Attachment 2 Wastewater Rate Study — Thousand Oaks City Council, September 9, 2025

City of
Thousand Oaks
2025 Wastewater Rate Study
Final Report – September 3, 2025
Prepared by: Water Resources Economics, LLC
ATTACHMENT #2

This page intentionally left blank

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 Wastewater Rate Study

Dear Ms. Tosatto,

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

This study utilized industry-standard rate-setting methodology in accordance with guidelines developed by the Water Environment Federation and the American Water Works Association. Our project team has a proven record of developing fair and equitable rates for numerous wastewater agencies in California over the past 25 years. We are confident in our ability to develop sound wastewater 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 Wastewater Rate Study

Water Resources Economics, LLC

TABLE OF CONTENTS

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

2. Introduction ........................................................................................................................... 12

2.1 Wastewater System Overview ................................................................................................... 12

2.2 Rate Study Overview .................................................................................................................. 12

2.3 Legal Requirements .................................................................................................................... 12

2.4 Rate-Setting Methodology ......................................................................................................... 13

2.5 Disclaimers .................................................................................................................................. 13

3. Financial Plan Update ............................................................................................................. 15

3.1 Financial Plan Methodology ....................................................................................................... 15

3.2 Revenues ..................................................................................................................................... 15

3.3 Operations & Maintenance Expenses ........................................................................................ 20

3.4 Debt Service ................................................................................................................................ 21

3.5 Capital Improvement Program Expenses ................................................................................... 22

3.6 Reserve Targets .......................................................................................................................... 23

3.7 Status Quo Financial Plan ........................................................................................................... 24

3.8 Proposed Financial Plan .............................................................................................................. 27

4. Cost-of-Service Analysis ......................................................................................................... 31

4.1 Cost-of-Service Methodology ..................................................................................................... 31

4.2 Revenue Requirement Determination ....................................................................................... 31

4.3 Allocations to Functional Categories .......................................................................................... 32

4.4 Allocations to Cost Causation Components ............................................................................... 35

4.5 Mass Balance Analysis ................................................................................................................ 39

4.6 Unit Cost Devleopment .............................................................................................................. 45

4.7 Cost-of-Service Allocations by Customer Class .......................................................................... 45

5. Proposed Rate Development .................................................................................................. 46

5.1 Proposed Rate Calculation Methodology ................................................................................... 46

5.2 Rate Structure Evaluation ........................................................................................................... 46

5.3 Test Year Rate Development (FY 2025/26) ................................................................................ 47

5.4 Proposed Rates ........................................................................................................................... 49

5.5 Bill Impacts .................................................................................................................................. 51

6. Wastewater Connection Fee Update ...................................................................................... 53

6.1 Wastewater Connection Fee Update Overview ......................................................................... 53

6.2 Wastewater Connection Fee Methodology ............................................................................... 53

6.3 Proposed Wastewater Connection Fees .................................................................................... 54

7. Appendices ............................................................................................................................ 57

7.1 Appendix A: Detailed O&M Expense Projections ....................................................................... 57

7.2 Appendix B: Detailed Five-Year CIP Expenses ............................................................................ 62

City of Thousand Oaks 2025 Wastewater Rate Study

Water Resources Economics, LLC

LIST OF TABLES
Table 1-1: Wastewater Enterprise Reserve Targets ................................................................................. 3 Table 1-2: Proposed Revenue Adjustments ............................................................................................. 3 Table 1-3: Updated Cost-of-Service Analysis ............................................................................................ 5 Table 1-4: Current Wastewater Charges .................................................................................................. 6 Table 1-5: Current Service Unit Determinations ...................................................................................... 7 Table 1-6: Proposed Two-Year Wastewater Rate Schedule ..................................................................... 8 Table 1-7: Current vs. Revised ERU & Service Unit Definitions ................................................................ 8 Table 1-8: Single-Family Residential Bill Impacts (FY 2026/27) ................................................................ 9 Table 1-9: Average Customer Bill Impacts (FY 2026/27) ........................................................................ 10 Table 1-10: Proposed Wastewater Connection Fees ............................................................................. 11 Table 3-1: Current Wastewater Charges ................................................................................................ 16 Table 3-2: Current Service Unit Determinations .................................................................................... 17 Table 3-3: Assumed Account Growth ..................................................................................................... 17 Table 3-4: Number of Service Units ........................................................................................................ 18 Table 3-5: Revenue from Current Rates ................................................................................................. 19 Table 3-6: Miscellaneous Non-Rate Revenue ......................................................................................... 19 Table 3-7: Current Revenue Summary ................................................................................................... 20 Table 3-8: O&M Expense Annual Inflationary Assumptions .................................................................. 20 Table 3-9: Summary of O&M Expenses .................................................................................................. 21 Table 3-10: CIP Funding Assumptions .................................................................................................... 22 Table 3-11: Target Reserve Policy ........................................................................................................... 23 Table 3-12: Projected Target Reserve Levels .......................................................................................... 24 Table 3-13: Status Quo Financial Plan .................................................................................................... 25 Table 3-14: Proposed Revenue Adjustments ......................................................................................... 27 Table 3-15: Proposed Financial Plan ....................................................................................................... 29 Table 4-1: FY 2025/26 Rate Revenue Requirement Determination ....................................................... 32 Table 4-2: Operating Revenue Requirement Allocation to Functional Categories ................................ 33 Table 4-3: Capital Asset Allocation to Functional Categories ................................................................. 34 Table 4-4: Allocation of Functional Categories to Cost Causation Components .................................... 35 Table 4-5: Operating Revenue Requirement Allocation to Cost Causation Components ..................... 36 Table 4-6: Capital Revenue Requirement Allocation to Cost Causation Components .......................... 37 Table 4-7: Preliminary Cost-of-Service Allocation .................................................................................. 38 Table 4-8: General Cost Reallocation ..................................................................................................... 38 Table 4-9: Final Cost-of-Service Allocation ............................................................................................. 39 Table 4-10: Total Wastewater Treatment Plant Influent ....................................................................... 40 Table 4-11: Wastewater Treatment Plant Influent Flows from Customers ........................................... 40 Table 4-12: Proposed Flow Adjustment Factors..................................................................................... 41 Table 4-13: Revised ERU Definition ........................................................................................................ 41 Table 4-14: Wastewater Treatment Plant Influent Flows by Customer Class ........................................ 42 Table 4-15: Wastewater Treatment Plant Flow and Strength Loadings by Customer Class .................. 44 Table 4-16: Unit Cost Development ....................................................................................................... 45 City of Thousand Oaks 2025 Wastewater Rate Study

Water Resources Economics, LLC

Table 4-17: Cost Allocations to Customer Classes .................................................................................. 45 Table 5-1: Proposed Flow/Strength Adjustment Factors ....................................................................... 47 Table 5-2: Number of Revised Service Units .......................................................................................... 48 Table 5-3: Test Year Rate Calculation ..................................................................................................... 49 Table 5-4: Proposed Wastewater Rate Schedule ................................................................................... 49 Table 5-5: Revised ERU and Service Unit Definitions ............................................................................. 50 Table 5-6: Current vs. Revised ERU & Service Unit Definitions .............................................................. 50 Table 5-7: Single-Family Residential Bill Impacts (FY 2026/27) .............................................................. 51 Table 5-8: Average Customer Bill Impacts (FY 2026/27) ........................................................................ 52 Table 6-1: Value of Wastewater System Assets ..................................................................................... 55 Table 6-2: Proposed Wastewater Connection Fee Calculation per Service Unit ................................... 55 Table 6-3: Proposed Wastewater Connection Fees ............................................................................... 56 Table 7-1: Detailed O&M Expense Projections ...................................................................................... 57 Table 7-2: Detailed Five-Year CIP Expenses ............................................................................................ 62

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 3-1: Status Quo Financial Plan – Projected Cash Reserves .......................................................... 26 Figure 3-2: Proposed Financial Plan – Projected Cash Reserves ............................................................ 30

LIST OF ABBREVIATIONS
AWWA: American Water Works Association
BOD: Biological Oxygen Demand
CIP: Capital improvement program
ERU: Equivalent Residential Unit
FY: Fiscal year (July 1st – June 30th)
GPD: Gallons per day
mg/L: milligrams per liter
MGD: Million gallons per day
O&M: Operations and maintenance
TSS: Total Suspended Solids
WEF: Water Environment Federation
WRE: Water Resources Economics, LLC
City of Thousand Oaks 2025 Wastewater Rate Study

1 1. EXECUTIVE SUMMARY

RATE STUDY OVERVIEW
The City of Thousand Oaks (City) provides wastewater collection, treatment, and disposal services to over 38,000 customer connections in Thousand Oaks. The City’s wastewater system functions as a self-sustaining enterprise (referred to as the Wastewater Enterprise) and is primarily funded by customer rates. Public wastewater agencies in California conduct rate studies periodically to ensure that customers are appropriately charged for wastewater service. The City last completed a wastewater rate study in 2023, which established a two-year wastewater rate schedule for Fiscal Year1 (FY) 2024/25 through FY 2025/26. The City engaged Water Resources Economics, LLC (WRE) to conduct this 2025 Wastewater Rate Study to establish a two-year proposed wastewater rate schedule for FY 2026/27 through FY 2027/28. As part of the 2025 Wastewater Rate Study, WRE also developed updated wastewater connection fees, which are one-time fees paid by new development to connect to the City’s wastewater system.

LEGAL REQUIREMENTS
Legal considerations relating to wastewater 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 wastewater 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 wastewater agencies in California must demonstrate a sufficient nexus between the costs incurred by the agency to provide wastewater service and the rates charged to customers.

RATE-SETTING METHODOLOGY
This rate study was conducted using industry-standard methodology outlined by the Water Environment Federation (WEF) in its Manual of Practice No. 27: Financing And Charges for Wastewater Systems, Fourth Edition and 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 wastewater system. The overall goal of a cost-of-service analysis is to

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

City of Thousand Oaks 2025 Wastewater Rate Study

2 establish a robust proportionality between the costs incurred by the utility and the rates charged to customers. Public wastewater 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 wastewater system every six years. The City’s prior cost-of- service analysis was completed in 2019. Therefore, an updated cost-of-service analysis was conducted as part of the 2025 Wastewater Rate Study.

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 Wastewater 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 account growth: Total connections served by the City’s wastewater system were projected to increase by approximately 0.4% per year over the next five years based on expected near-term development and projections from the City’s 2020 Urban Water Management Plan.
 Operations & maintenance (O&M) expense increases: Wastewater Enterprise O&M expenses were projected to increase by 3.9% per year due to inflationary assumptions based on historical cost increases, anticipated increases per direction from City staff, and inflationary trends across the water/wastewater utility industry and broader economy.  Capital improvement program (CIP) funding: The City’s currently adopted CIP budget includes $85.6 million of wastewater 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 $12.2 million per year, which more closely reflects expected annual average CIP project execution.

Proposed Changes to Reserve Targets
It is common practice for public wastewater utilities to establish reserve targets to ensure that cash reserves are maintained at appropriate levels. WRE evaluated the Wastewater Enterprise’s three current reserve targets (see Table 1-1). One change was recommended to the capital reserve target, City of Thousand Oaks 2025 Wastewater Rate Study

3 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 Wastewater Enterprise to draw upon its current reserves to help fund near-term CIP, and more closely align with industry norms.

Table 1-1: Wastewater 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 Revenue Adjustments
Proposed rate increases are referred to as “revenue adjustments.” In percentage terms, revenue adjustments represent overall annual increases in rate revenue resulting from rate increases. WRE worked with City staff to establish a proposed revenue adjustment scenario that would sufficiently meet the Wastewater Enterprise’s funding requirements while minimizing customer bill impacts. The proposed revenue adjustment scenario includes revenue adjustments of 7% each year from FY 2026/27 through FY 2029/30 (see Table 1-2). The need for 7% revenue adjustments is primarily driven by significant planned CIP, and also by ongoing cost inflation.

The currently adopted wastewater rate schedule included 11% annual revenue adjustments.

Proposed revenue adjustments are lower than previously projected in the prior rate study, in part due to the proposed reduction in the capital reserve target from two years to one year of annual average CIP. The proposed capital reserve policy will allow the Wastewater Enterprise to utilize reserves more extensively to cover near-term CIP funding needs. Note that revenue adjustments in the final two years of the five-year study period are for planning purposes only, as the City only adopts two years of wastewater rates at a time.

Table 1-2: Proposed Revenue Adjustments
Fiscal Year Effective Date
Proposed Revenue
Adjustment
FY 2025/26 CURRENT July 2025 N/A
FY 2026/27 PROPOSED July 2026 7%
FY 2027/28 PROPOSED July 2027 7%
FY 2028/29 PROJECTED July 2028 7%
FY 2029/30 PROJECTED July 2029 7%

City of Thousand Oaks 2025 Wastewater 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 current rates would be sufficient to meet the Wastewater 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 7% proposed annual revenue 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 Wastewater Rate Study

5 COST-OF-SERVICE ANALYSIS
A cost-of-service analysis was conducted to allocate the total rate revenue requirement to customers in proportion to their use of the system. A key step in the cost-of-service analysis was to allocate Wastewater Enterprise costs to various “cost causation components” to establish proportionality between the utilization of the system and the incursion of costs. Next, wastewater treatment plant loadings were estimated for each customer class based on historical data and various assumptions.2 The total rate revenue requirement was then allocated in proportion to estimated treatment plant loadings attributed to each customer class. A summary of the cost-of-service analysis is provided in Table 1-3 below.

Table 1-3: Updated Cost-of-Service Analysis
Customer Class
Number of
Accounts
Flow
(Million
Gallons)
BOD
(1,000
pounds)
TSS
(1,000
pounds)
Cost-of-
Service
Allocation
(FY 2025/26)
Single-Family Residential 36,525 1,997 5,324 5,615 $17,574,847 Multi-Family Residential 573 346 923 973 $3,043,742
General Commercial
(Offices/Retail/All Other) 1347 322 857 904 $2,827,266
Markets/Mortuaries 19 8 52 52 $116,786
Restaurants/Bakeries 49 4 35 21 $62,625
Restaurants with Grease Trap 215 43 115 122 $380,522
Schools 45 35 76 79 $277,335
Industrial/High Flow 6 322 223 183 $1,772,008
Car Washes 4 17 9 22 $101,423
Total 38,783 3,094 7,614 7,971 $26,156,554

PROPOSED WASTEWATER RATE DEVELOPMENT
Current Wastewater Rates
The City’s wastewater rates are adjusted at the beginning of each fiscal year in July. Year two of the adopted rate schedule has been in effect since July 2025 (see Table 1-4). Single-family residential wastewater charges are collected on the Ventura County property tax roll. All other customers are billed monthly by the City. The City’s current wastewater rate structure consists of the following charges:
 Fixed Charges: Each wastewater connection is subject to a fixed charge per Service Unit. One Service Unit represents the wastewater loadings from a typical single-family residence.

2 Wastewater loadings include wastewater flow and strength. Flow refers to the quantity of water discharged to the system. Strength refers to the concentration of contaminants in water discharged to the system and is typically measured by Biological Oxygen Demand (BOD) and Total Suspended Solids (TSS).

