In 1995, Rainbow Municipal Water District's board unfortunately conceded to the demands of a few ratepayers and adopted Ordinance 95â"1, which dictates the process governing obtaining loans.
Two board directors and our attorney vehemently opposed this concession at that time and correctly prophesized that 95-1 would severely handicap Rainbow's future ability to conduct business.
As written, Ordinance 95-1 precludes the district from taking advantage of low-interest loans/grants offered by the state and federal governments. It requires Rainbow to obtain voter approval each and every time the district seeks to obtain a loan. Additionally, it requires that these elections be conducted concurrently with primary and general elections.
These requirements handicap the district. First, these elections must be conducted concurrently with primary and general elections. Since none are planned in odd years, Rainbow is prevented from requesting government stimulus money this year while the money is available. Second, 95-1 causes a timing problem. It is impractical and cost-prohibitive to conduct an election to obtain voter approval before each application is submitted, since the notice of opportunity and response dates precludes scheduling/conducting timely elections.
Additionally, these programs require Rainbow to be pre-authorized to seek these loans before applying.
Rainbow is mandated to cover its reservoirs and move its pipelines along Highway 76 because of the road's realignment. These programs will cost about $45 million. Rainbow has about $20 million on hand and needs to raise an additional $25 million to fund these projects.
To minimize the cost to the ratepayer, the district chose to make a single amendment to 95-1 (permitted by 95-1) to enable Rainbow to seek favorable low-interest loans/grants for these projects without the cumbersome burden of conducting a special election each time.
Two directors who originally sponsored 95-1 objected to the August election to amend Ordinance 95-1. They sought to prevent the election (and your right to vote) from occurring by bringing suit in Superior Court: to block the county from conducting the election and to strike portions of the district's arguments in favor of Proposition A and its impartial analysis from appearing on the ballot.
Fortunately, the court ruled in the district's favor in all respects and denied all relief to the petitioners. The judge explained that he found no merit in the petitioners' case.
Therefore, Rainbow's options are to pursue either low-interest government loans/grants (typically at half the market rate or lower) or higher-priced loans in the open market.
What are the savings? Government loans would impact our water rates between 8 cents and 16 cents per unit, depending on grant money received, versus 24 cents per unit for a conventional loan.
And, should Rainbow receive government funds as expected, our current water rates may be adequate to repay these government loans!
This is a no-brainer! Protect your water rates. Vote Yes on Prop. A.
GERALD WALSON is a Rainbow Municipal Water District director and president of the Bonsall Area for a Rural Community.
