCF (Line 2)20 to determine the cumulative pass-through rate per HCF (Line 3). The incremental pass- through adjustment (Line 4) represents the incremental annual change in the cumulative pass- through adjustment.21

Table 4-2: Water Supply Pass-Through Adjustment Calculation Line Description CY 2026 CY 2027
1 Projected Water Supply Pass-Through Costs $1,588,930 $3,879,871 2 Projected Water Demand (HCF) 3,800,393 3,813,380
3 Cumulative Pass-Through Adjustment (per HCF) $0.42 $1.02 4 Incremental Pass-Through Adjustment (per HCF) $0.42 $0.60

CALCULATION OF PROPOSED COMMODITY RATES
Proposed commodity rates on the following page (see Table 4-3) were calculated by increasing current rates (effective January 2025) by the 5% proposed annual revenue adjustment (from Table 3-21) and then adding the cumulative pass-through adjustment from Table 4-2. All revenue adjustments and pass-through adjustments were rounded up to the nearest cent.22 Note that all proposed commodity rates increase by over 10% per year due to the combined impact of 5% revenue adjustments plus water supply pass-through adjustments.

19 From Table 3-13.
20 Customer water demand was determined on a calendar year basis by incorporating 50% of water use from the two corresponding fiscal years (per Table 3-7).
21 The proposed pass-through adjustments are based on CMWD wholesale cost assumptions from Table 3-12. The City may adjust the proposed pass-through adjustments during the proposed rate period based on actual CMWD wholesale cost increases that vary from the projected values presented in this report . In the event that this occurs, customers must be notified in advance, in accordance with all relevant legal requirements, before updated pass-through adjustments may be implemented.
22 Some revenue adjustments slightly exceed 5.0% due to rounding up to the nearest cent.

City of Thousand Oaks 2025 Water Rate Study

43 Table 4-3: Proposed Commodity Rates
Commodity Rates (per HCF)
Proposed January 2026
(5% Inc. + Pass-Through)
Proposed January 2027
(5% Inc. + Pass-Through)
($/HCF) (%) ($/HCF) (%)
Single-Family Residential Tier 1 Commodity Rate
Existing Rate $6.41 $6.74
Revenue Adjustment $0.33 5.1% $0.34 5.0%
Tier 1 Rate Excluding Pass-Through Adjustment $6.74 $7.08

Pass-Through Adjustment $0.42 6.6% $1.02 8.4%
Total Tier 1 Rate $7.16 11.7% $8.10 13.1%

Single-Family Residential Tier 2 Commodity Rate
Existing Rate $7.01 $7.37
Revenue Adjustment $0.36 5.1% $0.37 5.0%
Tier 2 Rate Excluding Pass-Through Adjustment $7.37 $7.74

Pass-Through Adjustment $0.42 6.0% $1.02 7.7%
Total Tier 2 Rate $7.79 11.1% $8.76 12.5%

Single-Family Residential Tier 3 Commodity Rate
Existing Rate $7.36 $7.73
Revenue Adjustment $0.37 5.0% $0.39 5.0%
Tier 3 Rate Excluding Pass-Through Adjustment $7.73 $8.12

Pass-Through Adjustment $0.42 5.7% $1.02 7.4%
Total Tier 3 Rate $8.15 10.7% $9.14 12.1%

Multi-Family Residential, Non-Residential, & Groundwater Commodity Rate Existing Rate $6.78 $7.12
Revenue Adjustment $0.34 5.0% $0.36 5.1%
Rate Excluding Pass-Through Adjustment $7.12 $7.48

Pass-Through Adjustment $0.42 6.2% $1.02 8.0%
Total Rate $7.54 11.2% $8.50 12.7%

Temporary Construction Commodity Rate
Existing Rate $7.36 $7.73
Revenue Adjustment $0.37 5.0% $0.39 5.0%
Rate Excluding Pass-Through Adjustment $7.73 $8.12

Pass-Through Adjustment $0.42 5.7% $1.02 7.4%
Total Rate $8.15 10.7% $9.14 12.1%

City of Thousand Oaks 2025 Water Rate Study

44 PROPOSED PUMPING CHARGES
Proposed pumping charges per HCF were calculated for Zones P2/P3 (one Lift) by increasing the current charges (effective January 2025) by 5% per year (per the proposed revenue adjustments from Table 3-21) and rounding up to the nearest cent (see Table 4-4). Proposed Zone P4 (two Lifts) and Zone P5 (three Lifts) pumping charges were calculated by multiplying the Zone P2/P3 charge by the corresponding number of Lifts.

Table 4-4: Proposed Pumping Charges
Pumping Charges (per HCF) Current
Proposed
January 2026
(5% Increase)
Proposed
January 2027
(5% Increase)
Zone P1 (0 Lifts) N/A N/A N/A
Zone P2 (1 Lifts) $0.45 $0.48 $0.51
Zone P3 (1 Lifts) $0.45 $0.48 $0.51
Zone P4 (2 Lifts) $0.90 $0.96 $1.02
Zone P5 (3 Lifts) $1.35 $1.44 $1.53

4.4 PROPOSED WATER RATE SCHEDULE
The proposed two-year water rate schedule is summarized on the following page in Table 4-5. The proposed rate schedule includes proposed fixed monthly charges (from Table 4-1), commodity rates (from Table 4-3), and pumping charges (from Table 4-4). Proposed water shortage stage rates are addressed separately in Section 5 and are not included in Table 4-5.

City of Thousand Oaks 2025 Water Rate Study

45 Table 4-5: Proposed Two-Year Water Rate Schedule
Proposed Water Rates Current
Proposed
January
2026
Proposed
January
2027
Fixed Meter Charges (per Month)
3/4-inch meter and smaller $28.41 $29.84 $31.34
1-inch meter $44.52 $46.75 $49.09

1.5-inch meter $84.80 $89.04 $93.50
2-inch meter $133.14 $139.80 $146.79
3-inch meter $286.20 $300.51 $315.54
4-inch meter $511.76 $537.35 $564.22
6-inch meter $1,051.49 $1,104.07 $1,159.28

Uniform Commodity Rates
Multi-Family Residential, Non-Residential, & Groundwater $6.78 $7.54 $8.50 Construction $7.36 $8.15 $9.14

Pumping Charges (per HCF)
Zone P1 (0 Lifts) N/A N/A N/A
Zone P2 (1 Lifts) $0.45 $0.48 $0.51
Zone P3 (1 Lifts) $0.45 $0.48 $0.51
Zone P4 (2 Lifts) $0.90 $0.96 $1.02
Zone P5 (3 Lifts) $1.35 $1.44 $1.53

City of Thousand Oaks 2025 Water Rate Study

46 4.5 BILL IMPACTS
Sample monthly bills based on current and proposed rates were calculated to evaluate impacts to typical single-family residential customers in 2026. A comparison of single-family residential bills at varying levels of water use under current 2025 rates and proposed 2026 rates is provided in Figure 4-1 for Zone P1 (no Lifts) and Figure 4-2 for Zones P2/P3 (one Lift). All sample bills incorporate fixed meter charges for a 3/4-inch or smaller meter, which is the meter size of nearly 95% of all single-family residential connections. Annual bill increases exceed the 5% proposed revenue adjustments due to the additional rate increases resulting from water supply pass-through adjustments.