City of Thousand Oaks 2025 Wastewater Rate Study

6  Outside City Surcharge: Each wastewater connection located outside of City limits is subject to an additional surcharge per Service Unit. Outside City surcharges are intended to recover taxes the City pays to Ventura County to extend wastewater pipelines through County land.

Table 1-4: Current Wastewater Charges
Current Wastewater Charges (per Month) July 2025
Fixed Charge (per Service Unit) $39.17
Outside City Surcharge (per Service Unit) $0.55

Current Service Unit Determinations
Current wastewater charges are on a per Service Unit basis to ensure that customers are billed in proportion to estimated wastewater loadings. One Service Unit represents the wastewater loadings from a typical single-family residence. The number of Service Units assigned to each customer is currently determined based on the following formula:

𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 𝑆𝑆𝑁𝑁 𝑁𝑁𝑆𝑆𝑆𝑆 𝑆𝑆 𝑁𝑁 𝑈𝑈 𝑈𝑈 𝑆𝑆𝑈𝑈 𝑈𝑈 = 𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 𝐸𝐸𝐸𝐸 𝑈𝑈𝑈𝑈 × 𝐹𝐹 𝐹𝐹𝑜𝑜𝐹𝐹/ 𝑆𝑆𝑈𝑈 𝑁𝑁𝑁𝑁𝑈𝑈𝑆𝑆𝑈𝑈ℎ 𝐴𝐴 𝐴𝐴𝐴𝐴𝑁𝑁𝑈𝑈 𝑈𝑈𝑁𝑁𝑁𝑁𝑈𝑈𝑈𝑈 𝐹𝐹 𝐹𝐹 𝑆𝑆𝑈𝑈𝑜𝑜𝑁𝑁

Equivalent Residential Units (ERUs) are used to normalize to a single-family residence equivalency before accounting for differences in flow and strength generation. Flow/strength adjustment factors are then applied to normalize for flow and strength differences between customer classes. Current ERU definitions and flow/strength adjustment factors are shown in Table 1-5.

City of Thousand Oaks 2025 Wastewater Rate Study

7 Table 1-5: Current Service Unit Determinations
Customer Class ERU Definition
Flow/Strength
Adjustment Factor
Residential
Single-Family Residential 1 dwelling unit 1.00
Multi-Family Residential 1 dwelling unit 1.00

Non-Residential
General Commercial (Offices/Retail/All Other) 20 fixture units3 1.00 Markets/Mortuaries 20 fixture units 1.82
Restaurants/Bakeries 20 fixture units 1.81
Restaurants with Grease Trap 20 fixture units 1.19
Schools 20 fixture units 0.535
Industrial/High Flow 180 GPD4 0.67
Car Washes 180 GPD 0.71

Rate Structure Evaluation
WRE worked with City staff to evaluate the current rate structure and identify potential changes. The most significant challenge with the current wastewater rate structure is that it is administratively burdensome for City staff to maintain up-to-date fixture unit counts for non-residential customers.

City staff directed WRE to evaluate potential rate structure changes to address this challenge.

Most wastewater agencies in California have rate structures that include a variable rate per unit of metered water use. However, many of the City’s wastewater customers receive water service from private water utilities rather than the City’s water system. Because it is not practicable for the City to obtain customer water use information from said private water utilities, the City is not able to charge its wastewater customers based on metered water use. Therefore, the City is constrained to wastewater rate structure options based on fixed charges only.

WRE evaluated the potential for an alternative fixed rate structure based on building square footage for non-residential customers. Ultimately it was determined that this option was not feasible due to existing billing software limitations. Additionally, building square footage has a weaker proportionality to wastewater loadings than fixture unit counts. Therefore, WRE recommended that the City maintain its current wastewater rate structure and reevaluate administrative procedures to potentially streamline the fixture unit count determination process.

3 A fixture unit is a unit of measure of water discharged to a wastewater system by various plumbing fixtures (such as sinks, bathtubs, toilets, etc.).
4 For certain high flow customers such as large industrial facilities and car washes (currently only ten accounts), one ERU is equal to 180 gallons per day (GPD) based on average daily flow measurements/estimates for each customer.

City of Thousand Oaks 2025 Wastewater Rate Study

8 Proposed Wastewater Rates
A proposed two-year wastewater rate schedule for FY 2026/27 and FY 2027/28 was calculated directly based on the results of the financial plan update and cost-of-service analysis (see Table 1-6).

Proposed rates are consistent with the current rate structure. Note that the proposed FY 2026/27 charges per Service Unit increase by more than 7% due to the updated cost-of-service analysis.

However, total revenue from rates in FY 2026/27 is still projected to increase by 7% relative to current rates.

Table 1-6: Proposed Two-Year Wastewater Rate Schedule
Monthly Wastewater Charges Current
Proposed
FY 2026/27
(July 2026)
Proposed
FY 2027/28
(July 2027)
Fixed Charge (per Service Unit) $39.17 $42.88 $45.89
Outside City Surcharge (per Service Unit) $0.55 $0.72 $0.78

Revised Service Unit Definitions
ERU and Service Unit definitions were revised in accordance with the updated cost-of-service analysis (see Table 1-7). Proposed ERU definitions are consistent with current definitions, except for industrial/high flow and car washes (for which one ERU was redefined as 150 GPD). Proposed flow/strength assumptions reflect updated estimates of treatment plant loadings attributable to each customer class. No changes to the current Service Unit determination formula below were proposed:

Table 1-7: Current vs. Revised ERU & Service Unit Definitions Customer Class
Current ERU
Definition
Proposed ERU
Definition
Current
Flow/Strength
Adjustment
Factor
Proposed
Flow/Strength
Adjustment
Factor
Single-Family Residential 1 dwelling unit 1 dwelling unit 100% 100% Multi-Family Residential 1 dwelling unit 1 dwelling unit 100% 80% General Commercial
(Offices/Retail/All Other) 20 fixture units 20 fixture units 100% 100% Markets/Mortuaries 20 fixture units 20 fixture units 182% 170% Restaurants/Bakeries 20 fixture units 20 fixture units 181% 171% Restaurants with Grease Trap 20 fixture units 20 fixture units 119% 100% Schools 20 fixture units 20 fixture units 53.5% 64%
Industrial/High Flow 180 GPD 150 GPD 67% 62%
Car Washes 180 GPD 150 GPD 71% 67%

City of Thousand Oaks 2025 Wastewater Rate Study

9 Proposed Service Unit Formula for Unique Flow and Strength Characteristics WRE recommends that City staff retain the option to adjust flow and strength assumptions for any customer based on actual loading measurements and/or established engineering practices (as provided for in the City’s currently adopted wastewater rate ordinance). In this event, WRE recommends that the following formula be used to calculate the number of Service Units based on customer-specific flow and strength characteristics:

𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 𝑆𝑆𝑁𝑁 𝑁𝑁𝑆𝑆𝑆𝑆 𝑆𝑆 𝑁𝑁 𝑈𝑈 𝑈𝑈𝑆𝑆 𝑈𝑈𝑈𝑈 = 𝐹𝐹𝐹𝐹 𝑜𝑜 𝐹𝐹 𝑆𝑆𝑈𝑈 𝐺𝐺 𝐺𝐺𝐺𝐺 150 𝐺𝐺𝐺𝐺𝐺𝐺 × �53.32% + 23.34% × 𝐵𝐵𝐵𝐵𝐺𝐺 𝑆𝑆𝑈𝑈 𝑁𝑁𝑆𝑆/𝐿𝐿
3 19 𝑁𝑁𝑆𝑆/𝐿𝐿 + 23.34% × 𝑇𝑇 𝑆𝑆𝑆𝑆 𝑆𝑆𝑈𝑈 𝑁𝑁𝑆𝑆/𝐿𝐿
3 37 𝑁𝑁𝑆𝑆/𝐿𝐿 �

BILL IMPACTS
Single-Family Residential Bill Impacts
Single-family residential wastewater bills based on current FY 2025/26 and proposed FY 2026/27 rates were compared to evaluate the impacts of the proposed rate changes (see Table 1-8). The bills are shown for inside City accounts on both a monthly and annual basis, as single-family residential wastewater charges are recovered by the City on the Ventura County property tax roll.

Table 1-8: Single-Family Residential Bill Impacts (FY 2026/27) Description Current
Proposed
July 2026
Difference
($)
Difference
(%)
Monthly Wastewater Bill $39.17 $42.88 $3.71 9.5%
Annual Wastewater Bill $470.04 $514.56 $44.52 9.5%

Average Monthly Bill Impacts by Customer Class
Monthly wastewater bills based on current FY 2025/26 and proposed FY 2026/27 rates were compared for the average customer within each customer class (see Table 1-9). Note that the overall average bill increase across all customer classes is 7% per the proposed FY 2026/27 revenue adjustment. Distributional impacts to various customer classes are due to the updated cost-of-service analysis. Bill changes that differ significantly from the 7% average increase are noted below:
 Multi-family residential bills decrease due to the proposed reduction in assumed multi-family residential flow from 100% to 80% of single-family residential flow on a per dwelling unit basis.
 Monthly bills for schools increase due to the proposed increase in assumed strength concentrations for schools relative to the prior cost-of-service analysis.  Monthly bills for industrial/high flow and car washes increase due to the proposed ERU revision from 180 GPD to 150 GPD.

All three changes outlined above were deemed necessary to comply with cost-of-service principles and ensure that all customers were allocated costs in a fair and consistent manner.

City of Thousand Oaks 2025 Wastewater Rate Study

10 Table 1-9: Average Customer Bill Impacts (FY 2026/27) Customer Class
# of
Accounts
Average
Monthly Bill
(Current)
Average
Monthly Bill
(Proposed
July 2026)
Difference
($)
Difference
(%)
Single-Family Residential 36,525 $39.17 $42.88 $3.71 9.5% Multi-Family Residential 573 $541.02 $473.82 ($67.20) -12.4% General Commercial
(Offices/Retail/All Other) 1,347 $171.02 $187.22 $16.20 9.5% Markets/Mortuaries 19 $535.60 $548.27 $12.67 2.4%
Restaurants/Bakeries 49 $110.31 $114.00 $3.69 3.3%
Restaurants with Grease Trap 215 $171.61 $157.87 ($13.74) -8.0% Schools 45 $420.07 $549.73 $129.66 30.9%
Industrial/High Flow 6 $21,472.35 $26,343.37 $4,871.02 22.7% Car Washes 4 $1,830.35 $2,261.69 $431.34 23.6%
Total 38,783 $56.20 $60.16 $3.96 7.0%

WASTEWATER CONNECTION FEE UPDATE
Connection Fee Overview
New connections to the City’s wastewater system are subject to wastewater connection 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 wastewater connection fee is $11,135 per Service Unit. Public wastewater 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 wastewater connection fee update study in 2020.

Since 2020, the City has increased its wastewater 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 wastewater 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 wastewater connection fees. WRE recommends retaining this methodology, as existing wastewater system capacity is still expected to be sufficient to accommodate future growth.

City of Thousand Oaks 2025 Wastewater Rate Study

11 Proposed Wastewater Connection Fee
The proposed wastewater connection fee per Service Unit was calculated based on the Buy-in Method and is shown below in Table 1-10. The proposed fee is approximately 4% higher per Service Unit compared to the current fee. WRE recommends that the City continue to adjust its wastewater connection fee every two years in proportion to changes in the Engineering-News Record’s Construction Cost Index for Los Angeles. WRE also recommends that all Service Unit determinations for the purposes of assessing wastewater connection fees are consistent with the revised Service Unit determinations for proposed wastewater rates.

Table 1-10: Proposed Wastewater Connection Fees
Wastewater Connection Fees Current
Proposed Connection Fee per Service Unit $11,608
Current Connection Fee per Service Unit $11,135
Difference ($) $473

City of Thousand Oaks 2025 Wastewater Rate Study

12 2. INTRODUCTION

2.1 WASTEWATER SYSTEM OVERVIEW
The City provides wastewater collection, treatment, and disposal services to over 38,000 connections within City limits and surrounding unincorporated areas of Ventura County, covering nearly 90% of properties in Thousand Oaks. About 95% of all wastewater connections serve single-family residences, with remaining connections serving multi-family residential, commercial, institutional, and industrial customers. The City collects and conveys over 8 million gallons per day (MGD) of wastewater through approximately 415 miles of wastewater collection pipes and two lift stations to its Hill Canyon Treatment Plant. Wastewater is treated to tertiary standards at Hill Canyon Treatment Plant and discharged to the North Fork of Arroyo Conejo Creek.

2.2 RATE STUDY OVERVIEW
The City’s Wastewater Fund functions as a self-sustaining enterprise and is primarily funded by customer rates. The City’s currently adopted two-year wastewater rate schedule spans from FY 2024/25 through FY 2025/26 and was developed during a prior rate study completed in 2023. Public wastewater agencies in California typically conduct a rate study periodically to ensure that customers are appropriately charged for service in compliance with California Proposition 218 and other applicable laws.

The City engaged WRE to conduct this 2025 Wastewater Rate Study to establish a two-year proposed wastewater rate schedule for FY 2026/27 through FY 2027/28. The primary purpose of this rate study is to reevaluate the Wastewater 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 Wastewater Rate Study, WRE also developed updated wastewater connection fees for the City. Wastewater connection fees are one-time fees paid by new development to connect to the City’s wastewater system.

2.3 LEGAL REQUIREMENTS
Legal considerations relating to wastewater 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 wastewater 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 wastewater agencies in California must demonstrate a sufficient nexus between the costs incurred by the agency to provide wastewater service and the rates charged to customers. The primary means by which public wastewater 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 City of Thousand Oaks 2025 Wastewater Rate Study

13 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 Wastewater Rate Study was conducted using industry-standard methodology outlined by the WEF in its Manual of Practice No. 27: Financing And Charges for Wastewater Systems, Fourth Edition and 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 below:

2. Cost-of-Service Analysis: System costs are evaluated and allocated to customers in proportion to their use of the wastewater 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 wastewater 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 wastewater system every six years. The City’s prior cost-of- service analysis was completed in 2019. Therefore, an updated cost-of-service analysis was conducted as part of the 2025 Wastewater 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. 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 Wastewater Rate Study.

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 presented in this report are shown on a monthly basis.

City of Thousand Oaks 2025 Wastewater Rate Study

14  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 Wastewater Rate Study

15 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 wastewater rates on an annual basis to support the Wastewater Enterprise’s financial needs. Although the City only adopts two-year wastewater 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 Wastewater 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 Wastewater 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 Wastewater 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 WASTEWATER RATES
The City’s wastewater rates are adjusted at the beginning of each fiscal year in July. The City’s currently adopted two-year wastewater rate schedule extends through FY 2025/26. Year two of the adopted rate schedule has been in effect since July 2025 (see Table 3-1). Single-family residential wastewater charges are collected on the Ventura County property tax roll. All other customers are billed monthly by the City. The City’s current wastewater rate structure consists of the following charges:

City of Thousand Oaks 2025 Wastewater Rate Study

16  Fixed Charges: Each wastewater connection is subject to a fixed charge per Service Unit. One Service Unit represents the wastewater loadings from a typical single-family residence. The current method to determine the number of Service Units attributable to each customers is defined in detail in the following subsection.
 Outside City Surcharge: Each wastewater connection located outside of City limits is subject to an additional surcharge per Service Unit. Outside City surcharges are intended to recover taxes the City pays to Ventura County to extend wastewater pipelines through County land.

