Ventura Water’s $104M debt refinancing to minimize rate hikes for customers
Water will continue to get more and more expensive in Socal. Read this article from the Ventura County Star
The city of Ventura has refinanced most of Ventura Water’s $104 million debt, resulting in nearly $16 million in savings that are expected to lower planned rate hikes for customers, city officials said.
Refinanced was $97.4 million of the debt total, said Michael Coon, the city’s finance and technology director.
The rate on the refinanced debt was lowered from 4.8% to 2.47%, resulting in the $15.95 million savings, he said.
The savings will be passed on to Ventura Water customers in the form of lower rate hikes planned for a five-year period starting fiscal year 2021-22, Coon said.
The tentative first year rate increase is 7% for water service and 6% for wastewater service, he said. Without the refinancing, the tentative first year hike would be about 8% for water service and about 6.75% for wastewater service, he said.https://6f1d5ee1e762169380ea98a3b1e431d5.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html
The tentative rate increases for each subsequent fiscal year through 2025-26 will also be 7% for water service and 6% for wastewater service.
“But by freeing up this roughly $16 million, the rates don’t need to increase as much,” he said.
“So, we’re not going to see a decrease in rates due to the refinancing, but the rate increases will be lower than they would have been without refinancing,” he said.
The proposed VenturaWaterPure Project would divert, treat and re-use water that’s currently discharged into the Santa Clara River Estuary, the city said.
Under the State Water Interconnection Project, the city plans to build a pipeline to enable the direct delivery of water from the California State Water Project.
Combined, the projects would diversify Ventura’s water supply, secure a new, locally-owned water source, improve water quality and meet future water supply needs, according to the city.
The rate increases will go into effect in July if approved by the Ventura City Council in the spring following a required Proposition 218 process, Coon said.Your stories live here.Fuel your hometown passion and plug into the stories that define it.Create Account
Under that process, if a majority of Ventura property owners protest the planned hikes, the increases cannot go through.
“Ventura Water is committed to responsible fiscal stewardship,” said Susan Rungren, Ventura Water’s general manager. “We will continue to pursue funding and financing opportunities that limit financial impacts to our customers.”
Mike Harris covers the cities of Moorpark, Simi Valley, Thousand Oaks and Ventura, as well as transportation countywide. You can contact him at email@example.com or 805-437-0323.