Sunday, April 26, 2015
YOLO COUNTY NEWS
99 CENTS

Council asked to issue $30 million in bonds to start paying for surface water project

By
From page A1 | October 08, 2013 |

The City Council will be asked to approve issuing $30 million in bonds Tuesday so the city can begin paying off its share of the Woodland-Davis Clean Water Agency Surface Water Project.

Priced at an estimated $106 million to Davis, the project will pump water from the Sacramento River, treat it at a facility in Woodland and pipe it down to Davis and over to Woodland.

The new supply of drinking water, which largely will replace the city’s long-serving well water system, is expected to be ready by 2016. Several deep wells will remain in operation as a supplemental supply.

The council’s meeting starts at 6:30 p.m. in the Community Chambers of City Hall, 23 Russell Blvd. Watch it live on Comcast Channel 16 and AT&T U-Verse Channel 99; stream it on the city’s website at www.cityofdavis.org/media.

Only $16 million of the $30 million in bond proceeds will go toward future design and construction costs of the project. The city will use some of the cash to pay off $12 million in accrued debt from previous water project costs up to this point.

City Manager Steve Pinkerton said Monday the $12 million that’s already been spent is included in the overall $106 million figure.

Meanwhile, because the city is still fighting a lawsuit that’s challenging the legality of its newly adopted water rates, this initial loan appears to be a measure to keep interest rates down in the short term until the city and the rates are free of litigation.

The council hiked rates in March to begin raising revenue to pay for the city’s share of the project.

The terms of the loan, if approved by the council Tuesday, would carry a variable interest rate starting at about 1.3 percent, far lower than what Pinkerton says the city would pick up with a fixed rate at this time, given the market and given the fact that the city’s water rates are still under legal challenge.

Since the variable rate would provide the city no long-term certainty of debt service payments — under the loan agreement, the lender can raise rates each month — Pinkerton hopes once the lawsuit is resolved in December, the city can refinance with a low-interest fixed loan, preferably using a state revolving fund loan.

“This is to get us to the point where we can get our final financing,” Pinkerton said Monday.

In their report to the council, city staff say the chances of receiving full funding for the project from the state revolving fund are “very likely.” SRF loans, earmarked by the state for water quality projects, traditionally carry extremely low interest rates.

If Davis locked in loans from the SRF program for the remainder of the project, it could save up to $60 million in debt service costs over the next 20 years, Herb Niederberger, general manager of utilities, development and operations for the city, told the council earlier this year.

Residents would not see the savings on their utility bills, however, until after the debt service has been paid off in 20 years, which is the traditional payback period of an SRF loan. Water bills are still expected to triple over the next five years, and continue to rise thereafter, as a result of the rates that were raised to pay off the project.

If the council approves the bonds and the project schedule remains on track, water agency officials say construction of the project would begin in March 2014.

— Reach Tom Sakash at [email protected] or 530-747-8057. Follow him on Twitter at @TomSakash

Comments

comments

Tom Sakash

Tom Sakash covers the city beat for The Davis Enterprise. Reach him at [email protected], (530) 747-8057 or @TomSakash.
  • Recent Posts

  • Enter your email address to subscribe to this newspaper and receive notifications of new articles by email.

  • .

    News

     
     
    Davis team wins world robotics championship

    By Anne Ternus-Bellamy | From Page: A1 | Gallery

    Nepal quake death toll exceeds 1,800

    By The Associated Press | From Page: A2 | Gallery

     
    Spring storm delivers late rain, snow to Northern California

    By The Associated Press | From Page: A2

     
    At the Pond: Plenty of pleasures in our bioregion

    By Jean Jackman | From Page: A3 | Gallery

    Dog park marks anniversary with cleanup

    By Special to The Enterprise | From Page: A4

     
    Rail-safety bill passes Senate committee

    By Special to The Enterprise | From Page: A4

    Free Family Bike Clinic set Sunday

    By Enterprise staff | From Page: A4

     
    Pioneering organic chef presents her memoir Monday

    By Special to The Enterprise | From Page: A4

    Suspect in UCD assault arrested

    By Lauren Keene | From Page: A4

     
    Watch them in action

    By Julia Ann Easley | From Page: A5

    Stocks rise on tech earnings; Nasdaq adds to record

    By The Associated Press | From Page: A8

     
    Dodd speaks as part of public policy series

    By Special to The Enterprise | From Page: A9

    We did it (together)!

    By Enterprise staff | From Page: A10

     
    $2.72 million judgment ordered against Dollar Tree Stores

    By Special to The Enterprise | From Page: A10

    UCD hosts bike auction Saturday, May 2

    By Enterprise staff | From Page: A11 | Gallery

     
    Fly Fishers to hear about advanced streamer tactics on Tuesday

    By Special to The Enterprise | From Page: A11 | Gallery

    Bicycle activist will speak Monday at Hall of Fame

    By Enterprise staff | From Page: A11 | Gallery

     
    .

    Forum

    Those texts still linger

    By Creators Syndicate | From Page: B6

     
    New ways of giving locally and beyond

    By Marion Franck | From Page: B6

     
    Study questions accuracy of tumor gene mapping

    By The Associated Press | From Page: B6

    More work to do for a safe Picnic Day

    By Our View | From Page: A12

     
    Tom Meyer cartoon

    By Debbie Davis | From Page: A12

    Poker proceeds help youths

    By Letters to the Editor | From Page: A12

     
    Invest in water of the future

    By Letters to the Editor | From Page: A12

    Water, water everywhere?

    By Letters to the Editor | From Page: A12

     
    Mayor’s Corner: A spirit of renewal permeates Davis

    By Special to The Enterprise | From Page: A12

     
    Anaheim, where The Force is with you

    By Sebastian Onate | From Page: A13 | Gallery

    .

    Sports

    Davis gets two baseball wins in two days

    By Spencer Ault | From Page: B1

     
    Grizzlies dominate young Blue Devils on Senior Night

    By Thomas Oide | From Page: B1 | Gallery

    Energy, fan-friendly happenings highlight UCD spring football game

    By Bruce Gallaudet | From Page: B1 | Gallery

     
    Blue Devil golfers capture CAL Invitational title

    By Enterprise staff | From Page: B1

    UCD roundup: Aggies reach water polo semifinals

    By Enterprise staff | From Page: B2

     
    Blue Devil swimmers are up to the challenge

    By Enterprise staff | From Page: B2 | Gallery

    DHS softball struggles continue against Sheldon

    By Enterprise staff | From Page: B12 | Gallery

     
    Babich brings the heat as DHS girls stick it to Oak Ridge

    By Enterprise staff | From Page: B12 | Gallery

    .

    Features

    .

    Arts

    History comes alive in ‘The Sacramento Picture’

    By Derrick Bang | From Page: A1 | Gallery

     
    .

    Business

    Big Italian food, sports bar to fill Little Prague

    By Wendy Weitzel | From Page: A7 | Gallery

     
    Yolo County real estate sales

    By Zoe Juanitas | From Page: A7

    Davis Roots hires new general manager

    By Special to The Enterprise | From Page: A8

     
    Comcast announces speed upgrade

    By Special to The Enterprise | From Page: A8

     
    .

    Obituaries

     
    Whitney Joy Engler

    By Special to The Enterprise | From Page: A6

    Valente Forrest Dolcini

    By Special to The Enterprise | From Page: A6

     
    .

    Comics

    Comics: Sunday, April 26, 2015

    By Creator | From Page: B8