Table 3-1: Current Wastewater Charges
Current Wastewater Charges (per Month) July 2025
Fixed Charge (per Service Unit) $39.17
Outside City Surcharge (per Service Unit) $0.55

CURRENT SERVICE UNIT DETERMINATIONS
Current charges are on a per Service Unit basis to ensure that customers are billed in proportion to estimated wastewater loadings discharged to the wastewater system. One Service Unit represents the wastewater loadings from one typical single-family residence. Therefore, all single-family residential customers are billed based on one Service Unit. The number of Service Units for each customer is currently determined based on the following formula:

ERUs are used to normalize to a single-family residence equivalency before accounting for differences in flow and strength generation.5 For residential customers, one ERU equals one dwelling unit. For most non-residential customers, one ERU equals 20 fixture units.6 For certain high flow customers such as large industrial facilities and car washes, one ERU is equal to 180 gallons per day (GPD) based on average daily flow measured for each customer. Currently there are only ten wastewater accounts classified as high flow industrial or car wash. For each customer, a unique Service Unit count is determined by multiplying the ERU count by a flow/strength adjustment factor to normalize for flow and strength differences between customer classes (see Table 3-2).

5 Wastewater flow refers to the quantity of water discharged to the wastewater collection system. Strength refers to the concentration of contaminants in water discharged to the system. 6 A fixture unit is a unit of measure of water discharged to a wastewater system by various plumbing fixtures (such as sinks, bathtubs, toilets, etc.). Fixture units account for discharge rates, time of operation, and frequency of use of various plumbing fixtures.

City of Thousand Oaks 2025 Wastewater Rate Study

17 Table 3-2: Current Service Unit Determinations
Customer Class ERU Definition
Flow/Strength
Adjustment Factor
Residential
Single-Family Residential 1 dwelling unit 1.00
Multi-Family Residential 1 dwelling unit 1.00

Non-Residential
General Commercial (Offices/Retail/All Other) 20 fixture units 1.00 Markets/Mortuaries 20 fixture units 1.82
Restaurants/Bakeries 20 fixture units 1.81
Restaurants with Grease Trap 20 fixture units 1.19
Schools 20 fixture units 0.535
Industrial/High Flow 180 GPD 0.67
Car Washes 180 GPD 0.71

PROJECTED SERVICE UNITS
The number of Service Units were projected over the study period by increasing FY 2025/26 estimated Service Unit counts based on the annual account growth assumptions shown below in Table 3-3. 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 Service Unit counts are shown over the study period in Table 3-4. Total Service Units are projected to increase by approximately 0.4% annually.

Table 3-3: Assumed Account Growth
Customer Class
Annual Account
Growth
Single-Family Residential 0.2%
Multi-Family Residential 1.0%
Non-Residential 0.5%

City of Thousand Oaks 2025 Wastewater Rate Study

18 Table 3-4: Number of Service Units
Number of Service Units
FY 2025/26
Estimated
FY 2026/27
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
Inside City
Single-Family Residential 34,481 34,550 34,619 34,688 34,758 Multi-Family Residential 7,854 7,933 8,012 8,092 8,173
General Commercial
(Offices/Retail/All Other) 5,868 5,898 5,927 5,957 5,986 Markets7/Mortuaries 260 261 262 264 265
Restaurants8/Bakeries9 138 139 139 140 141
Restaurants with Grease Trap 942 947 951 956 961
Schools10 466 468 471 473 475
Industrial/High Flow 3,242 3,258 3,274 3,291 3,307
Car Washes 187 188 189 190 191
Subtotal 53,438 53,641 53,845 54,051 54,257

Outside City
Single-Family Residential 2,044 2,048 2,052 2,056 2,060 Multi-Family Residential 59 60 60 61 61
General Commercial
(Offices/Retail/All Other) 13 13 13 13 13
Markets/Mortuaries 0 0 0 0 0
Restaurants/Bakeries 0 0 0 0 0
Restaurants with Grease Trap 0 0 0 0 0
Schools 16 16 16 17 17
Industrial/High Flow 47 47 47 47 48
Car Washes 0 0 0 0 0
Subtotal 2,179 2,184 2,189 2,194 2,199

Total 55,617 55,825 56,034 56,245 56,457
% Change 0.4% 0.4% 0.4% 0.4%

7 A market is a large commercial operation with two or more of the following: seafood, produce, bakery, meat packaging/processing, or delicatessen.
8 A restaurant is defined as is an establishment engaged in the retail sale of prepared food and drinks for on premises or immediate consumption. A cafeteria is similar in function and, with the exception of school facilities and non -commercial caterers, shall be deemed the same as a restaurant.
9 A bakery is defined as a large commercial operation which produces baked goods for wholesale purposes. 10 A school is defined as a public or private educational institution with a campus which is dedicated to the instruction of children from kindergarten to twelfth grade or a public or private college or university with a campus which offers classes with a minimum duration of eight weeks.

City of Thousand Oaks 2025 Wastewater Rate Study

19 REVENUE FROM CURRENT RATES
Annual revenues from current rates (effective July 2025) were projected over the study period (see Table 3-5). Fixed charge revenues were calculated by multiplying the current monthly fixed charge per Service Unit (from Table 3-1) by the total projected number of Service Units each year (from Table 3-4) and then multiplying by 12 months. Outside City surcharge revenues were calculated by multiplying the current monthly surcharge per Service Unit (from Table 3-1) by the projected number of outside City Service Units each year (from Table 3-4) and then multiplying by 12 months.

Table 3-5: Revenue from Current Rates
Revenues from Current
Rates
FY 2025/26
Projected
FY 2026/27
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
Fixed Charges $26,142,174 $26,239,979 $26,338,355 $26,437,308 $26,536,842 Outside City Surcharges $14,380 $14,413 $14,447 $14,480 $14,514 Total $26,156,554 $26,254,392 $26,352,802 $26,451,788 $26,551,356 % Change 0.4% 0.4% 0.4% 0.4%

MISCELLANEOUS NON-RATE REVENUES
The Wastewater Enterprise also collects revenue from miscellaneous non-rate sources, which were projected over the study period (see Table 3-6). 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 3-6: Miscellaneous Non-Rate Revenue
Miscellaneous Non-Rate
Revenues
FY 2025/26
Budget
FY 2026/27
Budget
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
Interest Income $1,020,238 $880,144 $704,662 $609,274 $541,021 Miscellaneous Revenue $693,000 $685,000 $685,000 $685,000 $685,000 Other Water Sales $447,500 $447,500 $447,500 $447,500 $447,500 Connection Fees $475,000 $475,000 $475,000 $475,000 $475,000 Rental of City Facilities $46,200 $46,200 $46,200 $46,200 $46,200 Inspection Fees $25,000 $25,000 $25,000 $25,000 $25,000 Total $2,706,938 $2,558,844 $2,383,362 $2,287,974 $2,219,721 % Change -5.5% -6.9% -4.0% -3.0%

City of Thousand Oaks 2025 Wastewater Rate Study

20 REVENUE SUMMARY
A summary of total projected revenues over the study period is shown below (see Table 3-7), and includes both revenue from current rates (from Table 3-5) and miscellaneous non-rate revenues (from Table 3-6). 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 (which are addressed in subsequent report sections).

Table 3-7: 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 Wastewater Rates $26,156,554 $26,254,392 $26,352,802 $26,451,788 $26,551,356 Interest Income $1,020,238 $880,144 $704,662 $609,274 $541,021 Miscellaneous Revenue $693,000 $685,000 $685,000 $685,000 $685,000 Other Water Sales $447,500 $447,500 $447,500 $447,500 $447,500 Connection Fees $475,000 $475,000 $475,000 $475,000 $475,000 Rental of City Facilities $46,200 $46,200 $46,200 $46,200 $46,200 Inspection Fees $25,000 $25,000 $25,000 $25,000 $25,000 Total $28,863,492 $28,813,236 $28,736,163 $28,739,762 $28,771,077 % Change -0.2% -0.3% 0.0% 0.1%

3.3 OPERATIONS & MAINTENANCE EXPENSES
Wastewater Enterprise O&M expenses 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, O&M expenses were projected by increasing FY 2026/27 budgeted amounts by the annual inflationary increases shown in Table 3-8. 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/wastewater utility industry and broader economy.

Table 3-8: O&M Expense Annual Inflationary Assumptions
Expense Category
Annual
Inflation
General 2.5%
Salaries/Benefits 4.0%
Electricity/Chemicals 3.0%
Construction 3.0%

Nearly all O&M expenses were treated as fixed costs. However, Hill Canyon Treatment Plant electricity and chemical costs and lift station electricity costs were treated as variable costs because City of Thousand Oaks 2025 Wastewater Rate Study

21 they vary in proportion to system wastewater flows. These costs were therefore increased in proportion to overall annual changes in Service Unit counts after adjusting for inflation. A summary of annual O&M expenses is provided in Table 3-9. Please refer to Appendix A for detailed annual O&M expense projections on a line item basis.

Table 3-9: Summary of O&M Expenses
O&M Expenses
FY 2025/26
Budget
FY 2026/27
Budget
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
Administration $4,273,982 $4,579,429 $4,699,889 $4,823,599 $4,950,651 Capital/ Development
Engineering Services $2,294,842 $2,267,643 $2,356,859 $2,449,607 $2,546,025 Hill Canyon Treatment Plant $11,710,871 $12,025,854 $12,437,383 $12,863,466 $13,304,631 Industrial Waste Inspection $498,274 $511,907 $530,547 $549,887 $569,952 Municipal Service Center $750,820 $775,797 $802,019 $829,170 $857,283 Wastewater Lines $3,606,359 $3,571,762 $3,693,673 $3,819,908 $3,950,624 Wastewater Capital
Program $481,650 $1,231,650 $1,264,850 $1,298,951 $1,333,980 Total $23,616,798 $24,964,042 $25,785,220 $26,634,587 $27,513,146 % Change 5.7% 3.3% 3.3% 3.3%

3.4 DEBT SERVICE
The City’s Wastewater 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 wastewater CIP projects.

Therefore, no debt service was incorporated into the financial plan projections.

City of Thousand Oaks 2025 Wastewater Rate Study

22 3.5 CAPITAL IMPROVEMENT PROGRAM EXPENSES
The City’s currently adopted CIP budget includes $85.6 million of Wastewater 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 Hill Canyon Treatment Plant repairs and upgrades, wastewater pipe relining, and other infrastructure repair and replacement. While the CIP budget identifies capital investments needed to maintain long-term system 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 3-10). 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 2027/28.11  Execution factors (Lines 4) were applied to inflated CIP expenses (Line 3) to estimate executed CIP each year (Line 5).12  The five-year total for executed CIP (Line 5) was distributed evenly across the study period to reflect annual CIP funding requirements from Wastewater Enterprise rates and reserves (Line 6).

Table 3-10: 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) $37,684,874 $10,935,750 $21,019,300 $11,270,000 $4,700,000 $85,609,924 2 Annual Inflationary Adjustment N/A N/A 3% 3% 3%
3 Five-Year CIP (adjusted for inflation) $37,684,874 $10,935,750 $21,649,879 $11,956,343 $5,135,817 $87,362,663 4 Execution Factor 70% 70% 70% 70% 70% 70%
5 Executed CIP13 $26,379,412 $7,655,025 $15,154,915 $8,369,440 $3,595,072 $61,153,864 6 Levelized CIP Funding $12,230,773 $12,230,773 $12,230,773 $12,230,773 $12,230,773 $61,153,864

11 Consistent with long-term annual changes in the Engineering News-Record’s Construction Cost Index (20-City Average). 12 Execution factors were determined based on historical CIP execution rates as well as City staff estimates of future project execution. 13 All CIP is assumed to be funded by rates and reserves over the study period (i.e., no grants, debt financing, or other funding sources are expected).

City of Thousand Oaks 2025 Wastewater Rate Study

23 3.6 RESERVE TARGETS
Public wastewater utilities need to maintain sufficient cash reserves to cover expenses and mitigate financial risks. It is common practice for public wastewater utilities to establish reserve target levels to ensure that cash reserves are maintained at appropriate levels. The Wastewater Enterprise’s current reserve policy specifies target levels for three separate reserves (see Table 3-11):
 Operating Reserve: The current target is set equal to 25% of annual O&M expenses and is intended to provide sufficient cash on hand at all times to cover O&M expenses. The current target is consistent with industry standards and sufficient to cover operating expenses during short-term cash flow imbalances. 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 Wastewater Enterprise to draw upon a portion of 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 wastewater system’s most critical capital asset
14 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 3-11: 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 3-12). The operating reserve target equals 25% of projected annual O&M expenses (from Table 3-9). The capital reserve target equals annual levelized CIP funding (from Table 3-10). The emergency reserve target equals the current estimated replacements cost of the Hill Canyon Treatment Plant chlorine contact chamber and filter influent pumps.

14 The wastewater system’s most critical asset is the Hill Canyon Treatment Plan t chlorine contact chamber and filter influent pumps.

City of Thousand Oaks 2025 Wastewater Rate Study

24 Table 3-12: Projected Target Reserve Levels
Reserve Targets
FY 2025/26
Projected
FY 2026/27
Projected
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
Operating Reserve $5,904,200 $6,241,011 $6,446,305 $6,658,647 $6,878,287 Capital Reserve $12,230,773 $12,230,773 $12,230,773 $12,230,773 $12,230,773 Emergency Reserve $3,518,943 $3,518,943 $3,518,943 $3,518,943 $3,518,943 Total $21,653,915 $21,990,726 $22,196,021 $22,408,363 $22,628,002

3.7 STATUS QUO FINANCIAL PLAN

STATUS QUO FINANCIAL PLAN
Status quo financial plan projections were developed to evaluate whether current rates will generate sufficient revenue over the study period to meet the Wastewater Enterprise’s financial needs (see Table 3-13). 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 3-7). Revenue adjustments (Line 3) represent additional revenue from rate increases and are therefore excluded from the status quo financial plan. Uses of funds include O&M expenses (from Table 3-9) and CIP expenses (from Table 3-10). Projected reserve ending balances were compared to the projected reserve target levels based on the proposed reserve policy (from Table 3-11).

Under the status quo financial plan, Wastewater Enterprise cash reserves are projected to fall below the proposed reserve target level beginning in FY 2028/29 due the steady decline of reserve levels over the study period. This is due to the reliance on reserves to cover a significant portion of CIP expenses. This demonstrates that current rates are insufficient to meet the Wastewater Enterprise’s capital funding requirements over the five-year study period. A graphical summary of the status quo financial plan is provided in Figure 3-1.