Figure 4-1: Single-Family Residential Monthly Bill Impacts in 2026 (Zone P1)

City of Thousand Oaks 2025 Water Rate Study

47 Figure 4-2: Single-Family Residential Monthly Bill Impacts in 2026 (Zones P2/P3)

City of Thousand Oaks 2025 Water Rate Study

48 5. WATER SHORTAGE STAGE RATES

5.1 WATER SHORTAGE STAGE RATES OVERVIEW
Public retail water agencies in California have faced worsening water supply shortages and more volatile periods of drought in recent years. During periods of water supply shortage, customer water demand declines which results in reduced commodity rate revenues. Because water utility revenues are predominantly variable, but costs are largely fixed, revenue losses tend to significantly exceed cost savings when customer water demand decreases. This poses a significant financial challenge to water agencies and may lead to insufficient cost recovery.

Water shortage stage rates are a common tool used by public retail water agencies in California to mitigate financial risks during periods of water supply shortage. Water shortage stage rates function as incremental increases to commodity rates that are designed to offset financial losses during periods of reduced water sales. Water shortage stage rates typically are implemented during formally declared water supply shortage stages, which are usually defined in an agency’s Water Shortage Contingency Plan.

The City has never previously adopted or implemented water shortage stage rates. However, significant constraints on imported water deliveries from the State Water Project due to drought in recent years have presented serious water supply challenges to the City’s water system. This has resulted in volatile customer water demand in recent years in response to supply shortages and subsequent conservation efforts. To address the financial risk posed by volatile water demand conditions, City staff directed WRE to evaluate the potential for and to develop proposed water shortage stage rates for consideration by City Council.

5.2 WATER SHORTAGE CONTINGENCY PLAN
The City’s 2020 Water Shortage Contingency Plan defines six distinct water shortage stages.

Conservation measures are specified for each shortage stage to help ensure that customer demand does not exceed reduced supply availability. The proposed financial plan in Section 3 and proposed rates in Section 4 assume water demand levels consistent with Stage 1, which represents a 0-10% water supply shortage (i.e., baseline demand). WRE developed proposed water shortage stage rates for the remaining five shortage stages defined below:
 Stage 2: 11-20% supply reduction
 Stage 3: 21-30% supply reduction
 Stage 4: 31-40% supply reduction
 Stage 5: 41-50% supply reduction
 Stage 6: >50% supply reduction

City of Thousand Oaks 2025 Water Rate Study

49 5.3 WATER SHORTAGE STAGE RATES METHODOLOGY
Proposed water shortage stage rates were developed for Stages 2-6 of the Water Shortage Contingency Plan for the two-year rate-setting period (i.e., CY 2026 and CY 2027). The proposed water shortage stage rates were calculated on a calendar year basis to align with the City’s water rate adjustments. The key steps in developing the proposed water shortage stage rates were:
 Net revenue loss projections: Reductions in commodity rate revenue, variable water supply cost savings, and additional water shortage-related O&M expenses were projected to estimate net revenue losses during each water shortage stage.  Water shortage surcharge calculations: Water shortage surcharges were calculated for each stage based on the increase to commodity rates required to fully recover projected net revenues losses.
 Development of proposed water shortage stage rate schedule: Proposed water shortage stage rates for were calculated by uniformly adding water shortage surcharges to the proposed commodity rates.

5.4 WATER SHORTAGE STAGE RATE SURCHARGE DEVELOPMENT
Water shortage stage rate surcharges were calculated separately for CY 2026 (see Table 5-1) and CY 2027 (see Table 5-2). However, the same methodology was applied to each year. Net revenue losses and water shortage stage rate surcharges were calculated as follows:
 Water demand by customer class and tier was estimated (see Lines 2-8) by uniformly applying the overall demand reductions (see Line 1) to baseline demand projections (from Table 3-7).23  Reduced commodity rate revenues (Lines 10-17) were projected for each stage by multiplying projected demand (Lines 2-7) by the proposed commodity rates (from Table 4-5).  Reduced wholesale water purchase costs (Line 21) were projected for each stage by multiplying projected water purchases (Line 20)24 by CMWD’s Full Service Treated Tier 1 Rate per AF (from Table 3-12).
 Total net revenue losses (Line 27) for each stage were calculated by summing the commodity rate revenue loss (Line 24), 25 wholesale water purchase cost savings (Line 25),26 and additional O&M expenses due to water shortage (Line 26).27  The proposed surcharge (Line 29) for each stage was calculated by dividing the total net revenue loss (Line 27) by total customer water demand in HCF (Line 8).

23 Annual water use by customer class and tier was determined on a calendar year basis by incorporating 50% of customer water demand from the two corresponding fiscal years.
24 Water purchases for each stage equal total customer demand less groundwater plus 2% estimated water losses. 25 Line 24 equals the difference in total commodity rate revenues in Line 17 relative to Stage 1. 26 Line 25 equals the difference in total Full Service Treated Tier 1 Rates in Line 21 relative to Stage 1. 27 Additional O&M expenses due to water shortage include estimated additional costs to enforce conservation measures.

City of Thousand Oaks 2025 Water Rate Study

50 Table 5-1: CY 2026 Water Shortage Stage Rate Surcharge Calculation Line Description
Stage 1
(0-10%
Shortage)
Stage 2
(11-20%
Shortage)
Stage 3
(21-30%
Shortage)
Stage 4
(31-40%
Shortage)
Stage 5
(41-50%
Shortage)
Stage 6
(>50%
Shortage)
1 Projected Water Use (HCF) 0% reduction 15% reduction 25% reduction 35% reduction 45% reduction 65% reduction 2 Single-Family Residential Tier 1 1,631,901 1,387,116 1,223,926 1,060,736 897,545 571,165 3 Single-Family Residential Tier 2 674,697 573,492 506,023 438,553 371,083 236,144 4 Single-Family Residential Tier 3 226,859 192,830 170,144 147,458 124,772 79,401 5 Multi-Family Residential 320,013 272,011 240,010 208,008 176,007 112,004 6 Commercial/Irrigation/Groundwater 944,733 803,023 708,550 614,076 519,603 330,656 7 Construction 2,191 1,862 1,643 1,424 1,205 767
8 Total 3,800,393 3,230,334 2,850,295 2,470,256 2,090,216 1,330,138 9 10 Projected Commodity Rate Revenue
11 Single-Family Residential Tier 1 ($7.16/HCF) $11,684,410 $9,931,748 $8,763,307 $7,594,866 $6,426,425 $4,089,543 12 Single-Family Residential Tier 2 ($7.79/HCF) $5,255,888 $4,467,505 $3,941,916 $3,416,328 $2,890,739 $1,839,561 13 Single-Family Residential Tier 3 ($8.15/HCF) $1,848,901 $1,571,566 $1,386,676 $1,201,786 $1,016,896 $647,115 14 Multi-Family Residential ($7.54/HCF) $2,412,896 $2,050,962 $1,809,672 $1,568,383 $1,327,093 $844,514 15 Commercial/Irrigation/Groundwater ($7.54/HCF) $7,123,285 $6,054,792 $5,342,464 $4,630,135 $3,917,807 $2,493,150 16 Construction ($8.15/HCF) $17,857 $15,178 $13,392 $11,607 $9,821 $6,250 17 Total $28,343,237 $24,091,752 $21,257,428 $18,423,104 $15,588,780 $9,920,133 18 19 Variable Water Purchase Costs
20 Water Purchases from CMWD (AF) 8,904 7,568 6,678 5,787 4,897 3,116 21 Full Service Treated Tier 1 Rates ($2,058/AF) $18,323,971 $15,575,375 $13,742,978 $11,910,581 $10,078,184 $6,413,390 22 23 Change in Net Revenue
24 Commodity Rate Revenue Loss $0 ($4,251,486) ($7,085,809) ($9,920,133) ($12,754,457) ($18,423,104) 25 Water Purchase Cost Savings $0 $2,748,596 $4,580,993 $6,413,390 $8,245,787 $11,910,581 26 Additional O&M Expenses due to Water Shortage $0 $0 ($150,000) ($300,000) ($400,000) ($500,000) 27 Total $0 ($1,502,890) ($2,654,817) ($3,806,743) ($4,908,670) ($7,012,523) 28 29 Proposed Surcharge (per HCF) $0.00 $0.47 $0.94 $1.55 $2.35 $5.28 City of Thousand Oaks 2025 Water Rate Study

