Funding

The total program is expected to cost about $65 million. The District’s expects to apply for and receive State, Federal and local grants to meet 50% of the costs.

To finance the initial portion of work, the District plans to sell about $20 million in 30 year revenue bonds. By obtaining bond financing, funds are available immediately but are paid back over thirty years, with both current and future customers sharing the costs fairly.

To pay back the bond, the District is considering asking property owners to vote on a real property assessment. A vote is required by Proposition 218. With a property assessment, the cost to each customer would be based on their property size and potential water demand. The Board anticipates that the average cost for this charge would be about $4 per month. Many property owners will pay that amount or less. Customers who have larger properties and use more water generally pay more, and those who use less water and have smaller properties pay less.. The votes would also be weighted to match the assessment.

One benefit of property assessment revenue is that it provides a revenue stream that may be considered more stable or reliable than normal water charges. An assessment also would allow the District to show a more diversified portfolio of revenues to rating agencies, demonstrating that we don't have "all our eggs in one basket".

Although the potential passage of an assessment does not guarantee that our ratings will be different, the combination of stable assessment revenue and the more diversified portfolio may enhance the bond rating and thus result in a lower interest rate and lower long term costs

The costs and details of the option of paying back the bonds through water charges are being evaluated now. The staff and Board will be evaluating the options of increasing water charges as compared to the assessment option over the next few months. Once a decision is made, the Board will either consider increasing charges or approve the mailing of ballots asking the property owners for a vote regarding that assessment.