City of Thousand Oaks 2025 Wastewater Rate Study

25 Table 3-13: Status Quo Financial Plan
Line Description
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 $26,156,554 $26,254,392 $26,352,802 $26,451,788 $26,551,356 3 Revenue Adjustments $0 $0 $0 $0 $0
4 Miscellaneous Non-Rate Revenues15 $2,706,938 $2,558,844 $2,308,420 $2,113,821 $1,900,036 5 Total Source of Funds $28,863,492 $28,813,236 $28,661,222 $28,565,609 $28,451,392 6 7 Use of Funds
8 O&M Expenses $23,616,798 $24,964,042 $25,785,220 $26,634,587 $27,513,146 9 Debt Service $0 $0 $0 $0 $0
10 CIP Expenses $12,230,773 $12,230,773 $12,230,773 $12,230,773 $12,230,773 11 Total Use of Funds $35,847,571 $37,194,815 $38,015,993 $38,865,360 $39,743,919 12 13 Cash Reserves
14 Beginning Cash Balance16 $51,843,914 $44,859,835 $36,478,256 $27,123,485 $16,823,734 15 Net Cash Flow17 ($6,984,079) ($8,381,579) ($9,354,771) ($10,299,751) ($11,292,527) 16 Ending Cash Balance $44,859,835 $36,478,256 $27,123,485 $16,823,734 $5,531,207 17 18 Target Reserve Level $21,653,915 $21,990,726 $22,196,021 $22,408,363 $22,628,002 19 Target Reserve Level Met? Yes Yes Yes No No

15 Miscellaneous non-rate revenues differ from totals shown in Table 3-6 in the final three years, as interest income is lower under the status quo financial plan (due to lower cash reserve levels).
16 Beginning FY 2025/26 cash balance reflects estimated cash reserves as of July 2025. 17 = [Line 5] – [Line 11].

City of Thousand Oaks 2025 Wastewater Rate Study

26 Figure 3-1: Status Quo Financial Plan – Projected Cash Reserves

City of Thousand Oaks 2025 Wastewater Rate Study

27 3.8 PROPOSED FINANCIAL PLAN

PROPOSED REVENUE ADJUSTMENTS
Revenue adjustments represent increased revenues resulting from proposed rate increases. WRE worked with City staff to establish a proposed revenue adjustment scenario that would sufficiently meet the Wastewater Enterprise’s funding requirements while minimizing customer bill impacts. The proposed revenue adjustment scenario includes revenue adjustments of 7% each year from FY 2025/26 through FY 2029/30 (see Table 3-14). The need for 7% revenue adjustments is primarily driven by significant planned CIP, and also by ongoing cost inflation.

Note that revenue adjustments in the final two years of the five-year study period are for planning purposes only, as the City adopts two-year wastewater rate schedules. All proposed revenue adjustments are assumed to be implemented in July at the beginning of each fiscal year. The cumulative increase in revenues due to the proposed revenue adjustments is also shown in Table 3-14.

The currently adopted wastewater rate schedule included 11% annual revenue adjustments.

Table 3-14: Proposed Revenue Adjustments
Description FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Revenue Adjustments
Revenue Adjustment % N/A 7.0% 7.0% 7.0% 7.0%
Effective Month July 2026 July 2027 July 2028 July 2029 Months Effective in Fiscal Year 12 12 12 12

Additional Rate Revenue
FY 2025/26 Revenue Adjustment $0 $0 $0 $0 $0
FY 2026/27 Revenue Adjustment $1,837,807 $1,844,696 $1,851,625 $1,858,595 FY 2027/28 Revenue Adjustment $1,973,825 $1,981,239 $1,988,697 FY 2028/29 Revenue Adjustment $2,119,926 $2,127,905 FY 2029/30 Revenue Adjustment $2,276,859
Total $0 $1,837,807 $3,818,521 $5,952,790 $8,252,055

City of Thousand Oaks 2025 Wastewater Rate Study

28 PROPOSED FINANCIAL PLAN
Proposed financial plan projections were developed to evaluate the sufficiency of the proposed revenue adjustments over the study period (see Table 3-15). The proposed financial plan projections were calculated by applying the same methodology described previously for the status quo financial plan projections in Table 3-13. The primary difference is that revenue adjustments under the proposed financial plan (from Table 3-14) 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 57% of CIP expenses are projected to be covered by reserves. This is projected to decline to 22% 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 3-2.

City of Thousand Oaks 2025 Wastewater Rate Study

29 Table 3-15: Proposed Financial Plan
Line Description
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 $26,156,554 $26,254,392 $26,352,802 $26,451,788 $26,551,356 3 Revenue Adjustments $0 $1,837,807 $3,818,521 $5,952,790 $8,252,055 4 Miscellaneous Non-Rate Revenues $2,706,938 $2,558,844 $2,383,362 $2,287,974 $2,219,721 5 Total Source of Funds $28,863,492 $30,651,043 $32,554,684 $34,692,552 $37,023,132 6 7 Use of Funds
8 O&M Expenses $23,616,798 $24,964,042 $25,785,220 $26,634,587 $27,513,146 9 Debt Service $0 $0 $0 $0 $0
10 CIP Expenses $12,230,773 $12,230,773 $12,230,773 $12,230,773 $12,230,773 11 Total Use of Funds $35,847,571 $37,194,815 $38,015,993 $38,865,360 $39,743,919 12 13 Cash Reserves
14 Beginning Cash Balance18 $51,843,914 $44,859,835 $38,316,064 $32,854,755 $28,681,947 15 Net Cash Flow19 ($6,984,079) ($6,543,772) ($5,461,309) ($4,172,808) ($2,720,787) 16 Ending Cash Balance $44,859,835 $38,316,064 $32,854,755 $28,681,947 $25,961,160 17 18 Target Reserve Level $21,653,915 $21,990,726 $22,196,021 $22,408,363 $22,628,002 19 Target Reserve Level Met? Yes Yes Yes Yes Yes

18 Beginning FY 2025/26 cash balance reflects estimated cash reserves as of July 2025. 19 = [Line 5] – [Line 11].

City of Thousand Oaks 2025 Wastewater Rate Study

30 Figure 3-2: Proposed Financial Plan – Projected Cash Reserves

City of Thousand Oaks 2025 Wastewater Rate Study

31 4. COST-OF-SERVICE ANALYSIS

4.1 COST-OF-SERVICE METHODOLOGY
A cost-of-service analysis was conducted to allocate the wastewater rate revenue requirement to customers in proportion to their utilization of the City’s wastewater system. The overall goal of the cost-of-service analysis was to develop “unit costs” to equitably allocate the rate revenue requirement among customer classes. Although the rate-setting period in this study spans two years, the cost-of-service analysis is limited to a single representative year referred to as the “test year.” The test year in this study is FY 2025/26. All values presented in Section 4 pertain to FY 2025/26 unless stated otherwise. The key steps in conducting the wastewater cost-of-service analysis were:
 Revenue requirement determination: The total rate revenue requirement for the test year was determined based on the results of the proposed financial plan and divided into separate operating and capital sub-components.
 Cost allocation to functional categories: Operating and capital costs were evaluated and assigned to “functional categories” in the wastewater system (e.g., collection, treatment, etc.). This established a proportional breakdown of system costs by functional category.  Revenue requirement allocation to cost causation components: Functionalized costs were then allocated to “cost causation components,” which were used to establish proportionality between the utilization of the system and the incursion of costs in the test year.  Treatment plant mass balance analysis: Total wastewater treatment plant influent flow and strength loadings were attributed to customer classes based on historical treatment plant data and various flow and strength assumptions.
 Unit cost development: The rate revenue requirement allocation for each individual cost causation component was divided by the associated units of service. Units of service were based on total treatment plant loadings estimated in the mass balance analysis.  Revenue requirement allocation to customer classes: Loading estimates from the mass balance analysis and unit costs were utilized to proportionally allocate the total rate revenue requirement to each customer class.

4.2 REVENUE REQUIREMENT DETERMINATION
The total rate revenue requirement is equal to total projected FY 2025/26 rate revenues per the proposed financial plan and was allocated to two primary sub-components (see Table 4-1):
 The Operating revenue requirement includes budgeted FY 2025/26 O&M expenses and all miscellaneous non-rate revenues (except for connection fees). Miscellaneous non-rate revenues cover a portion of the total revenue requirement, thus reducing the total amount of revenue required from rates.
 The Capital revenue requirement includes FY 2025/26 CIP expenses, connection fee revenues, and an adjustment to account for changes in cash reserve levels. Connection fee revenues City of Thousand Oaks 2025 Wastewater Rate Study

32 (Line 6) are related to capital investment and were therefore applied as a funding source towards the capital revenue requirement. The projected drawdown in cash reserves in FY 2025/26 (Line 9) is necessary to cover a portion of CIP expenses and was therefore also applied as a funding source towards the capital revenue requirement.

Table 4-1: FY 2025/26 Rate Revenue Requirement Determination Line Description
Operating
Revenue
Requirement
Capital
Revenue
Requirement
Total Rate
Revenue
Requirement
1 O&M Expenses20 $23,616,798 $0 $23,616,798
2 CIP Expenses21 $0 $12,230,773 $12,230,773
3 Less Interest Income22 ($1,020,238) $0 ($1,020,238)
4 Less Miscellaneous Revenue ($693,000) $0 ($693,000)
5 Less Other Water Sales ($447,500) $0 ($447,500)
6 Less Connection Fees $0 ($475,000) ($475,000)
7 Less Rental of City Facilities ($46,200) $0 ($46,200) 8 Less Inspection Fees ($25,000) $0 ($25,000)
9 Contribution to (Draw from) Reserves23 $0 ($6,984,079) ($6,984,079) 10 Total24 $21,384,860 $4,771,694 $26,156,554

4.3 ALLOCATIONS TO FUNCTIONAL CATEGORIES

FUNCTIONAL CATEGORY DEFINITIONS
After determining the rate revenue requirement, the next step in the cost-of-service analysis was to allocate Wastewater Enterprise costs to various functional categories. These categories represent different functions within the City’s wastewater sewer system and include:
 Collection: Related to the wastewater collection system, which includes wastewater pipelines other infrastructure required to convey wastewater flows to Hill Canyon Treatment Plant.  Treatment: Related to the treatment of wastewater at Hill Canyon Treatment Plant.  Capital/Engineering: Operating costs related to construction, engineering, and execution of capital projects.
 Outside City: Costs incurred to serve outside City customers only.  General: Related to administrative/overhead activities or other activities not directly attributable to other functional categories.

20 Equal to budgeted FY 2025/26 O&M expenses from Table 3-15. 21 Equal to FY 2025/26 CIP expenses from Table 3-15.
22 Miscellaneous non-rate revenues in Lines 3-8 equal FY 2025/26 revenues from Table 3-7. 23 Equal to FY 2025/26 net cash flow from Table 3-15.
24 Equal to FY 2025/26 current rate revenue plus revenue adjustments from Table 3-15.

City of Thousand Oaks 2025 Wastewater Rate Study

33 ALLOCATION OF OPERATING REVENUE REQUIREMENT TO FUNCTIONAL CATEGORIES Budgeted FY 2025/26 O&M expenses and miscellaneous non-rate revenues allocated to the operating revenue requirement were evaluated and allocated to the most closely associated functional categories (see Table 4-2). The outside City functional category allocation is limited to taxes paid by the City to Ventura County to extend pipelines through County land, which are to be recovered from outside City customers through outside City surcharges. O&M expenses related to administration and overhead, as well as miscellaneous non-rate revenues, were allocated to the general functional category.

Table 4-2: Operating Revenue Requirement Allocation to Functional Categories

FUNCTIONAL CATEGORY
Line Operating Revenue Requirement (FY 2025/26) Collection Treatment Capital/
Engineering Outside City General Total
1 O&M Expenses: Administration $0 $0 $0 $17,307 $4,256,675 $4,273,982 2 O&M Expenses: Capital/ Development
Engineering Services $0 $0 $2,294,842 $0 $0 $2,294,842 3 O&M Expenses: Hill Canyon Treatment Plant $0 $11,710,871 $0 $0 $0 $11,710,871 4 O&M Expenses: Industrial Waste Inspection $0 $498,274 $0 $0 $0 $498,274 5 O&M Expenses: Municipal Service Center $0 $0 $0 $0 $750,820 $750,820 6 O&M Expenses: Wastewater Lines $3,606,359 $0 $0 $0 $0 $3,606,359 7 O&M Expenses: Wastewater Capital Program $0 $0 $481,650 $0 $0 $481,650 8 Less Miscellaneous Non-Rate Revenues $0 $0 $0 $0 ($2,231,938) ($2,231,938) 9 TOTAL OPERATING REVENUE REQUIREMENT ($) $3,606,359 $12,209,145 $2,776,492 $17,307 $2,775,557 $21,384,860 10 TOTAL OPERATING REVENUE REQUIREMENT (%) 16.86% 57.09% 12.98% 0.08% 12.98% 100.00%

City of Thousand Oaks 2025 Wastewater Rate Study

34 ALLOCATION OF CAPITAL ASSETS TO FUNCTIONAL CATEGORIES Current wastewater system capital assets were evaluated and allocated to the most closely associated functional category (see Table 4-3). It is standard practice in wastewater cost-of-service studies to allocate the capital revenue requirement to functional categories based on existing capital assets rather than planned CIP expenses. This is because the breakdown of planned CIP projects by functional category can fluctuate significantly from year to year. The existing capital asset base provides a much more stable representation of long-term capital needs. Capital asset values shown are based on the estimated replacement cost of each asset. WRE estimated the replacement cost of each asset by escalating the original costs to 2025 dollars using the Engineering News-Record Construction Cost Index (20-city average).

Table 4-3: Capital Asset Allocation to Functional Categories

FUNCTIONAL CATEGORIES
Line Wastewater System Capital Assets Collection Treatment Capital/
Engineering Outside City General Total
1 Buildings $222,564 $52,682,106 $0 $0 $5,024,536 $57,929,206 2 Equipment $6,049,515 $17,076,471 $0 $0 $120,069 $23,246,055 3 Improvements other than Buildings $272,742,481 $264,492,396 $0 $0 $7,918,732 $545,153,610 4 Intangibles $0 $0 $0 $0 $138,098 $138,098
5 Land $0 $0 $0 $0 $3,216,055 $3,216,055
6 Works-in-Progress $82,298 $1,422,152 $0 $0 $0 $1,504,450 7 TOTAL CAPITAL ASSETS ($) $279,096,858 $335,673,126 $0 $0 $16,417,491 $631,187,475 6 TOTAL CAPITAL ASSETS (%) 44.22% 53.18% 0.00% 0.00% 2.60% 100.00% City of Thousand Oaks 2025 Wastewater Rate Study

35 4.4 ALLOCATIONS TO COST CAUSATION COMPONENTS

COST CAUSATION COMPONENTS DEFINITIONS
The next step in the cost-of-service analysis was to allocate the total rate revenue requirement to various cost causation components, which were used to establish proportionality between the incursion of costs and utilization of the wastewater system. Some cost causation components directly correspond to a single functional category. The cost causation components include:
 Flow: Wastewater system costs that primarily vary in proportion to the quantity of flow discharged to the wastewater system.
 Biological Oxygen Demand (BOD): Treatment costs related to the breakdown and removal of organic matter from wastewater.
 Total Suspended Solids (TSS): Treatment costs related to the filtration and removal of suspended solids from wastewater.
 Outside City: Directly corresponds to the “outside City” functional category.  General: Directly corresponds to the “general” functional category.