51 Table 5-2: CY 2027 Water Shortage Stage Rate Surcharge Calculation Line Irrigation
Stage 1
(0-10%
Shortage)
Stage 2
(11-20%
Shortage)
Stage 3
(21-30%
Shortage)
Stage 4
(31-40%
Shortage)
Stage 5
(41-50%
Shortage)
Stage 6
(>50%
Shortage)
1 Projected Water Use (HCF) 0% reduction 15% reduction 25% reduction 35% reduction 45% reduction 65% reduction 2 Single-Family Residential Tier 1 1,635,165 1,389,890 1,226,373 1,062,857 899,341 572,308 3 Single-Family Residential Tier 2 676,046 574,639 507,035 439,430 371,825 236,616 4 Single-Family Residential Tier 3 227,313 193,216 170,485 147,753 125,022 79,559 5 Multi-Family Residential 323,213 274,731 242,410 210,088 177,767 113,125 6 Commercial/Irrigation/Groundwater 949,453 807,035 712,089 617,144 522,199 332,308 7 Construction 2,191 1,862 1,643 1,424 1,205 767
8 Total 3,813,380 3,241,373 2,860,035 2,478,697 2,097,359 1,334,683 9 10 Projected Commodity Rate Revenue
11 Single-Family Residential Tier 1 ($8.10/HCF) $13,244,833 $11,258,108 $9,933,625 $8,609,142 $7,284,658 $4,635,692 12 Single-Family Residential Tier 2 ($8.76/HCF) $5,922,165 $5,033,840 $4,441,624 $3,849,407 $3,257,191 $2,072,758 13 Single-Family Residential Tier 3 ($9.14/HCF) $2,077,639 $1,765,993 $1,558,229 $1,350,465 $1,142,701 $727,173 14 Multi-Family Residential ($8.50/HCF) $2,747,310 $2,335,213 $2,060,482 $1,785,751 $1,511,020 $961,558 15 Commercial/Irrigation/Groundwater ($8.50/HCF) $8,070,347 $6,859,795 $6,052,760 $5,245,726 $4,438,691 $2,824,622 16 Construction ($9.14/HCF) $20,026 $17,022 $15,019 $13,017 $11,014 $7,009 17 Total $32,082,319 $27,269,972 $24,061,740 $20,853,508 $17,645,276 $11,228,812 18 19 Variable Water Purchase Costs
20 Water Purchases from CMWD (AF) 8,934 7,594 6,701 5,807 4,914 3,127 21 Full Service Treated Tier 1 Rates ($2,296/AF) $20,512,943 $17,436,001 $15,384,707 $13,333,413 $11,282,118 $7,179,530 22 23 Change in Net Revenue
24 Commodity Rate Revenue Loss $0 ($4,812,348) ($8,020,580) ($11,228,812) ($14,437,044) ($20,853,508) 25 Water Purchase Cost Savings $0 $3,076,941 $5,128,236 $7,179,530 $9,230,824 $13,333,413 26 Additional O&M Expenses due to Water Shortage $0 $0 ($150,000) ($300,000) ($400,000) ($500,000) 27 Total $0 ($1,735,407) ($3,042,344) ($4,349,282) ($5,606,220) ($8,020,095) 28 29 Proposed Surcharge (per HCF) $0.00 $0.54 $1.07 $1.76 $2.68 $6.01 City of Thousand Oaks 2025 Water Rate Study

52 5.5 PROPOSED WATER SHORTAGE STAGE RATES
Proposed water shortage stage rates were developed by uniformly applying the proposed water shortage stage rate surcharges to all proposed commodity rates. Proposed surcharges previously calculated in Table 5-1 and Table 5-2 are summarized in Table 5-3 below. Proposed water shortage stage rates were developed by adding the proposed surcharges below to each proposed commodity rate (from Table 4-5). Proposed water shortage stage rates are shown in Table 5-4 on the following page.

Table 5-3: Proposed Water Shortage Stage Rate Surcharges Water Shortage Stage
Proposed
Surcharge per HCF
(January 2026)
Proposed
Surcharge per HCF
(January 2027)
Stage 1 (0-10% Shortage) N/A N/A
Stage 2 (11-20% Shortage) $0.47 $0.54
Stage 3 (21-30% Shortage) $0.94 $1.07
Stage 4 (31-40% Shortage) $1.55 $1.76
Stage 5 (41-50% Shortage) $2.35 $2.68
Stage 6 (>50% Shortage) $5.28 $6.01

Note that if implemented, water shortage stage rates would replace baseline commodity rates.28 If adopted, the proposed water shortage stage rates may only be implemented if the corresponding water shortage stage (or a higher stage) has been formally declared in accordance with the City’s Water Shortage Contingency Plan. However, the City is not required to implement the corresponding stage rates when a water shortage stage is declared. For example, the City may continue to charge baseline commodity rates even if a Stage 2 water shortage is formally declared. It is anticipated that Stage 1 will be in effect when new rates are implemented in January 2026.

28 Baseline commodity rates refer to the proposed commodity rates from Table 4-5 and reflect Stage 1 supply conditions.

City of Thousand Oaks 2025 Water Rate Study

53 Table 5-4: Proposed Water Shortage Stage Rates (per HCF) Water Shortage Stage Rates
Baseline
Commodity
Rate – Stage 1
Stage 2
(11-20%
Shortage)
Stage 3
(21-30%
Shortage)
Stage 4
(31-40%
Shortage)
Stage 5
(41-50%
Shortage)
Stage 6
(>50%
Shortage)
Commodity Rate by Stage (January 2026) [$0.47 Inc.] [$0.94 Inc.] [$1.55 Inc.] [$2.35 Inc.] [$5.28 Inc.] Single-Family Residential Tiered Commodity Rates
Tier 1: 0-12 HCF per Month $7.16 $7.63 $8.10 $8.71 $9.51 $12.44 Tier 2: 13-30 HCF per Month $7.79 $8.26 $8.73 $9.34 $10.14 $13.07 Tier 3: >30 HCF per Month $8.15 $8.62 $9.09 $9.70 $10.50 $13.43

