Sitting as the Ceres Financing Authority, members of the Ceres City Council last week unanimously approved the sale of $22 million in bonds to finance the surface water project as an interim measure.
The cities of Ceres and Turlock have formed a joint powers authority, called the Stanislaus Regional Water Authority (SRWA), with the Turlock Irrigation District to build and run a plant to siphon water out of the Tuolumne River, filter it and pipe it to homes. The water will be stored in a large above ground tank at Ceres River Bluff Regional Park and comingled with groundwater.
The design-build contract awarded to CH2M Hill costs $195.4 million with total costs expected to reach $285 million. Each city’s share of the plant’s cost will be based on how much water is being used. Turlock will receive 10 million gallons of water per day and Ceres will receive 5 million gallons per day. The Ceres City Council approved a five-year series of rate increases on water service to help pay off Ceres’ share of $89 million.
The cities will be borrowing the money to pay their share from the State Revolving Fund at a low interest rate. That funding is not expected to be approved until sometime later this year and may not be available to use until after the first of the year . Because the bills are rolling in, the cities need stop-gap funding. Hence, the city will be issuing tax-exempt obligations to fund a portion of the SRWA Water Supply Project.
The finance cost of borrowing the $20,784,550 will be $305,450 which includes the costs of issuance and the underwriter’s discount. Doug Anderson of Urban Futures said that once the state financing kicks in, the short-term issue will be paid with the exception of interest and issuance cost.
The city of Turlock is engaged in similar funding.