ALLOCATION OF FUNCTIONAL CATEGORIES TO COST CAUSATION COMPONENTS Each functional category was allocated across the five cost causation components (see Table 4-4).

Collection system costs vary primarily in proportion to wastewater flow; thus the collection functional category was fully allocated to the flow cost causation component. Treatment costs vary based on both wastewater flow and strength; thus the treatment functional category was allocated equally across the flow, BOD, and TSS cost causation components. The capital/engineering functional category is limited to operating costs related to construction, engineering, and execution of capital projects, and was therefore allocated to the cost causation components based on the overall capital asset allocations developed subsequently (see Table 4-6, Line 7). The outside City and general functional categories were fully allocated to the corresponding cost causation components.

Table 4-4: Allocation of Functional Categories to Cost Causation Components

COST CAUSATION COMPONENTS
Line Functional Categories Flow BOD TSS
Outside
City General Total
1 Collection 100.00% 0.00% 0.00% 0.00% 0.00% 100.00%
2 Treatment 33.33% 33.33% 33.33% 0.00% 0.00% 100.00%
3 Capital/Engineering 61.94% 17.73% 17.73% 0.00% 2.60% 100.00% 4 Outside City 0.00% 0.00% 0.00% 100.00% 0.00% 100.00%
5 General 0.00% 0.00% 0.00% 0.00% 100.00% 100.00%
City of Thousand Oaks 2025 Wastewater Rate Study

36 ALLOCATION OF OPERATING REVENUE REQUIREMENT TO COST CAUSATION COMPONENTS The operating revenue requirement functional category allocations from Table 4-2 were distributed to the five cost causation components based on the allocation percentages from Table 4-4 (see Table 4-5 below). This results in a breakdown of the total operating revenue requirement by cost causation component (see Lines 6-7).

Table 4-5: Operating Revenue Requirement Allocation to Cost Causation Components

COST CAUSATION COMPONENTS
Line Functional Categories Flow BOD TSS Outside City General Total 1 Collection $3,606,359 $0 $0 $0 $0 $3,606,359
2 Treatment $4,069,715 $4,069,715 $4,069,715 $0 $0 $12,209,145 3 Capital/Engineering $1,719,893 $492,191 $492,191 $0 $72,218 $2,776,492 4 Outside City $0 $0 $0 $17,307 $0 $17,307
5 General $0 $0 $0 $0 $2,775,557 $2,775,557
6 TOTAL OPERATING REVENUE REQUIREMENT ($) $9,395,967 $4,561,906 $4,561,906 $17,307 $2,847,775 $21,384,860 7 TOTAL OPERATING REVENUE REQUIREMENT (%) 43.94% 21.33% 21.33% 0.08% 13.32% 100.00%

City of Thousand Oaks 2025 Wastewater Rate Study

37 ALLOCATION OF CAPITAL REVENUE REQUIREMENT TO COST CAUSATION COMPONENTS The capital asset functional category allocations from Table 4-3 were distributed to the five cost causation components based on the allocation percentages from Table 4-4 (see Table 4-6 below). The capital revenue requirement from Table 4-1 (see Line 9 below) was then allocated based on the proportion of capital assets within each cost causation component (see Line 7 below).

Table 4-6: Capital Revenue Requirement Allocation to Cost Causation Components

COST CAUSATION COMPONENTS
Line Functional Categories Flow BOD TSS
Outside
City General Total
1 Collection $279,096,858 $0 $0 $0 $0 $279,096,858 2 Treatment $111,891,042 $111,891,042 $111,891,042 $0 $0 $335,673,126 3 Capital/Engineering $0 $0 $0 $0 $0 $0
4 Outside City $0 $0 $0 $0 $0 $0
5 General $0 $0 $0 $0 $16,417,491 $16,417,491
6 TOTAL CAPITAL ASSETS ($) $390,987,900 $111,891,042 $111,891,042 $0 $16,417,491 $631,187,475 7 TOTAL CAPITAL ASSETS (%) 61.94% 17.73% 17.73% 0.00% 2.60% 100.00% 8 9 TOTAL CAPITAL REVENUE REQUIREMENT ($) $2,955,817 $845,882 $845,882 $0 $124,114 $4,771,694

City of Thousand Oaks 2025 Wastewater Rate Study

38 PRELIMINARY COST-OF-SERVICE ALLOCATION
A preliminary allocation of the total rate revenue requirement was established by combining the operating revenue requirement allocation from Table 4-5 and the capital revenue requirement allocation from Table 4-6. (see Table 4-7).

Table 4-7: Preliminary Cost-of-Service Allocation
Line Description Flow BOD TSS Outside City General Total 1 Operating Revenue Requirement $9,395,967 $4,561,906 $4,561,906 $17,307 $2,847,775 $21,384,860 2 Capital Revenue Requirement $2,955,817 $845,882 $845,882 $0 $124,114 $4,771,694 3 Total Rate Revenue Requirement ($) $12,351,784 $5,407,787 $5,407,787 $17,307 $2,971,889 $26,156,554 4 Total Rate Revenue Requirement (%) 47.22% 20.67% 20.67% 0.07% 11.36% 100.00%

GENERAL COST REALLOCATION
Because the general cost causation component represents indirect costs, it was proportionally reallocated to all other cost causation components excluding outside City (see Table 4-8). The outside City cost causation component was excluded because it is restricted to taxes paid by the City to Ventura County to extend pipelines through County land.

Table 4-8: General Cost Reallocation
Line Description Flow BOD TSS Outside City General Total 1 Preliminary Cost-of-Service Allocation $12,351,784 $5,407,787 $5,407,787 $17,307 $2,971,889 $26,156,554 2 General Cost Reallocation $1,584,476 $693,706 $693,706 N/A ($2,971,889) $0 3 Total Rate Revenue Requirement ($) $13,936,260 $6,101,494 $6,101,494 $17,307 $0 $26,156,554 4 Total Rate Revenue Requirement (%) 53.28% 23.33% 23.33% 0.07% 0.00% 100.00%

City of Thousand Oaks 2025 Wastewater Rate Study

39 FINAL COST-OF SERVICE ALLOCATION
No further adjustments were incorporated into the cost-of-service allocations. The final allocation of the rate revenue requirement to each cost causation component was previously determined in Table 4-8 and is summarized in Table 4-9 below. The general cost causation component was fully reallocated to other cost causation components and is therefore omitted.

Table 4-9: Final Cost-of-Service Allocation
Line Cost Causation Component
Rate Revenue
Requirement % of Total
1 Flow $13,936,260 53.28%
2 BOD $6,101,494 23.33%
3 TSS $6,101,494 23.33%
4 Outside City $17,307 0.07%
5 Total $26,156,554 100.00%

4.5 MASS BALANCE ANALYSIS

MASS BALANCE ANALYSIS OVERVIEW
The next step in the cost-of-service analysis was to complete a mass balance analysis for Hill Canyon Treatment Plant. Because wastewater loadings are not measurable for each individual customer connection, a mass balance analysis was utilized to estimate flow and strength loadings attributable to each customer class for the test year. This is necessary to establish a basis from which to equitably allocate the rate revenue requirement to each customer class in subsequent steps of the cost-of- service analysis.

HILL CANYON TREATMENT PLANT TOTAL INFLUENT
Total annual treatment plant influent in the test year was set equal to the two-year average of actual monthly flow and strength influent to Hill Canyon Treatment Plant in 2023 and 2024 (see Table 4-10, Line 1). Flow data was provided in MGD and then converted to millions of gallons for one full year.25 Strength concentrations for BOD and TSS were provided in milligrams per liter (mg/L) and converted to thousands of pounds per year based on annual flows and standard conversion factors.26 City staff directed WRE to assume that 5% of total treatment plant influent flows are due to inflow and infiltration (Line 2).27 All residual treatment plant influent was then attributed to the City’s wastewater customers (Line 3).28

25 [Annual flow in million gallons] = [flow in MGD] x [365 days per year]. 26 [Strength in thousands of pounds] = [flow in MGD] x [strength concentration in mg/L] x [3.0461 conversion factor]. 27 Inflow and infiltration refer to system inflows due to stormwater, groundwater seepage, and unauthorized discharges to the collection system. Inflow and infiltration flows are typically low in strength; BOD and TSS concentrations were estimated at 150 mg/L.
28 [Strength concentration in mg/L] = [strength in thousands of pounds] ÷ [flow in MGD] x [0.3283 conversion factor].

City of Thousand Oaks 2025 Wastewater Rate Study

40 Table 4-10: Total Wastewater Treatment Plant Influent Line Description
Flow
(MGD)
BOD
(mg/L)
TSS
(mg/L)
Flow
(Million
Gallons)
BOD
(1,000
pounds)
TSS
(1,000
pounds)
1 Total Plant Influent 8.92 288 301 3,257 7,818 8,175
2 Less Inflow & Infiltration (5%) (0.45) 150 150 (163) (204) (204) 3 Influent Attributable to Customers 8.48 295 309 3,094 7,614 7,971

ANNUAL PROJECTED INFLUENT FLOWS BY CUSTOMER CLASS
A revised ERU definition was developed to estimate flows by customer class in lieu of actual flow measurements for each customer. The current ERU definition of 143 GPD was developed during the prior wastewater cost-of-service analysis in 2019 based on a mass balance analysis conducted at that time. The first step in establishing a revised ERU definition was to isolate total flows in GPD attributable to customers with ERU counts based on dwelling unit and fixture unit counts only.

Accounts classified as industrial/high flow or car wash are billed based on customer-specific average daily flows in GPD.29 Flows attributable to all other customers (see Table 4-11) were determined by subtracting FY 2025/26 industrial/high flow and car wash flows in Lines 2-3 from total estimated influent flow attributable to all customers in Line 1.30

Table 4-11: Wastewater Treatment Plant Influent Flows from Customers Line Influent Flows from Customers GPD
1 Total Flow Attributable to Customers 8,476,408
2 Less Average Daily Flow from Industrial/High Flow (883,463) 3 Less Average Daily Flow from Car Washes (47,387)
4 Remaining Flow Attributable to Customers 7,545,558

Proposed flow adjustment factors represent flow per ERU relative to one single-family residence and were developed to estimate differences in flow generation between customer classes (see Table 4-12). The number of weighted ERUs was determined by multiplying the number of ERUs by the proposed flow adjustment factor for each customer class.

Most customer classes were assumed to have similar flow generation to single-family residences and were thus assigned a 100% flow adjustment factor. Multi-family residential dwelling units were assigned a flow adjustment factor of 80% because multi-family dwellings typically have fewer persons per household and fixture units compared to single-family residences. Although the City’s current wastewater rates assume a 100% flow factor for multi-family, WRE recommends the proposed

29 Average daily flows are based on metered wastewater flows or estimated based on metered water use and assumed return factors (i.e., the percentage of metered water use discharged to the wastewater collection system) . 30 Per total influent attributable to customers in Table 4-10, Line 3 (converted from MGD to GPD).

City of Thousand Oaks 2025 Wastewater Rate Study

41 reduction to 80% to align with industry norms and fairly allocate costs to multi-family residential connections. An 80% factor is more consistent with how other public wastewater agencies in Southern California charge multi-family residential connections.

Schools were assigned a flow factor of 70% to account for reduced usage during the summer and weekends, which is consistent with the prior cost-of-service analysis. No flow adjustment factors were developed for industrial/high flow or cash washes, as these customer classes are billed based on average daily flow estimates for each individual customer account.

Table 4-12: Proposed Flow Adjustment Factors
Line Description # of ERUs
Proposed
Flow
Adjustment
Factor
# of
Weighted
ERUs
1 Single-Family Residential 36,525 100% 36,525
2 Multi-Family Residential 7,913 80% 6,331
3 General Commercial (Offices/Retail/All Other) 5,881 100% 5,881 4 Markets/Mortuaries 143 100% 143
5 Restaurants/Bakeries 76 100% 76
6 Restaurants with Grease Trap 792 100% 792
7 Schools 902 70% 631
8 Total 52,232 50,378

A revised ERU definition of 150 GPD was calculated in Table 4-13 by dividing total estimated treatment plant influent flows attributable to customer excluding industrial/high flow and car washes (from Table 4-11) by the number of weighted ERUs (from Table 4-12). The revised ERU definition of 150 GPD reflects the estimated average daily flow from a typical single-family residence. This represents a 5% increase relative to the current ERU definition of 143 ERU, which is consistent with increases in total treatment plant influent relative to the prior mass balance analysis conducted in 2019.

Table 4-13: Revised ERU Definition
Line Description
1 Flow Attributable to Customers excl. Industrial/High Flow & Car Washes (GPD) 7,545,558 2 # of Weighted ERUs excl. Industrial/High Flow & Car Washes 50,378 3 Revised ERU Definition (GPD) 150

Wastewater treatment plant influent flows were estimated by customer class for the test year based on the revised ERU definition (see Table 4-14). Flows in GPD were estimated for all classes excluding industrial/high flow and car wash in Lines 1-7 as follows:

City of Thousand Oaks 2025 Wastewater Rate Study

42 𝐹𝐹𝐹𝐹𝑜𝑜 𝐹𝐹 (𝑆𝑆𝑈𝑈 𝐺𝐺𝐺𝐺𝐺𝐺) = 𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 𝐸𝐸𝐸𝐸𝑈𝑈 𝑈𝑈 × 𝐺𝐺 𝑁𝑁𝑜𝑜 𝑃𝑃𝑜𝑜𝑈𝑈 𝑁𝑁𝐴𝐴 𝐹𝐹𝐹𝐹𝑜𝑜 𝐹𝐹 𝐴𝐴𝐴𝐴𝐴𝐴𝑁𝑁𝑈𝑈 𝑁𝑁𝑁𝑁𝑈𝑈𝑈𝑈 𝐹𝐹𝐹𝐹𝑆𝑆 𝑈𝑈𝑜𝑜𝑁𝑁 × 150 𝐺𝐺𝐺𝐺𝐺𝐺

R
evised ERU counts for industrial/high flow and car washes in Lines 8-9 were calculated as follows:

𝑁𝑁
𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 𝐸𝐸𝐸𝐸𝑈𝑈
𝑈𝑈 = 𝐹𝐹
𝐹𝐹𝑜𝑜
𝐹𝐹 (𝑆𝑆𝑈𝑈
𝐺𝐺𝐺𝐺𝐺𝐺) ÷ 150 𝐺𝐺𝐺𝐺𝐺𝐺

T
able 4-14: Wastewater Treatment Plant Influent Flows by Customer Class Line Description # of ERUs
Proposed
Flow
Adjustment
Factor Flow (GPD)
Flow
(MGD)31
1 Single-Family Residential 36,525 100% 5,470,625 5.47
2 Multi-Family Residential 7,913 80% 948,204 0.95
3 General Commercial
(Offices/Retail/All Other) 5,881 100% 880,843 0.88
4 Markets/Mortuaries 143 100% 21,380 0.02
5 Restaurants/Bakeries 76 100% 11,419 0.01
6 Restaurants with Grease Trap 792 100% 118,557 0.12
7 Schools 902 70% 94,530 0.09
8 Industrial/High Flow 5,899 N/A 883,463 0.88
9 Car Washes 316 N/A 47,387 0.05
10 Total 58,446 8,476,408 8.48

ANNUAL PROJECTED STRENGTH LOADINGS BY CUSTOMER CLASS
The final step in the mass balance analysis was to estimate strength loadings attributable to each customer class for the test year. Total strength loadings reflect the quantity of contaminants discharged to the wastewater system and were estimated in thousands of pounds of BOD and TSS (see Table 4-15). Strength loadings in thousands of pounds were calculated based on estimated flows (from Table 4-14), assumed strength concentrations in mg/L, and standard conversion factors.32 Assumed strength concentrations were determined as follows:
 Strength concentrations for markets/mortuaries (Line 4), restaurants/bakeries (Line 5), and schools (Line 7) were based on loading assumptions used by the City of Los Angeles and Los Angeles County Sanitation Districts. Actual strength loading data for customer classes with unique strength characteristics is limited among Southern California wastewater agencies.