Uniform Commodity Rates
Multi-Family Residential, Non-Residential, & Groundwater $7.54 $8.01 $8.48 $9.09 $9.89 $12.82 Construction $8.15 $8.62 $9.09 $9.70 $10.50 $13.43

Commodity Rate by Stage (January 2027) [$0.54 Inc.] [$1.07 Inc.] [$1.76 Inc.] [$2.68 Inc.] [$6.01 Inc.] Single-Family Residential Tiered Commodity Rates
Tier 1: 0-12 HCF per Month $8.10 $8.64 $9.17 $9.86 $10.78 $14.11 Tier 2: 13-30 HCF per Month $8.76 $9.30 $9.83 $10.52 $11.44 $14.77 Tier 3: >30 HCF per Month $9.14 $9.68 $10.21 $10.90 $11.82 $15.15

Uniform Commodity Rates
Multi-Family Residential, Non-Residential, & Groundwater $8.50 $9.04 $9.57 $10.26 $11.18 $14.51 Construction $9.14 $9.68 $10.21 $10.90 $11.82 $15.15

City of Thousand Oaks 2025 Water Rate Study

54 6. WATER CONNECTION FEE UPDATE

6.1 WATER CONNECTION FEE UPDATE OVERVIEW

CONNECTION FEE OVERVIEW
New connections to the City’s potable water system are subject to water connection fees (sometimes referred to as “plant investment fees”). Connection fees are one-time fees that are necessary to ensure that existing users are not unfairly burdened by costs incurred to provide system capacity to new users. Connection fees are often referred to by other retail water agencies as “capacity fees” or other similar terms. The City’s currently adopted water connection fee is $10,280 for a 3/4-inch or smaller meter. Larger meters are subject to higher fees in proportion to meter capacity.

LEGAL REQUIREMENTS
Legal considerations relating to water and wastewater connection charges in California focus heavily on California Government Code Section 66013(a), which states that public water and wastewater agencies in California must demonstrate that the capacity charges paid by new users connecting to the system do not exceed the estimated reasonable cost of providing the services for which the charge is imposed and that the charge has a proportional benefit to the user. The primary means by which retail water and wastewater agencies in California address this requirement is by periodically conducting a connection fee update study.

6.2 WATER CONNECTION FEE METHODOLOGY

TYPICAL CONNECTION FEE METHODOLOGIES
The overall purpose of a connection fee is to equitably recover capital costs incurred by the agency to provide system capacity to new users. Water and wastewater connection fees in California are typically developed based on one of three common methodologies outlined by the AWWA in its Manual of Water Supply Practices M1: Principles of Water Rates, Fees and Charges, Seventh Edition:

1. Buy-in Method: The Buy-in Method establishes connection fees based on the value of the system’s existing capital assets and is typically most appropriate when a system’s current capacity is sufficient to serve both short-term and long-term projected demands. The rationale underlying the Buy-in Method is that new customers should pay to “buy-in” to existing system capacity funded by past and current users.

City of Thousand Oaks 2025 Water Rate Study

55 2. Incremental Cost Method: The Incremental Cost Method establishes connection fees based on the cost of planned capital expenditures required to expand system capacity and is typically most appropriate when a system’s current capacity is already fully utilized by existing users. The rationale underlying the Incremental Cost Method is that new users should fund planned capital projects that are necessary to accommodate growth in the service area.

3. Hybrid Method: The Hybrid Method29 establishes connection fees based on a combination of the Buy-in Method and the Incremental Cost Method. The Hybrid Method is typically most appropriate when some existing capacity is available to new users, but capacity expansion is still necessary to accommodate long-term demands.

PROPOSED METHODOLOGY
The City’s current water connection fees were developed using the Buy-in Method. WRE recommends retaining this methodology, as existing water system capacity is expected to be sufficient to accommodate future growth. The key steps in developing updated water connection fees based on the Buy-in Method were:
 Determine the Buy-in Cost Basis: The buy-in cost basis represents the value of the existing system that the new user is “buying into.” It is based primarily on the value of water system capital assets but also may include other adjustments, such as for outstanding debt principal.  Determine the Buy-in Units of Service: The units of service for the buy-in fee calculation are based on the number of equivalent meters currently connected to the water system. This value is determined by utilizing meter capacity ratios to convert larger meter sizes into 3/4- inch meter equivalencies.
 Calculate the Buy-in Fee: The total buy-in cost basis is divided by the total units of service to calculate the buy-in fee on a per equivalent meter unit basis.

6.3 PROPOSED WATER CONNECTION FEES

BUY-IN COST BASIS
Capital Asset Value
City staff provided a detailed registry of all water system capital assets to WRE for evaluation. The asset registry included information regarding the original cost, accumulated depreciation, and acquisition year for each individual capital asset listing. To adjust for inflation, WRE converted all asset values from original cost into replacement cost using the Engineering News-Record Construction Cost Index (20-City Average).30 This asset valuation methodology is consistent with the prior water connection fee update study in 2020. A summary of water system asset value is provided

29 The Hybrid Method is referred to by the AWWA as the “Combined Cost Approach.” 30 The Construction Cost Index was used to adjust nominal acquisition costs (i.e., unadjusted for inflation) to 2025 dollars.

The 20-City Average was used instead of the Los Angeles index because it includes more years of historical data.

City of Thousand Oaks 2025 Water Rate Study

56 in Table 6-1. The Water Enterprise currently has no outstanding debt; therefore no adjustments were needed to account for outstanding debt.

Table 6-1: Value of Water System Assets
Water System Assets Original Cost Replacement Cost
Buildings $2,513,934 $24,556,227
Equipment $3,079,516 $3,879,852
Improvements other than Buildings $86,290,498 $201,900,535 Intangibles $535,891 $869,261
Land $2,060,142 $26,343,575
Works-in-Progress $2,798,067 $3,133,792
Total $97,278,048 $260,683,243

BUY-IN UNITS OF SERVICE
Units of service for the buy-in fee calculation are equal to the number of current equivalent meter units connected to the City’s water system. One equivalent meter represents the capacity of a 3/4- inch meter. Larger meters require greater system capacity and are therefore subject to higher connection fees in proportion to meter capacity. The current number of equivalent meter units were calculated by multiplying the number of meters at each meter size in FY 2025/26 (from Table 3-5) by the associated meter capacity ratio (see Table 6-2). Meter capacity ratios represent the safe operating capacity in gallons per minute of each meter size relative to a 3/4-inch meter. The meter capacity ratios utilized are consistent with the values used to differentiate current fixed meter charges by meter size during the prior water cost-of-service analysis and are based on information from the AWWA.

Table 6-2: Equivalent Meter Units
Water Meter Size
Current
Number of
Meters
Safe Operating
Capacity
(gallons per
minute)
Meter Capacity
Ratio
Current
Equivalent
Meter Units
3/4-inch meter and smaller 15,451 30 1.00 15,451
1-inch meter 1,072 50 1.67 1,787

1.5-inch meter 353 100 3.33 1,177
2-inch meter 315 160 5.33 1,680
3-inch meter 60 350 11.67 703
4-inch meter 24 630 21.00 507
6-inch meter 7 1,300 43.33 306
Total 17,283 21,611

City of Thousand Oaks 2025 Water Rate Study

57 PROPOSED FEE CALCULATION
The proposed buy-in fee per equivalent meter unit (see Table 6-3) was calculated by dividing the buy- in cost basis (equal to the replacement cost of water system assets from Table 6-1) by the current number of equivalent meter units (from Table 6-2).

