Port Hueneme Water Agency approves FY27 budget, shifts to higher variable water charges to cover CIP

The Port Hueneme Water Agency unanimously approved its proposed fiscal year 2027 operating and capital improvement budget on June 15, adopting a rate structure that increases the variable water charge while reducing fixed monthly charges for member agencies. The vote came by roll call after a presentation from Chief Financial Officer Ashley Chaparo and questions from board members.

CFO Ashley Chaparo told the board the agency’s costs are tightly tied to its suppliers and that PHWA is passing through supplier changes: “we are very dependent upon the data of our major cost for PHWA, which is water,” and “we are passing through that same methodology with an increase in the variable rate and a decrease in the fix to member agencies.” Chaparo described the FY27 proposal as a side-by-side comparison with prior years showing United and Kyas rate changes feeding through to PHWA’s rates. She said projected water purchases and usage were based on actual FY26 data through April, with only slight changes in projected usage for FY27.

On capital projects, Chaparo explained the agency is not requesting the one-time $1.1 million CIP lump sum again for FY27 because much of that amount was collected in the prior year and remains in fund balance. Instead the budget proposes building $354,000 of a proposed $700,000 CIP into the fixed rate monthly so the agency does not double-bill member agencies for funds already collected. Chaparo said the new CIP money (about $700,000) would be used primarily for a bag-filter replacement and that staff will propose lump-sum requests only for projects exceeding about $1 million in the future.

Board members pressed staff for details on specific line items and potential outside funding. Director Kimaro said the bag-filter project cost appears higher than initially budgeted and that the agency has not yet gone to bid; staff also reported they are pursuing a Defense Infrastructure grant (Defense Community Infrastructure Program) that could offset costs. Kendall, a staff member coordinating grant efforts, said he was "confident that PHWA's project will get selected, which would be a huge offset to operating expenses and budget."

The meeting also resolved a consent-calendar question about a water tank rehabilitation included in consent item three. Staff reported the tank rehabilitation is about 90% complete: "they've done the exterior and interior walls of the tank and what's left is the flooring," and contractors were "expecting to be done by the end of June," with final payments and any change orders to be approved after all work and documentation are complete.

The board approved the FY27 operating and CIP budget and the proposed fixed and variable water rate components by a unanimous roll-call vote. Madame Clerk recorded yes votes from Member Hernandez, Member Leau, Member McQueen Lejon, Vice Chair Lopez and Chair Thomas. The board also approved the consent calendar (including the discussed consent item three) by unanimous vote earlier in the meeting.

The agency staff will proceed with budget implementation and return later with final change orders and any additional contract close-outs related to the tank rehabilitation.