Therefore, information provided by larger agencies in the region reflects the best available

31 Flow in GPD divided by one million. Total flow in MGD in Line 10 is consistent with total flows attributable to customers in Table 4-10.
32 [Strength in thousands of pounds] = [flow in MGD] x [strength concentration in mg/L] x [3.0461 conversion factor].

City of Thousand Oaks 2025 Wastewater Rate Study

43 estimates. Note that the assumed strength concentrations for schools are significantly higher than in the previous cost-of-service analysis in 2019 but were deemed necessary to align with industry standards and ensure equitable cost-of-service allocations.  Strength concentrations for industrial/high flow (Line 8) and car washes (Line 9) were based on previous strength assumptions used in the prior cost-of-service analysis conducted in 2019.

Industrial/high flow strength likely varies by customer based on business activities (which range from pharmaceuticals to advanced electronics research and manufacturing). Car wash strengths can also vary based on the specific type of car wash technology employed. WRE therefore maintained existing strength estimates for industrial/high flow and car washes, which were previously established by Public Works staff. However, WRE recommends that City staff retain the option to adjust flow and strength assumptions for any customers based on actual loading measurements and/or established engineering practices (as provided for in the City’s currently adopted wastewater rate ordinance).  Strength concentrations for all other customer classes were assumed to be similar to single- family residential customers and were estimated by applying all residual loadings uniformly in proportion to estimated wastewater flows. This resulted in estimated BOD and TSS concentrations of 319 mg/L and 337 m/L, respectively.33 This represents the estimated strength concentrations of a typical single-family residence. Although higher than the previous single-family residential strength estimates of 290 mg/L for both BOD and TSS (per the prior cost-of-service analysis in 2019), the updated values are still well within industry norms and comparable to current strength estimates from neighboring wastewater agencies. Note that restaurants with grease traps (Line 6) were assumed in the previous cost-of service analysis to have strength concentrations that were 40% higher than single-family residential. Due to the lack of updated strength assumptions from neighboring wastewater agencies or other sources, WRE recommended setting strength concentrations for restaurants with grease traps equal to single-family residential.

33 [7,219 residual pounds of BOD] ÷ [2,708 million gallons of residual flow] x [119.82 conversion factor] = [319 mg/L of BOD]. [7,614 residual pounds of TSS] ÷ [2,708 million gallons of residual flow] x [119.82 conversion factor] = [337 mg/L of TSS].

City of Thousand Oaks 2025 Wastewater Rate Study

44 Table 4-15: Wastewater Treatment Plant Flow and Strength Loadings by Customer Class Line Description
Flow
(MGD)
BOD
(mg/L) TSS (mg/L)
Flow
(Million
Gallons)
BOD
(1,000
pounds)
TSS (1,000
pounds)
1 Single-Family Residential 5.47 319 337 1,997 5,324 5,615 2 Multi-Family Residential 0.95 319 337 346 923 973
3 General Commercial (Offices/Retail/All Other) 0.88 319 337 322 857 904 4 Markets/Mortuaries 0.02 800 800 8 52 52
5 Restaurants/Bakeries 0.01 1,000 600 4 35 21
6 Restaurants with Grease Trap 0.12 319 337 43 115 122
7 Schools 0.09 265 275 35 76 79
8 Industrial/High Flow 0.88 83 68 322 223 183
9 Car Washes 0.05 60 150 17 9 22
10 Total 8.48 295 309 3,094 7,614 7,971
City of Thousand Oaks 2025 Wastewater Rate Study

45 4.6 UNIT COST DEVLEOPMENT
The next step in the cost-of-service was to calculate unit costs based on the final cost-of-service allocations and mass balance analysis (see Table 4-16). Unit costs are necessary to allocate the rate revenue requirement to customer classes in proportion to estimated wastewater treatment plant loadings. The flow unit cost in Line 1 was calculated by dividing the final cost-of-service allocation to the flow cost causation component (from Table 4-9) by total flows attributable to customer in millions of gallons (from Table 4-15). The BOD and TSS unit costs in Lines 2-3 were calculated by dividing the final cost-of-service allocation to each cost causation component (from Table 4-9) by total strength loadings attributable to customers in thousands of pounds (from Table 4-15). No unit cost was calculated for the outside City cost causation component, which was allocated based on calculations presented subsequently in Section 5.

Table 4-16: Unit Cost Development
Line Description
Cost-of-Service
Allocation
Units of
Service Unit Cost Unit Definition
1 Flow $13,936,260 3,094 $4,504.448 per Million Gallons 2 BOD $6,101,494 7,614 $801.345 per 1,000 pounds of BOD 3 TSS $6,101,494 7,971 $765.488 per 1,000 pounds of TSS 4 Outside City $17,307 TBD TBD per Outside City Service Unit 5 Total $26,156,554

4.7 COST-OF-SERVICE ALLOCATIONS BY CUSTOMER CLASS
The final step of the cost-of-service analysis was to allocate the rate revenue requirement to each customer class. Unit costs (from Table 4-16) were multiplied by the respective units of service (from Table 4-15) to allocate the flow, BOD, and TSS revenue requirements to each customer class (see Table 4-17).

Table 4-17: Cost Allocations to Customer Classes
Line Customer Class
Flow
Allocation BOD Allocation TSS Allocation
Total (excl.

Outside City)
1 Single-Family Residential $8,994,383 $4,266,036 $4,298,169 $17,558,588 2 Multi-Family Residential $1,558,964 $739,417 $744,986 $3,043,367 3 General Commercial
(Offices/Retail/All Other) $1,448,214 $686,888 $692,062 $2,827,164 4 Markets/Mortuaries $35,152 $41,751 $39,883 $116,786 5 Restaurants/Bakeries $18,775 $27,874 $15,976 $62,625 6 Restaurants with Grease Trap $194,922 $92,452 $93,148 $380,522 7 Schools $155,418 $61,147 $60,615 $277,180
8 Industrial/High Flow $1,452,523 $178,989 $140,080 $1,771,592 9 Car Washes $77,909 $6,940 $16,574 $101,423
10 Total $13,936,260 $6,101,494 $6,101,494 $26,139,247 City of Thousand Oaks 2025 Wastewater Rate Study

46 5. PROPOSED RATE DEVELOPMENT

5.1 PROPOSED RATE CALCULATION METHODOLOGY
A proposed two-year wastewater rate schedule was developed based on the results of the proposed financial plan and cost-of-service analysis. The key steps in developing the proposed rates were:
 Rate structure evaluation: The existing rate structure was evaluated and proposed changes were considered. Proposed rate structure changes typically intend to address specific policy objectives or maintain alignment with changing industry standards.  Test year rate development: Rates were calculated for the proposed rate structure for the cost-of-service test year (FY 2025/26). Test year rate calculations directly incorporated the final cost-of-service allocations to each customer class and are revenue neutral relative to current rates. Note that test year rates represent intermediate results in the rate design process but are not proposed for implementation.
 Two-year rate schedule development: Proposed rates for the two-year rate-setting period were calculated by increasing the test year rates by the annual revenue adjustment percentages from the proposed financial plan.
 Customer bill impact analysis: Sample bills for each customer class were evaluated to better understand the impacts of the proposed rate changes to customers.

5.2 RATE STRUCTURE EVALUATION
The City’s current wastewater rate structure consists of two fixed charges assessed on a per Service Unit basis. WRE worked with City staff to evaluate the current rate structure and identify potential changes. The most significant challenge with the current wastewater rate structure is that it is administratively burdensome for City staff to maintain up-to-date fixture unit counts for non- residential customers. City staff directed WRE to evaluate potential rate structure changes to address this challenge.

Most wastewater agencies in California have rate structures that include a variable rate per unit of metered water use. However, many of the City’s wastewater customers receive water service from one of two private water utilities rather than the City’s water system. Because it is not practicable for the City to obtain customer water use data from the two private water utilities, the City is not able to charge its wastewater customers based on metered water use. Therefore, the City is constrained to wastewater rate structure options based on fixed charges only.

47 the City maintain its current wastewater rate structure and reevaluate administrative procedures to potentially streamline the fixture unit count determination process.

5.3 TEST YEAR RATE DEVELOPMENT (FY 2025/26)

PROJECTED COST PER ERU
The first step in the test year rate development process was to calculate the annual cost per ERU for each customer class (see Table 5-1). The cost per ERU was calculated by dividing total flow, BOD, and TSS allocations to each customer class (from Table 4-17) by the corresponding number of proposed ERUs (from Table 4-14). Proposed flow/strength adjustment factors were calculated to provide the basis for revised Service Unit definitions in accordance with the updated cost-of-service analysis.

Proposed flow/strength adjustment factors were calculated by dividing the cost per ERU for each customer class by the cost per ERU for single-family residential (i.e., $480.73).

Table 5-1: Proposed Flow/Strength Adjustment Factors
Line Customer Class
Total
Allocation
(excluding
Outside City) # of ERUs
Monthly
Cost per
ERU
Proposed
Flow/Strength
Adjustment
Factor
1 Single-Family Residential $17,558,588 36,525 $480.73 100% 2 Multi-Family Residential $3,043,367 7,913 $384.58 80% 3 General Commercial
(Offices/Retail/All Other) $2,827,164 5,881 $480.73 100% 4 Markets/Mortuaries $116,786 143 $818.13 170%
5 Restaurants/Bakeries $62,625 76 $821.40 171%
6 Restaurants with Grease Trap $380,522 792 $480.73 100% 7 Schools $277,180 902 $307.42 64%
8 Industrial/High Flow $1,771,592 5,899 $300.35 62%
9 Car Washes $101,423 316 $320.58 67%
10 Total $26,139,247 58,446

REVISED SERVICE UNIT COUNTS
The number of revised Service Units in the test year (see Table 5-2) was calculated by multiplying the revised number of ERUs for each customer class (from Table 4-14) by the corresponding proposed flow/strength adjustment factor (from Table 5-1). Separate totals are shown for inside City and outside City customers.

City of Thousand Oaks 2025 Wastewater Rate Study

48 Table 5-2: Number of Revised Service Units
Line Customer Class Inside City
Outside
City Total
1 Number of ERUs
2 Single-Family Residential 34,481 2,044 36,525
3 Multi-Family Residential 7,854 59 7,913
4 General Commercial (Offices/Retail/All Other) 5,868 13 5,881 5 Markets/Mortuaries 143 0 143
6 Restaurants/Bakeries 76 0 76
7 Restaurants with Grease Trap 792 0 792
8 Schools 871 30 902
9 Industrial/High Flow 5,815 84 5,899
10 Car Washes 316 0 316
11 Total 56,216 2,230 58,446
12 13 Number of Revised Service Units
14 Single-Family Residential [100%] 34,481 2,044 36,525 15 Multi-Family Residential [80%] 6,284 47 6,331
16 General Commercial (Offices/Retail/All Other) [100%] 5,868 13 5,881 17 Markets/Mortuaries [170%] 243 0 243
18 Restaurants/Bakeries [171%] 130 0 130
19 Restaurants with Grease Trap [100%] 792 0 792
20 Schools [64%] 557 20 577
21 Industrial/High Flow [62%] 3,633 52 3,685
22 Car Washes [67%] 211 0 211
23 Total 52,199 2,176 54,374

TEST YEAR RATE CALCULATION
Test year rates were calculated based on the final cost-of-service allocations to each cost causation component and the revised number of Service Units (see Table 5-3). The portion of the rate revenue requirement allocated to the flow, BOD, and TSS cost causation components (from Table 4-9) was allocated for recovery by fixed charges. The remaining portion of the rate revenue requirement allocated to the outside City cost causation component (from Table 4-9) was allocated for recovery by outside City surcharges. Test year monthly fixed charges and outside City surcharges (Line 12) were calculated by dividing the total rate revenue requirement allocation (Line 6) by the corresponding number of Service Units (Line 9) and then divided by 12 months per year. The fixed charge calculation incorporated total revised Service Units, while the outside City surcharge calculation incorporated City of Thousand Oaks 2025 Wastewater Rate Study

49 revised outside City Service Units only (per Table 5-2). Note that the test year charge calculations represent an intermediate step in the rate design process and are not proposed for implementation.

Table 5-3: Test Year Rate Calculation
Line Customer Class Fixed Charge
Outside City
Surcharge
1 Cost Causation Component
2 Flow $13,936,260 $0
3 BOD $6,101,494 $0
4 TSS $6,101,494 $0
5 Outside City $0 $17,307
6 Total $26,139,247 $17,307
7 8 Units of Service
9 Number of Service Units 54,374 2,176
10 11 Preliminary Rate Calculation
12 Monthly Charge (per Service Unit) $40.07 $0.67

5.4 PROPOSED RATES

PROPOSED TWO-YEAR WASTEWATER RATE SCHEDULE
Proposed FY 2026/27 and FY 2027/28 monthly wastewater charges per Service Unit (see Table 5-4) were calculated by increasing the test year monthly charges (from Table 5-3) by the proposed 7% annual revenue adjustments (from Table 3-14) and rounding up to the nearest cent. Note that the proposed FY 2026/27 charges per Service Unit increase by more than 7% due to the updated cost-of- service analysis. However, total revenue from rates in FY 2026/27 is still projected to increase by 7% relative to current rates.