Table 6-3: Proposed Water Connection Fee Calculation per Equivalent Meter Unit Description
Buy-in Cost Basis
Value of Water System Assets $260,683,243
Less Outstanding Debt Principal $0
Total $260,683,243

Units of Service
Equivalent Meter Units 21,611

Proposed Connection Fee
Proposed Fee per Equivalent Meter Unit $12,063

Proposed water connection fees by meter size (see Table 6-4) were calculated by multiplying the proposed fee per equivalent meter unit (from Table 6-3) by the associated meter capacity ratio (from Table 6-2).

Table 6-4: Proposed Water Connection Fee Calculation by Meter Size Meter Size
Meter
Capacity
Ratio
Proposed
Fee
3/4-inch meter and smaller 1.00 $12,063
1-inch meter 1.67 $20,105

1.5-inch meter 3.33 $40,210
2-inch meter 5.33 $64,335
3-inch meter 11.67 $140,732
4-inch meter 21.00 $253,318
6-inch meter 43.33 $522,719

COMPARISON OF CURRENT AND PROPOSED FEES
Current and proposed water connection fees are shown below in Table 6-5. Proposed fees are approximately 17% higher than current fees. The increase is due to high inflation driving up replacement costs in recent years, as well as from the recent completion of significant capital projects City of Thousand Oaks 2025 Water Rate Study

58 adding to total water system capital assets. WRE recommends that the City continue to adjust its water connection fees every two years in proportion to changes in the Engineering-News Record’s Construction Cost Index for Los Angeles.

Table 6-5: Proposed Water Connection Fees
Water Connection Fees Current
Proposed
January 2026 Difference
3/4-inch meter and smaller $10,280 $12,063 $1,783
1-inch meter $17,168 $20,105 $2,937

1.5-inch meter $34,232 $40,210 $5,978
2-inch meter $54,844 $64,335 $9,491
3-inch meter $119,968 $140,732 $20,764
4-inch meter $215,880 $253,318 $37,438
6-inch meter $445,432 $522,719 $77,287

ADDITIONAL CONSIDERATIONS
The City currently charges most new connections based on meter size. However, the City currently assesses connection fees on a per dwelling unit basis for some customer types such as multi-family residential (each dwelling unit equals 75% of an equivalent meter unit) and hotels/motels/congregate care facilities31 (each dwelling unit equals 50% of an equivalent meter unit). Additionally, commercial connections with ten or fewer fixture units and monthly water use of 8 HCF or less are subject to reduced charges (equal to 50% of an equivalent meter). No changes to these existing practices were recommended as part of this water connection fee update.

31 This only applies to establishments with kitchens in each unit.

City of Thousand Oaks 2025 Water Rate Study

59 7. APPENDICES

7.1 APPENDIX A: DETAILED O&M EXPENSE PROJECTIONS

Table 7-1: Detailed O&M Expense Projections
Line Water Enterprise O&M Expenses
Inflationary
Category
Fixed/
Variable
FY 2025/26
Budget/
Projected
FY 2026/27
Budget/
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
1 ADMINISTRATION
2 Salaries & Benefits
3 Salaries Salaries/Benefits Fixed $262,152 $270,232 $281,041 $292,283 $303,974 4 Benefits Salaries/Benefits Fixed $130,864 $135,894 $141,330 $146,983 $152,862 5 Subtotal - Salaries & Benefits $393,016 $406,126 $422,371 $439,266 $456,837 6 7 Maintenance & Operations
8 Cost Allocation General Fixed $1,969,214 $2,067,675 $2,119,367 $2,172,351 $2,226,660 9 Professional/Contractual Services General Fixed $297,548 $256,315 $262,723 $269,291 $276,023 10 Supplies & Equipment General Fixed $6,755 $8,255 $8,461 $8,673 $8,890 11 Insurance and Claims General Fixed $300,283 $375,354 $384,738 $394,356 $404,215 12 Utilities General Fixed $460 $460 $472 $483 $495 13 Intangibles General Fixed $13,310 $8,800 $9,020 $9,246 $9,477 14 Training & Memberships General Fixed $6,600 $6,600 $6,765 $6,934 $7,107 15 Equipment/Building Rental General Fixed $1,334 $1,334 $1,367 $1,402 $1,437 16 Subtotal - Maintenance & Operations $2,595,504 $2,724,793 $2,792,913 $2,862,736 $2,934,304 17 18 SUBTOTAL - ADMINISTRATION $2,988,520 $3,130,919 $3,215,284 $3,302,002 $3,391,141 19 20 CAPITAL/ DEVELOPMENT ENGINEERING SERVICES
21 Salaries & Benefits
22 Salaries Salaries/Benefits Fixed $1,384,564 $1,431,756 $1,489,026 $1,548,587 $1,610,531 23 Benefits Salaries/Benefits Fixed $750,574 $774,214 $805,183 $837,390 $870,885 24 Subtotal - Salaries & Benefits $2,135,138 $2,205,970 $2,294,209 $2,385,977 $2,481,416 City of Thousand Oaks 2025 Water Rate Study

60 Line Water Enterprise O&M Expenses
Inflationary
Category
Fixed/
Variable
FY 2025/26
Budget/
Projected
FY 2026/27
Budget/
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
25 26 Maintenance & Operations
27 Professional/Contractual Services General Fixed $52,760 $52,760 $54,079 $55,431 $56,817 28 Supplies & Equipment General Fixed $2,700 $2,700 $2,768 $2,837 $2,908 29 Utilities General Fixed $1,300 $1,300 $1,333 $1,366 $1,400 30 Intangibles General Fixed $2,200 $2,200 $2,255 $2,311 $2,369 31 Asset Replacement Funding Construction Fixed $12,250 $12,250 $12,618 $12,996 $13,386 32 Training & Memberships General Fixed $7,250 $7,250 $7,431 $7,617 $7,807 33 Subtotal - Maintenance & Operations $78,460 $78,460 $80,483 $82,558 $84,687 34 35 SUBTOTAL - CAPITAL/ DEVELOPMENT ENGINEERING SERVICES $2,213,598 $2,284,430 $2,374,692 $2,468,535 $2,566,103 36 37 CONSERVATION
38 Salaries & Benefits
39 Salaries Salaries/Benefits Fixed $207,039 $212,333 $220,826 $229,659 $238,846 40 Benefits Salaries/Benefits Fixed $90,102 $93,436 $97,173 $101,060 $105,103 41 Subtotal - Salaries & Benefits $297,141 $305,769 $318,000 $330,720 $343,949 42 43 Maintenance & Operations
44 Professional/Contractual Services General Fixed $196,500 $296,500 $303,913 $311,510 $319,298 45 Supplies & Equipment General Fixed $38,250 $38,250 $39,206 $40,186 $41,191 46 Intangibles General Fixed $3,000 $3,000 $3,075 $3,152 $3,231 47 Training & Memberships General Fixed $35,200 $35,200 $36,080 $36,982 $37,907 48 Subtotal - Maintenance & Operations $272,950 $372,950 $382,274 $391,831 $401,626 49 50 SUBTOTAL - CONSERVATION $570,091 $678,719 $700,274 $722,550 $745,575 51 52 GROUNDWATER
53 Salaries & Benefits
54 Salaries Salaries/Benefits Fixed $33,466 $35,378 $36,793 $38,265 $39,795 55 Benefits Salaries/Benefits Fixed $18,505 $19,473 $20,252 $21,062 $21,904 City of Thousand Oaks 2025 Water Rate Study

61 Line Water Enterprise O&M Expenses
Inflationary
Category
Fixed/
Variable
FY 2025/26
Budget/
Projected
FY 2026/27
Budget/
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
56 Subtotal - Salaries & Benefits $51,971 $54,851 $57,045 $59,327 $61,700 57 58 Maintenance & Operations
59 Professional/Contractual Services General Fixed $5,000 $5,000 $5,125 $5,253 $5,384 60 Supplies & Equipment General Fixed $1,000 $4,500 $4,613 $4,728 $4,846 61 Utilities Electricity Variable $7,000 $7,500 $7,751 $8,011 $8,280 62 Placeholder General Fixed $0 $0 $0 $0 $0
63 Placeholder General Fixed $0 $0 $0 $0 $0
64 Subtotal - Maintenance & Operations $13,000 $17,000 $17,489 $17,992 $18,510 65 66 Capital Outlay
67 Capital Outlay Construction Fixed $0 $25,000 $25,750 $26,523 $27,318 68 Subtotal - Capital Outlay $0 $25,000 $25,750 $26,523 $27,318 69 70 SUBTOTAL - GROUNDWATER $64,971 $96,851 $100,284 $103,842 $107,529 71 72 MUNICIPAL SERVICE CENTER
73 Salaries & Benefits
74 Salaries Salaries/Benefits Fixed $301,767 $313,375 $325,910 $338,946 $352,504 75 Benefits Salaries/Benefits Fixed $166,381 $174,408 $181,384 $188,640 $196,185 76 Subtotal - Salaries & Benefits $468,148 $487,783 $507,294 $527,586 $548,690 77 78 Maintenance & Operations
79 Professional/Contractual Services General Fixed $44,590 $45,900 $47,048 $48,224 $49,429 80 Supplies & Equipment General Fixed $19,125 $17,305 $17,738 $18,181 $18,636 81 Utilities General Fixed $14,460 $14,460 $14,822 $15,192 $15,572 82 Repairs & Maintenance General Fixed $225,831 $231,463 $237,250 $243,181 $249,260 83 Intangibles General Fixed $180 $180 $185 $189 $194 84 Asset Replacement Funding Construction Fixed $1,500 $1,500 $1,545 $1,591 $1,639 85 Training & Memberships General Fixed $2,790 $2,790 $2,860 $2,931 $3,005 86 Equipment/Building Rental General Fixed $4,124 $4,124 $4,227 $4,333 $4,441 City of Thousand Oaks 2025 Water Rate Study

62 Line Water Enterprise O&M Expenses
Inflationary
Category
Fixed/
Variable
FY 2025/26
Budget/
Projected
FY 2026/27
Budget/
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
87 Subtotal - Maintenance & Operations $312,600 $317,722 $325,673 $333,822 $342,176 88 89 SUBTOTAL - MUNICIPAL SERVICE CENTER $780,748 $805,505 $832,967 $861,408 $890,865 90 91 PUMPING
92 Salaries & Benefits
93 Salaries Salaries/Benefits Fixed $230,121 $239,956 $249,554 $259,536 $269,918 94 Benefits Salaries/Benefits Fixed $113,729 $119,132 $123,897 $128,853 $134,007 95 Subtotal - Salaries & Benefits $343,850 $359,088 $373,452 $388,390 $403,925 96 97 Maintenance & Operations
98 Professional/Contractual Services General Fixed $163,300 $166,500 $170,663 $174,929 $179,302 99 Supplies & Equipment General Fixed $70,800 $70,800 $72,570 $74,384 $76,244 100 Utilities (Electricity) Electricity Variable $600,000 $620,000 $640,784 $662,269 $684,477 101 Utilities (Other) General Fixed $4,000 $4,000 $4,100 $4,203 $4,308 102 Repairs & Maintenance General Fixed $0 $0 $0 $0 $0 103 Asset Replacement Funding Construction Fixed $2,300 $15,700 $16,171 $16,656 $17,156 104 Equipment/Building Rental General Fixed $20,000 $20,000 $20,500 $21,013 $21,538 105 Subtotal - Maintenance & Operations $860,400 $897,000 $924,788 $953,453 $983,025 106
107 Capital Outlay
108 Capital Outlay Construction Fixed $75,000 $75,000 $77,250 $79,568 $81,955 109 Subtotal - Capital Outlay $75,000 $75,000 $77,250 $79,568 $81,955 110
111 SUBTOTAL - PUMPING $1,279,250 $1,331,088 $1,375,489 $1,421,410 $1,468,904 112
113 QUALITY ASSURANCE
114 Salaries & Benefits
115 Salaries Salaries/Benefits Fixed $260,657 $269,504 $280,284 $291,496 $303,155 116 Benefits Salaries/Benefits Fixed $139,078 $145,611 $151,435 $157,493 $163,793 117 Subtotal - Salaries & Benefits $399,735 $415,115 $431,720 $448,988 $466,948 City of Thousand Oaks 2025 Water Rate Study

63 Line Water Enterprise O&M Expenses
Inflationary
Category
Fixed/
Variable
FY 2025/26
Budget/
Projected
FY 2026/27
Budget/
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
118
119 Maintenance & Operations
120 Professional/Contractual Services General Fixed $314,300 $330,300 $338,558 $347,021 $355,697 121 Supplies & Equipment General Fixed $28,250 $28,250 $28,956 $29,680 $30,422 122 Utilities General Fixed $1,800 $1,800 $1,845 $1,891 $1,938 123 Intangibles General Fixed $21,239 $21,905 $22,453 $23,014 $23,589 124 Training & Memberships General Fixed $4,400 $4,400 $4,510 $4,623 $4,738 125 Subtotal - Maintenance & Operations $369,989 $386,655 $396,321 $406,229 $416,385 126
127 SUBTOTAL - QUALITY ASSURANCE $769,724 $801,770 $828,041 $855,218 $883,333 128
129 RESERVOIRS
130 Salaries & Benefits
131 Salaries Salaries/Benefits Fixed $178,064 $185,472 $192,891 $200,607 $208,631 132 Benefits Salaries/Benefits Fixed $92,499 $96,720 $100,589 $104,612 $108,797 133 Subtotal - Salaries & Benefits $270,563 $282,192 $293,480 $305,219 $317,428 134
135 Maintenance & Operations
136 Professional/Contractual Services General Fixed $124,600 $127,500 $130,688 $133,955 $137,304 137 Supplies & Equipment General Fixed $87,200 $94,200 $96,555 $98,969 $101,443 138 Utilities Electricity Fixed $7,200 $7,400 $7,622 $7,851 $8,086 139 Equipment/Building Rental General Fixed $14,500 $14,500 $14,863 $15,234 $15,615 140 Subtotal - Maintenance & Operations $233,500 $243,600 $249,727 $256,008 $262,448 141
142 SUBTOTAL - RESERVOIRS $504,063 $525,792 $543,207 $561,227 $579,875 143
144 STORAGE & DISTRIBUTION
145 Salaries & Benefits
146 Salaries Salaries/Benefits Fixed $1,554,425 $1,636,094 $1,701,538 $1,769,599 $1,840,383 147 Benefits Salaries/Benefits Fixed $884,015 $938,909 $976,465 $1,015,524 $1,056,145 148 Subtotal - Salaries & Benefits $2,438,440 $2,575,003 $2,678,003 $2,785,123 $2,896,528 City of Thousand Oaks 2025 Water Rate Study