Table 5-4: Proposed Wastewater Rate Schedule
Monthly Wastewater Charges Current
Proposed
FY 2026/27
(July 2026)
Proposed
FY 2027/28
(July 2027)
Fixed Charge (per Service Unit) $39.17 $42.88 $45.89
Outside City Surcharge (per Service Unit) $0.55 $0.72 $0.78

REVISED SERVICE UNIT DEFINITIONS
Revised ERU and Service Unit definitions are summarized in Table 5-5 and compared to current definitions in Table 5-6. Proposed ERU definitions are consistent with current definitions, except for City of Thousand Oaks 2025 Wastewater Rate Study

50 industrial/high flow and car washes (for which one ERU was redefined as 150 GPD). Proposed Service Unit definitions were determined by incorporating the proposed flow/strength adjustment factors from Table 5-1. No changes to the current Service Unit determination formula below were proposed:

Table 5-5: Revised ERU and Service Unit Definitions
Customer Class ERU Definition
Flow/Strength
Adjustment Factor
Service Unit
Definition
Single-Family Residential 1 dwelling unit 100% # of ERUs x 100% Multi-Family Residential 1 dwelling unit 80% # of ERUs x 80% General Commercial
(Offices/Retail/All Other) 20 fixture units 100% # of ERUs x 100% Markets/Mortuaries 20 fixture units 170% # of ERUs x 170% Restaurants/Bakeries 20 fixture units 171% # of ERUs x 171% Restaurants with Grease Trap 20 fixture units 100% # of ERUs x 100% Schools 20 fixture units 64% # of ERUs x 64%
Industrial/High Flow 150 GPD 62% # of ERUs x 62%
Car Washes 150 GPD 67% # of ERUs x 67%

Table 5-6: Current vs. Revised ERU & Service Unit Definitions Customer Class
Current ERU
Definition
Proposed ERU
Definition
Current
Flow/Strength
Adjustment
Factor
Proposed
Flow/Strength
Adjustment
Factor
Single-Family Residential 1 dwelling unit 1 dwelling unit 100% 100% Multi-Family Residential 1 dwelling unit 1 dwelling unit 100% 80% General Commercial
(Offices/Retail/All Other) 20 fixture units 20 fixture units 100% 100% Markets/Mortuaries 20 fixture units 20 fixture units 182% 170% Restaurants/Bakeries 20 fixture units 20 fixture units 181% 171% Restaurants with Grease Trap 20 fixture units 20 fixture units 119% 100% Schools 20 fixture units 20 fixture units 53.5% 64%
Industrial/High Flow 180 GPD 150 GPD 67% 62%
Car Washes 180 GPD 150 GPD 71% 67%

REVISED SERVICE UNIT FORMULA FOR UNIQUE FLOW AND STRENGTH CHARACTERISTICS WRE recommends that City staff retain the option to adjust flow and strength assumptions for any customer based on actual loading measurements and/or established engineering practices should the proposed Service Unit definitions shown above be deemed insufficiently accurate (as provided for in the City’s currently adopted wastewater rate ordinance). In this event, WRE recommends that the City of Thousand Oaks 2025 Wastewater Rate Study

51 following formula34 be used to calculate the number of Service Units based on customer-specific flow and strength characteristics:

5.5 BILL IMPACTS

SINGLE-FAMILY RESIDENTIAL BILL IMPACTS
Single-family residential wastewater bills based on current FY 2025/26 and proposed FY 2026/27 rates were compared to evaluate the impacts of the proposed rate changes (see Table 5-7). The bills shown are for inside City single-family residential customers and are equal to the proposed fixed charge for one Service Unit. The bills are shown on both a monthly and annual basis, as single-family residential wastewater charges are recovered by the City on the Ventura County property tax roll.

Table 5-7: Single-Family Residential Bill Impacts (FY 2026/27) Description Current
Proposed
July 2026
Difference
($)
Difference
(%)
Monthly Wastewater Bill $39.17 $42.88 $3.71 9.5%
Annual Wastewater Bill $470.04 $514.56 $44.52 9.5%

AVERAGE MONTHLY BILL IMPACTS BY CUSTOMER CLASS
Average monthly wastewater bills based on current FY 2025/26 and proposed FY 2026/27 rates were compared to evaluate the impacts of the proposed rate changes on each customer class (see Table 5-8). Note that the overall average bill increase across all customer classes is 7% per the proposed FY 2026/27 revenue adjustment. Distributional impacts to various customer classes are due to the updated cost-of-service analysis and revised Service Unit definitions. Bill changes that differ significantly from the 7% average increase are noted below:
 Multi-family residential bills decrease due to the proposed reduction in the multi-family residential flow factor from 100% to 80% of single-family residential flow on a per dwelling unit basis.
 Monthly bills for schools increase due to the proposed increase in assumed strength concentrations for schools.
 Monthly bills for industrial/high flow and car washes increase due to the proposed reduction in the ERU definition from 180 GPD to 150 GPD.

34 The formula shown is intended to normalize to one Service Unit (i.e., the assumed flow and strength of one single- family residence). The percentages in the formula reflect the proportion of the rate revenue requirement (excluding outside City) allocated to the flow, BOD, and TSS cost causation components (per Table 4-9).

City of Thousand Oaks 2025 Wastewater Rate Study

52 All three changes outlined above were deemed necessary to comply with cost-of-service principles and ensure that all customers were allocated costs in a fair and consistent manner.

Table 5-8: Average Customer Bill Impacts (FY 2026/27)
Customer Class
# of
Accounts
Average
Monthly Bill
(Current)
Average
Monthly Bill
(Proposed
July 2026)
Difference
($)
Difference
(%)
Single-Family Residential 36,525 $39.17 $42.88 $3.71 9.5% Multi-Family Residential 573 $541.02 $473.82 ($67.20) -12.4% General Commercial
(Offices/Retail/All Other) 1,347 $171.02 $187.22 $16.20 9.5% Markets/Mortuaries 19 $535.60 $548.27 $12.67 2.4%
Restaurants/Bakeries 49 $110.31 $114.00 $3.69 3.3%
Restaurants with Grease Trap 215 $171.61 $157.87 ($13.74) -8.0% Schools 45 $420.07 $549.73 $129.66 30.9%
Industrial/High Flow 6 $21,472.35 $26,343.37 $4,871.02 22.7% Car Washes 4 $1,830.35 $2,261.69 $431.34 23.6%
Total 38,783 $56.20 $60.16 $3.96 7.0%
City of Thousand Oaks 2025 Wastewater Rate Study

53 6. WASTEWATER CONNECTION FEE UPDATE

6.1 WASTEWATER CONNECTION FEE UPDATE OVERVIEW

CONNECTION FEE OVERVIEW
New connections to the City’s wastewater system are subject to wastewater connection 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 wastewater utilities as “capacity fees” or other similar terms. The City’s currently adopted wastewater connection fee is $11,135 per Service Unit.

Wastewater 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 wastewater connection fee update study in 2020. Since 2020, the City has increased its wastewater connection fees every two years in proportion to changes in the Engineering News-Record’s Construction Cost Index for Los Angeles. The City typically adopts updated wastewater connection fees concurrently with the adoption of each two-year wastewater rate schedule.

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 WASTEWATER 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.

2. Incremental Cost Method: The Incremental Cost Method establishes connection fees based on the cost of planned capital expenses required to expand system capacity and is typically City of Thousand Oaks 2025 Wastewater Rate Study

54 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 Method
35 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 wastewater connection fees were developed using the Buy-in Method. WRE recommends retaining this methodology, as existing wastewater system capacity is expected to be sufficient to accommodate future growth. The key steps in developing updated wastewater 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 wastewater system capital assets but also may include other adjustments, such as for outstanding debt.  Determine the Buy-in Units of Service: The units of service for the buy-in fee calculation are typically consistent with an agency’s wastewater rate structure and are intended to reflect current utilization of system capacity. The City’s wastewater connection fee units of service are therefore based on the current number of Service Units.  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 Service Unit basis.

6.3 PROPOSED WASTEWATER CONNECTION FEES

BUY-IN COST BASIS
Capital Asset Value
City staff provided a detailed registry of all wastewater 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).
36 This asset valuation methodology is consistent with the prior wastewater connection fee update study in 2020. A summary of wastewater system asset value

35 The Hybrid Method is referred to by the AWWA as the “Combined Cost Approach.” 36 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 Wastewater Rate Study

55 is provided in Table 6-1.37 The Wastewater Enterprise currently has no outstanding debt; therefore no adjustments were needed to account for outstanding debt principal.

Table 6-1: Value of Wastewater System Assets
Wastewater System Assets Original Cost Replacement Cost Buildings $24,938,121 $57,929,206
Equipment $7,067,447 $23,246,055
Improvements other than Buildings $211,156,240 $545,153,610 Intangibles $88,065 $138,098
Land $1,463,180 $3,216,055
Works-in-Progress $1,419,937 $1,504,450
Total $246,132,991 $631,187,475

BUY-IN UNITS OF SERVICE
The buy-in units of service are equal to the total proposed number of Service Units based on the revised Service Unit definitions provided in Table 5-5. This is necessary to ensure that the proposed wastewater connection fee charge basis is consistent with the proposed monthly wastewater charge basis.

PROPOSED FEE CALCULATION
The proposed buy-in fee per Service Unit (see Table 6-2) was calculated by dividing the buy-in cost basis (equal to the replacement cost of wastewater system assets from Table 6-1) by the current number of Service Units per the revised Service Unit definitions (from Table 5-2).

Table 6-2: Proposed Wastewater Connection Fee Calculation per Service Unit Description
Water System Equity
Value of Wastewater System Assets $631,187,475
Less Outstanding Debt Principal $0
Total $631,187,475

Units of Service
Service Units 54,374

Proposed Connection Fee
Proposed Fee per Service Unit $11,608

37 Asset values presented in Table 6-1 are consistent with asset values used to allocate capital costs in the cost -of-service analysis in Table 4-3.

City of Thousand Oaks 2025 Wastewater Rate Study

56 COMPARISON OF CURRENT AND PROPOSED FEES
Current and proposed wastewater connection fees are shown below in Table 6-3. Proposed fees are approximately 4% higher than current fees. WRE recommends that the City continue to adjust its wastewater connection fees every two years in proportion to changes in the Engineering-News Record’s Construction Cost Index for Los Angeles. WRE also recommends that all Service Unit determinations for the purposes of assessing wastewater connection fees are consistent with the revised Service Unit determinations for monthly wastewater charges (from Table 5-5).

Table 6-3: Proposed Wastewater Connection Fees
Wastewater Connection Fees Current
Proposed Connection Fee per Service Unit $11,608
Current Connection Fee per Service Unit $11,135
Difference ($) $473

City of Thousand Oaks 2025 Wastewater Rate Study

57 7. APPENDICES

7.1 APPENDIX A: DETAILED O&M EXPENSE PROJECTIONS

Table 7-1: Detailed O&M Expense Projections
Line O&M Expenses
Inflationary
Category
Fixed/
Variable
FY 2025/26
Budget
FY 2026/27
Budget
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
1 ADMINISTRATION
2 Salaries & Benefits
3 Salaries Salaries/Benefits Fixed $257,596 $265,532 $276,153 $287,199 $298,687 4 Benefits Salaries/Benefits Fixed $127,757 $132,746 $138,056 $143,578 $149,321 5 Subtotal - Salaries & Benefits $385,353 $398,278 $414,209 $430,777 $448,009 6 7 Maintenance & Operations
8 Cost Allocation General Fixed $2,967,849 $3,116,241 $3,194,147 $3,274,001 $3,355,851 9 Professional/Contractual Services General Fixed $241,156 $225,315 $230,948 $236,722 $242,640 10 Supplies & Equipment General Fixed $5,755 $7,255 $7,436 $7,622 $7,813 11 Insurance and Claims General Fixed $651,923 $814,904 $835,277 $856,159 $877,562 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 $1,576 $1,576 $1,615 $1,656 $1,697 16 Subtotal - Maintenance & Operations $3,888,629 $4,181,151 $4,285,680 $4,392,822 $4,502,642 17 18 SUBTOTAL - ADMINISTRATION $4,273,982 $4,579,429 $4,699,889 $4,823,599 $4,950,651 19 20 CAPITAL/ DEVELOPMENT ENGINEERING SERVICES
21 Salaries & Benefits
22 Salaries Salaries/Benefits Fixed $1,358,016 $1,404,353 $1,460,527 $1,518,948 $1,579,706 23 Benefits Salaries/Benefits Fixed $738,226 $759,690 $790,078 $821,681 $854,548 24 Subtotal - Salaries & Benefits $2,096,242 $2,164,043 $2,250,605 $2,340,629 $2,434,254 City of Thousand Oaks 2025 Wastewater Rate Study

58 Line O&M Expenses
Inflationary
Category
Fixed/
Variable
FY 2025/26
Budget
FY 2026/27
Budget
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
25 26 Maintenance & Operations
27 Professional/Contractual Services General Fixed $172,600 $72,600 $74,415 $76,275 $78,182 28 Supplies & Equipment General Fixed $4,000 $9,000 $9,225 $9,456 $9,692 29 Utilities General Fixed $1,300 $1,300 $1,333 $1,366 $1,400 30 Intangibles General Fixed $1,600 $1,600 $1,640 $1,681 $1,723 31 Asset Replacement Funding Construction Fixed $12,950 $12,950 $13,339 $13,739 $14,151 32 Training & Memberships General Fixed $6,150 $6,150 $6,304 $6,461 $6,623 33 Subtotal - Maintenance & Operations $198,600 $103,600 $106,255 $108,978 $111,771 34 35 SUBTOTAL - CAPITAL/ DEVELOPMENT ENGINEERING SERVICES $2,294,842 $2,267,643 $2,356,859 $2,449,607 $2,546,025 36 37 HILL CANYON TREATMENT PLANT
38 Salaries & Benefits
39 Salaries Salaries/Benefits Fixed $3,342,175 $3,481,032 $3,620,273 $3,765,084 $3,915,688 40 Benefits Salaries/Benefits Fixed $1,752,509 $1,842,176 $1,915,863 $1,992,498 $2,072,197 41 Subtotal - Salaries & Benefits $5,094,684 $5,323,208 $5,536,136 $5,757,582 $5,987,885 42 43 Maintenance & Operations
44 Professional/Contractual Services General Fixed $1,521,300 $1,509,750 $1,547,494 $1,586,181 $1,625,836 45 Supplies & Equipment - Chemical
Supplies Chemicals Variable $2,200,000 $2,400,000 $2,481,268 $2,565,308 $2,652,215 46 Supplies & Equipment - All Other General Fixed $659,200 $654,200 $670,555 $687,319 $704,502 47 Utilities - Electricity Electricity Variable $1,000,000 $900,000 $930,475 $961,990 $994,581 48 Utilities - All Other General Fixed $201,600 $201,600 $206,640 $211,806 $217,101 49 Repairs & Maintenance General Fixed $542,539 $556,312 $570,220 $584,475 $599,087 50 Intangibles General Fixed $37,150 $26,050 $26,701 $27,369 $28,053 51 Asset Replacement Funding Construction Fixed $161,350 $225,950 $232,729 $239,710 $246,902 52 Training & Memberships General Fixed $55,700 $55,700 $57,093 $58,520 $59,983 53 Equipment/Building Rental General Fixed $41,299 $40,799 $41,819 $42,864 $43,936 54 Subtotal - Maintenance & Operations $6,420,138 $6,570,361 $6,764,993 $6,965,543 $7,172,195 55 City of Thousand Oaks 2025 Wastewater Rate Study