64 Line Water Enterprise O&M Expenses
Inflationary
Category
Fixed/
Variable
FY 2025/26
Budget/
Projected
FY 2026/27
Budget/
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
149
150 Maintenance & Operations
151 Professional/Contractual Services General Fixed $474,500 $149,500 $153,238 $157,068 $160,995 152 Supplies & Equipment General Fixed $684,300 $684,300 $701,408 $718,943 $736,916 153 Utilities (Wholesale Water Purchases) N/A N/A $19,455,079 $21,451,954 $23,592,979 $25,355,922 $26,819,801 154 Utilities (Other) General Fixed $229,000 $319,000 $326,975 $335,149 $343,528 155 Repairs & Maintenance General Fixed $49,400 $49,400 $50,635 $51,901 $53,198 156 Intangibles General Fixed $53,000 $53,000 $54,325 $55,683 $57,075 157 Asset Replacement Funding Construction Fixed $258,000 $333,900 $343,917 $354,235 $364,862 158 Training & Memberships General Fixed $29,200 $29,200 $29,930 $30,678 $31,445 159 Equipment/Building Rental General Fixed $5,000 $5,000 $5,125 $5,253 $5,384 160 Subtotal - Maintenance & Operations $21,237,479 $23,075,254 $25,258,531 $27,064,832 $28,573,206 161
162 Capital Outlay
163 Capital Outlay Construction Fixed $425,000 $395,000 $406,850 $419,056 $431,627 164 Use of Asset Replacement Construction Fixed ($114,019) ($184,984) ($190,534) ($196,250) ($202,137) 165 Subtotal - Capital Outlay $310,981 $210,016 $216,316 $222,806 $229,490 166
167 SUBTOTAL - STORAGE & DISTRIBUTION $23,986,900 $25,860,273 $28,152,851 $30,072,762 $31,699,224 168
169 WATER CAPITAL PROGRAM
170 Maintenance & Operations
171 Asset Replacement Funding Construction Fixed $87,300 $93,200 $95,996 $98,876 $101,842 172 Subtotal - Maintenance & Operations $87,300 $93,200 $95,996 $98,876 $101,842 173
174 Capital Outlay
175 Capital Outlay Construction Fixed $33,000 $34,500 $35,535 $36,601 $37,699 176 Subtotal - Capital Outlay $33,000 $34,500 $35,535 $36,601 $37,699 177
178 SUBTOTAL - WATER CAPITAL PROGRAM $120,300 $127,700 $131,531 $135,477 $139,541 179
City of Thousand Oaks 2025 Water Rate Study

65 Line Water Enterprise O&M Expenses
Inflationary
Category
Fixed/
Variable
FY 2025/26
Budget/
Projected
FY 2026/27
Budget/
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
180 Total - O&M Expenses $33,278,165 $35,643,047 $38,254,618 $40,504,430 $42,472,090 181 % Change 7.1% 7.3% 5.9% 4.9%

Appendix A Notes:

1. Variable expenses are increased by an additional 0.34% (after adjusting for inflation) per year beginning in FY 2027/28 in proportion to the annual change in water demand.

City of Thousand Oaks 2025 Water Rate Study

66 7.2 APPENDIX B: DETAILED FIVE-YEAR CIP EXPENSES

Table 7-2: Detailed Five-Year CIP Expenses
Line CIP Project Description Fund Priority FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 1 MSC Fleet Emergency Generator & Battery
Energy Storage (CI5760) 611 One $0 $125,000 $0 $0 $0 2 MSC Warehouse New Lobby and Office
Reconfiguration (CI5781) 611 One $95,000 $0 $0 $0 $0 3 Municipal Service Center Roofing and Soffit
Repairs (MI2672) 611 Two $0 $37,750 $0 $0 $0
4 MSC Hard Lid Installation at Office and
Storage Spaces (MI2673) 611 Two $0 $0 $87,500 $0 $0 5 MSC Building C Office Reconfiguration
(MI2676) 611 Three $0 $0 $56,800 $0 $0
6 Municipal Service Center Microgrid and
Backup Power (CI5585) 612 Two $300,000 $0 $0 $0 $0
7 MSC Security Upgrades (CI5696) 612 One $86,982 $0 $0 $0 $0 8 Bus and Car Wash at Municipal Service
Center (CI5468) 612 Two $22,500 $0 $0 $0 $0
9 Conejo Valley Groundwater Development
Implementation (CI5453) 612 Two $0 $0 $0 $200,000 $2,000,000 10 Rolling Oaks Emergency Water
Interconnects (CI5514) 612 Two $36,000 $0 $0 $0 $0
11 Power Backup at Lang Ranch Pump Station
(CI5702) 612 One $200,000 $2,550,000 $0 $0 $0
12 Municipal Service Center Parking Lot
Repaving (CI5459) 613 Three $0 $0 $375,000 $0 $0
City of Thousand Oaks 2025 Water Rate Study

67 Line CIP Project Description Fund Priority FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 13 City/County Emergency Communications
Network (CI5549) 613 Two $0 $25,000 $0 $0 $0
14 Municipal Service Center Storm Water
Quality Improvements (CI5661) 613 One $390,000 $0 $0 $0 $0 15 MSC Fleet Electric Vehicle Charging (CI5710) 613 Three $447,600 $0 $0 $0 $0 16 Solar Canopy Expansion at the Municipal
Service Center (CI5718) 613 Three $0 $0 $0 $500,000 $0 17 Hill Canyon Treatment Plant and Water
Facilities Pavement Preservation (MI2626) 613 Three $250,000 $0 $0 $0 $0 18 Thousand Oaks Boulevard (Phase II)
Streetscape Improvements (CI5627) 613 One $0 $0 $0 $100,000 $715,000 19 Bus and Car Wash at Municipal Service
Center (CI5468) 613 Two $237,500 $0 $0 $0 $0
20 Freeway Reservoir Access Road
Improvements (CI5280) 613 Two $0 $350,000 $2,000,000 $0 $0 21 Wilbur Court Waterline Relocation (CI5286) 613 Two $0 $250,000 $0 $0 $0 22 Wilder Reservoir Improvements (CI5294) 613 Two $2,970,000 $0 $0 $0 $0 23 Sunset Reservoir Number 3 Improvements
(CI5295) 613 Two $0 $200,000 $1,300,000 $0 $0
24 Waterline Looping Installation (CI5305) 613 Two $0 $250,000 $400,000 $2,000,000 $2,000,000 25 Groundwater Utilization Project (CI5395) 613 One $500,000 $0 $0 $0 $0 26 Grissom Reservoir Number 1 and 2
Improvements (CI5402) 613 Two $1,650,000 $0 $0 $0 $0 27 Freeway Reservoir Improvements (CI5448) 613 Two $500,000 $2,500,000 $0 $0 $0 28 Water Security Cameras at City Reservoirs
(CI5456) 613 Two $200,000 $0 $0 $0 $0
City of Thousand Oaks 2025 Water Rate Study