59 Line O&M Expenses
Inflationary
Category
Fixed/
Variable
FY 2025/26
Budget
FY 2026/27
Budget
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
56 Capital Outlay
57 Capital Outlay Construction Fixed $196,049 $132,285 $136,254 $140,341 $144,551 58 Subtotal - Capital Outlay $196,049 $132,285 $136,254 $140,341 $144,551 59 60 SUBTOTAL - HILL CANYON TREATMENT PLANT $11,710,871 $12,025,854 $12,437,383 $12,863,466 $13,304,631 61 62 INDUSTRIAL WASTE INSPECTION
63 Salaries & Benefits
64 Salaries Salaries/Benefits Fixed $239,176 $246,513 $256,374 $266,628 $277,294 65 Benefits Salaries/Benefits Fixed $133,459 $139,089 $144,653 $150,439 $156,456 66 Subtotal - Salaries & Benefits $372,635 $385,602 $401,026 $417,067 $433,750 67 68 Maintenance & Operations
69 Professional/Contractual Services General Fixed $48,700 $48,700 $49,918 $51,165 $52,445 70 Supplies & Equipment General Fixed $37,300 $37,300 $38,233 $39,188 $40,168 71 Utilities General Fixed $700 $700 $718 $735 $754 72 Intangibles General Fixed $21,239 $21,905 $22,453 $23,014 $23,589 73 Asset Replacement Funding Construction Fixed $11,700 $11,700 $12,051 $12,413 $12,785 74 Training & Memberships General Fixed $6,000 $6,000 $6,150 $6,304 $6,461 75 Subtotal - Maintenance & Operations $125,639 $126,305 $129,521 $132,819 $136,202 76 77 SUBTOTAL - INDUSTRIAL WASTE INSPECTION $498,274 $511,907 $530,547 $549,887 $569,952 78 79 MUNICIPAL SERVICE CENTER
80 Salaries & Benefits
81 Salaries Salaries/Benefits Fixed $276,087 $286,769 $298,240 $310,169 $322,576 82 Benefits Salaries/Benefits Fixed $159,633 $167,136 $173,821 $180,774 $188,005 83 Subtotal - Salaries & Benefits $435,720 $453,905 $472,061 $490,944 $510,581 84 85 Maintenance & Operations
86 Professional/Contractual Services General Fixed $44,590 $45,900 $47,048 $48,224 $49,429 87 Supplies & Equipment General Fixed $19,375 $19,375 $19,859 $20,356 $20,865 City of Thousand Oaks 2025 Wastewater Rate Study

60 Line O&M Expenses
Inflationary
Category
Fixed/
Variable
FY 2025/26
Budget
FY 2026/27
Budget
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
88 Utilities General Fixed $14,460 $14,460 $14,822 $15,192 $15,572 89 Repairs & Maintenance General Fixed $225,831 $231,313 $237,096 $243,023 $249,099 90 Intangibles General Fixed $180 $180 $185 $189 $194 91 Asset Replacement Funding Construction Fixed $3,750 $3,750 $3,863 $3,978 $4,098 92 Training & Memberships General Fixed $2,790 $2,790 $2,860 $2,931 $3,005 93 Equipment/Building Rental General Fixed $4,124 $4,124 $4,227 $4,333 $4,441 94 Subtotal - Maintenance & Operations $315,100 $321,892 $329,958 $338,226 $346,702 95 96 SUBTOTAL - MUNICIPAL SERVICE CENTER $750,820 $775,797 $802,019 $829,170 $857,283 97 98 WASTEWATER LINES
99 Salaries & Benefits
100 Salaries Salaries/Benefits Fixed $1,202,096 $1,239,462 $1,289,040 $1,340,602 $1,394,226 101 Benefits Salaries/Benefits Fixed $700,826 $738,211 $767,739 $798,449 $830,387 102 Subtotal - Salaries & Benefits $1,902,922 $1,977,673 $2,056,780 $2,139,051 $2,224,613 103
104 Maintenance & Operations
105 Professional/Contractual Services General Fixed $454,800 $547,600 $561,290 $575,322 $589,705 106 Supplies & Equipment General Fixed $373,800 $373,600 $382,940 $392,514 $402,326 107 Utilities General Variable $120,500 $126,000 $129,634 $133,374 $137,223 108 Repairs & Maintenance General Fixed $29,700 $28,500 $29,213 $29,943 $30,691 109 Intangibles General Fixed $2,300 $2,300 $2,358 $2,416 $2,477 110 Asset Replacement Funding Construction Fixed $281,200 $433,400 $446,402 $459,794 $473,588 111 Training & Memberships General Fixed $18,300 $16,500 $16,913 $17,335 $17,769 112 Equipment/Building Rental General Fixed $6,000 $6,000 $6,150 $6,304 $6,461 113 Subtotal - Maintenance & Operations $1,286,600 $1,533,900 $1,574,899 $1,617,002 $1,660,241 114
115 Capital Outlay
116 Capital Outlay Construction Fixed $416,837 $60,189 $61,995 $63,855 $65,770 117 Subtotal - Capital Outlay $416,837 $60,189 $61,995 $63,855 $65,770 118
119 SUBTOTAL - WASTEWATER LINES $3,606,359 $3,571,762 $3,693,673 $3,819,908 $3,950,624 City of Thousand Oaks 2025 Wastewater Rate Study

61 Line O&M Expenses
Inflationary
Category
Fixed/
Variable
FY 2025/26
Budget
FY 2026/27
Budget
FY 2027/28
Projected
FY 2028/29
Projected
FY 2029/30
Projected
120
121 WASTEWATER CAPITAL PROGRAM
122 Maintenance & Operations
123 Professional/Contractual Services General Fixed $0 $750,000 $768,750 $787,969 $807,668 124 Asset Replacement Funding Construction Fixed $481,650 $481,650 $496,100 $510,982 $526,312 125 Subtotal - Maintenance & Operations $481,650 $1,231,650 $1,264,850 $1,298,951 $1,333,980 126
127 SUBTOTAL - WASTEWATER CAPITAL PROGRAM $481,650 $1,231,650 $1,264,850 $1,298,951 $1,333,980 128
129 TOTAL - O&M EXPENSES $23,616,798 $24,964,042 $25,785,220 $26,634,587 $27,513,146 130 % Change 5.7% 3.3% 3.3% 3.3%

Appendix A Notes:
 Variable expenses were increased by an additional 0.4% per year (after adjusting for inflation) beginning in FY 2027/28 in proportion to the annual change in Service Units.

City of Thousand Oaks 2025 Wastewater Rate Study

62 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) 621 One $0 $125,000 $0 $0 $0 2 HCTP Lab Flooring & Neutralization Tank
(CI5776) 621 One $0 $230,000 $0 $0 $0
3 MSC Warehouse New Lobby and Office
Reconfiguration (CI5781) 621 One $95,000 $0 $0 $0 $0 4 HCTP Window Unit Replacements for
Electrical Rooms (CI5782) 621 Two $110,400 $0 $0 $0 $0 5 Municipal Service Center Roofing and Soffit
Repairs (MI2672) 621 Two $0 $37,750 $0 $0 $0
6 MSC Hard Lid Installation at Office and
Storage Spaces (MI2673) 621 Two $0 $0 $87,500 $0 $0 7 Hill Canyon Treatment Plant Administration
Building Foundation Settling Remediation
(MI2675)
621 One $423,600 $0 $0 $0 $0
8 MSC Building C Office Reconfiguration
(MI2676) 621 Three $0 $0 $56,800 $0 $0
9 Municipal Service Center Parking Lot
Repaving (CI5459) 624 Three $0 $0 $375,000 $0 $0
10 City/County Emergency Communications
Network (CI5549) 624 Two $0 $25,000 $0 $0 $0
11 Municipal Service Center Microgrid and
Backup Power (CI5585) 624 Two $300,000 $0 $0 $0 $0
12 Hill Canyon Treatment Plant Mechanical
System Upgrades (CI5647) 624 Two $2,285,000 $0 $0 $0 $0 13 Municipal Service Center Storm Water
Quality Improvements (CI5661) 624 One $390,000 $0 $0 $0 $0 City of Thousand Oaks 2025 Wastewater Rate Study

63 Line CIP Project Description Fund Priority FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 14 MSC Security Upgrades (CI5696) 624 One $86,982 $0 $0 $0 $0 15 Electric Vehicle Charging at Hill Canyon
Treatment Plant (CI5709) 624 Three $400,000 $0 $0 $0 $0 16 MSC Fleet Electric Vehicle Charging (CI5710) 624 Three $447,600 $0 $0 $0 $0 17 Solar Canopy Expansion at the Municipal
Service Center (CI5718) 624 Three $0 $0 $0 $500,000 $0 18 HCTP Cogeneration Building Fire Suppression
System (CI5759) 624 One $602,225 $0 $0 $0 $0
19 Hill Canyon Treatment Plant and Water
Facilities Pavement Preservation (MI2626) 624 Three $250,000 $0 $0 $0 $0 20 Bus and Car Wash at Municipal Service
Center (CI5468) 624 Two $110,000 $0 $0 $0 $0
21 HCTP Facility Stormwater Diversion (CI5427) 624 One $2,457,125 $0 $0 $0 $0 22 Municipal Service Center/Hill Canyon
Treatment Plant Access Road (CI5437) 624 Three $0 $0 $0 $1,500,000 $0 23 Unit W Improvements (CI5445) 624 Two $4,714,590 $0 $0 $0 $0 24 Wastewater Pipe and Maintenance Hole
Relining FY 2025-27 (CI5532) 624 Two $1,500,000 $1,500,000 $0 $0 $0 25 Cogeneration Facility Upgrade (CI5613) 624 Three $1,500,000 $0 $0 $0 $0 26 Flow Equalization Basin (FEB) Mechanical
Mixing Improvements (CI5617) 624 Two $350,000 $450,000 $0 $0 $0 27 Electrical Classification & Compliance
Upgrades (CI5622) 624 Two $2,950,000 $0 $0 $0 $0
28 Solar Plant Upgrade and Optimization
(CI5625) 624 Two $0 $500,000 $3,000,000 $0 $0
29 In-Plant Variable Frequency Drives (VFDs)
Replacements (CI5629) 624 Two $0 $500,000 $0 $0 $0
30 In-Plant Motor Control Center (MCC)
Upgrades (CI5630) 624 One $1,036,000 $0 $0 $0 $0
31 HCTP In-Plant Meter Replacement (CI5634) 624 Two $689,000 $0 $0 $0 $0 City of Thousand Oaks 2025 Wastewater Rate Study

64 Line CIP Project Description Fund Priority FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 32 In-Plant Pump Replacements; South RAS
Pumps (CI5636) 624 One $0 $800,000 $0 $0 $0
33 In-Plant Valve Installation (CI5637) 624 Two $989,000 $0 $0 $0 $0 34 Permeate Treatment Upgrades (CI5638) 624 Two $0 $843,000 $0 $0 $0 35 Secondary Process Sensors (CI5639) 624 Two $315,000 $0 $0 $0 $0 36 Unit W - Pipe and Maintenance Hole Lining
Project Phase II (CI5641) 624 Two $0 $225,000 $6,500,000 $0 $0 37 Wastewater Collection System Master Plan
Implementation Project Phase I (CI5680) 624 Two $400,000 $2,600,000 $0 $0 $0 38 Unit W Improvements - Phase II (CI5681) 624 Two $0 $400,000 $3,100,000 $0 $0 39 Biosolids Conveying and Storage
Improvements (CI5683) 624 Three $1,395,000 $0 $0 $0 $0 40 Unit W Box Canyon Maintenance Hole
Addition (CI5684) 624 Two $1,153,000 $0 $0 $0 $0
41 Thousand Oaks Blvd Wastewater Pipe and
Maintenance Hole Lining (CI5686) 624 Two $570,552 $0 $0 $0 $0 42 Wastewater Collections System Master Plan
Implementation Projects Phase II (CI5687) 624 Two $0 $0 $3,000,000 $300,000 $2,200,000 43 Hill Canyon Treatment Plant Slope
Stabilization (CI5736) 624 Two $2,595,000 $0 $0 $0 $0 44 Collections Square Maintenance Hole
Upgrades Phase II (CI5786) 624 Two $230,000 $0 $0 $0 $0 45 Lynn Road Wastewater Pipe Lining (CI5787) 624 Two $150,000 $850,000 $0 $0 $0 46 Wastewater Pipe and Maintenance Hole
Relining FY 2027-30 (CI5794) 624 Two $0 $0 $1,500,000 $1,500,000 $1,500,000 47 Conejo Creek Streambed Stabilization and
Habitat Restoration (CI5822) 624 Two $0 $200,000 $1,800,000 $0 $0 48 Unit W and Unit Y Creek Crossings
Improvement Project (CI5823) 624 One $0 $0 $275,000 $1,325,000 $0 49 Lateral Inspections and Upgrades Unit W
(MI2586) 624 Two $713,000 $0 $0 $0 $0
City of Thousand Oaks 2025 Wastewater Rate Study

65 Line CIP Project Description Fund Priority FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 50 Collections Master Plan Update (MI2589) 624 Two $450,000 $0 $0 $0 $0 51 Hill Canyon Treatment Plant Tertiary Filters
Rehabilitation (MI2590) 624 Two $6,726,800 $0 $0 $0 $0 52 South Plant Rehabilitation (MI2591) 624 Two $0 $0 $325,000 $4,675,000 $0 53 HCTP On-Site Power Generation Upgrades
(MI2624) 624 Two $0 $0 $0 $120,000 $0
54 HCTP In-Plant Piping Assessment (MI2642) 624 Two $0 $0 $0 $550,000 $0 55 HCTP Water Resources Project (MI2643) 624 Two $200,000 $0 $0 $0 $0 56 Wastewater Collections Miscellaneous
Repairs FY 2025-27 (MI2644) 624 One $400,000 $400,000 $0 $0 $0 57 HCTP Miscellaneous Repairs FY 2025-27
(MI2646) 624 Two $500,000 $500,000 $0 $0 $0
58 Hill Canyon Treatment Plant GIS
Implementation (MI2650) 624 Three $0 $750,000 $0 $0 $0 59 Maintenance Hole Rehabilitation Project FY
2025-27 (MI2671) 624 Two $200,000 $0 $0 $0 $0
60 HCTP Miscellaneous Repairs FY 2027-30
(MI2683) 624 Two $0 $0 $400,000 $400,000 $400,000
61 Wastewater Collections Miscellaneous
Repairs FY 2027-30 (MI2686) 624 Two $0 $0 $400,000 $400,000 $400,000 62 Maintenance Hole Rehabilitation Project FY
2027-30 (MI2688) 624 Two $0 $0 $200,000 $0 $200,000 63 Total $37,684,874 $10,935,750 $21,019,300 $11,270,000 $4,700,000

Appendix B Notes:
 FY 2025/26 CIP totals include carryover.

Thousand Oaks City CouncilSeptember 9, 2025

Thousand Oaks City Council
September 9, 2025