68 Line CIP Project Description Fund Priority FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 29 Pipeline Upgrades Near CMWD Turnouts
Phase I (CI5493) 613 Two $2,750,000 $0 $0 $0 $0
30 Pipeline Upgrade Near Pederson Pump
Station Phase II (CI5494) 613 Two $0 $60,000 $600,000 $0 $0 31 Rolling Oaks Emergency Water
Interconnects (CI5514) 613 Two $399,000 $0 $0 $0 $0 32 Site Improvements at Reservoirs and Pump
Stations (CI5520) 613 Two $50,000 $0 $0 $0 $0
33 Pederson Pump Station Improvements
(CI5534) 613 One $98,300 $0 $0 $0 $0
34 Water Mainline Replacement FY 2025-2027
(CI5642) 613 Two $2,100,000 $2,100,000 $0 $0 $0
35 Hydropneumatic Stations Backup Pump
Replacements (CI5672) 613 Two $1,998,440 $0 $0 $0 $0 36 Lone Oak Pump Station Emergency
Generator & Improvements (CI5673) 613 One $790,000 $0 $0 $0 $0 37 Pump Replacement/Upgrade FY 2025-2027
(CI5674) 613 Two $200,000 $200,000 $0 $0 $0
38 Water Distribution System Pressure
Monitoring Improvements (CI5675) 613 Two $0 $550,000 $0 $0 $0 39 Water Systems Miscellaneous
Improvements FY 2025-2027 (CI5676) 613 Two $400,000 $400,000 $0 $0 $0 40 Automated Meter Replacement Program FY
2025-2027 (CI5677) 613 Two $2,000,000 $2,000,000 $0 $0 $0 41 Hydrant Replacements FY 2025-2027
(CI5678) 613 Two $500,000 $0 $0 $0 $0
42 Honeysuckle Court Water Main
Replacement (CI5679) 613 One $500,000 $0 $0 $0 $0
City of Thousand Oaks 2025 Water Rate Study

69 Line CIP Project Description Fund Priority FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 43 Polybutylene Service Replacement FY 2025-
27 (CI5688) 613 Two $950,000 $0 $0 $0 $0
44 Valve Replacement FY 2025-27 (CI5689) 613 Two $800,000 $700,000 $0 $0 $0 45 Erbes Rd Pump Station Emergency
Generator & Improvements (CI5738) 613 One $139,000 $0 $0 $0 $0 46 Ventu Pump Station Electrical
Improvements (CI5739) 613 One $333,000 $0 $0 $0 $0
47 Arboles Pump Station Improvements
(CI5747) 613 One $18,230 $0 $0 $0 $0
48 Sunset No. 1 Pump Station Improvements
(CI5749) 613 One $20,047 $0 $0 $0 $0
49 Sunset No. 2 Pump Station Improvements
(CI5750) 613 One $39,240 $0 $0 $0 $0
50 Sunset No. 3 Pump Station Improvements
(CI5751) 613 One $55,650 $0 $0 $0 $0
51 Kelley Pump Station Improvements (CI5752) 613 One $600,000 $0 $0 $0 $0 52 Lang Ranch Pump Station Improvements
(CI5753) 613 One $980,000 $0 $0 $0 $0
53 Meadows Reservoir Improvements (CI5754) 613 Two $300,000 $0 $0 $0 $0 54 Oakbrook Reservoir Improvements (CI5755) 613 One $200,000 $0 $0 $0 $0 55 Willow Lane Pump Station Improvements
(CI5757) 613 One $80,600 $0 $0 $0 $0
56 Pederson Pump Station Emergency
Generator (CI5764) 613 One $110,000 $750,000 $0 $0 $0 57 Rolling Oaks Pump Station Emergency
Generator (CI5765) 613 One $110,000 $750,000 $0 $0 $0 58 Sunset No. 1 Pump Station Emergency
Generator (CI5766) 613 One $110,000 $750,000 $0 $0 $0 City of Thousand Oaks 2025 Water Rate Study

70 Line CIP Project Description Fund Priority FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 59 Permanent Disinfection Boosting System at
La Granada Reservoir (CI5771) 613 One $100,000 $820,000 $0 $0 $0 60 Permanent Disinfection Boosting System at
Sunset 2 Reservoir (CI5772) 613 One $0 $0 $100,000 $820,000 $0 61 Permanent Disinfection Boosting System at
Wilder Reservoir (CI5773) 613 One $0 $0 $0 $0 $100,000 62 Automated Meter Replacement Program FY
2027-30 (CI5774) 613 Two $0 $0 $500,000 $500,000 $500,000 63 Pump Replacement/Upgrade FY 2027-30
(CI5775) 613 Two $0 $0 $200,000 $200,000 $200,000
64 Hydrant Replacements FY 2027-30 (CI5778) 613 Two $0 $0 $500,000 $0 $500,000 65 Water Systems Miscellaneous
Improvements FY 2027-30 (CI5779) 613 Two $0 $0 $400,000 $400,000 $400,000 66 Water Pump Station Soft Start Upgrades
(CI5789) 613 Three $0 $0 $500,000 $1,000,000 $1,000,000 67 Permanent Disinfection Boosting System at
Lang Ranch Reservoir (CI5791) 613 One $100,000 $820,000 $0 $0 $0 68 Permanent Disinfection Boosting System at
Oakbrook Reservoir (CI5792) 613 One $0 $0 $100,000 $820,000 $0 69 Permanent Disinfection Boosting System at
Ventu Reservoir (CI5793) 613 One $0 $0 $0 $0 $100,000 70 Water Mainline Replacement Program FY
2027-30 (CI5795) 613 Two $0 $0 $1,500,000 $1,500,000 $1,500,000 71 Polybutylene Service Replacement FY 2027-
30 (CI5797) 613 Two $0 $0 $1,000,000 $0 $1,000,000
72 Valve Replacement FY 2027-30 (CI5798) 613 Two $0 $0 $800,000 $800,000 $800,000 City of Thousand Oaks 2025 Water Rate Study

71 Line CIP Project Description Fund Priority FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 73 Arboles Pump Station Emergency Generator
(CI5815) 613 One $0 $0 $150,000 $800,000 $0
74 Willow Lane Pump Station Emergency
Generator (CI5816) 613 One $0 $0 $110,000 $750,000 $0 75 Sunset No. 2 Pump Station Emergency
Generator (CI5818) 613 One $110,000 $750,000 $0 $0 $0 76 Water System Hydraulic Model Update
Project (MI2651) 613 Two $245,888 $0 $0 $0 $0
77 Citywide Water Mainline Replacement
Study (MI2662) 613 Two $200,000 $0 $0 $0 $0
78 Water Master Plan Update (MI2679) 613 Two $450,000 $0 $0 $0 $0 79 Total $25,722,977 $16,937,750 $10,679,300 $10,390,000 $10,815,000

Appendix B Notes:

1. FY 2025/26 CIP totals include carryover.

Thousand Oaks City CouncilSeptember 9, 2025

Thousand Oaks City Council
September 9, 2025