Low-interest 'Obamabonds' will finance $35 million project

 West Kern Water District directors took another step last week toward a $35 million water-banking project designed to ensure adequate future supplies.

The board adopted a resolution certifying the final environmental impact report that included adopting a mitigation monitoring and reporting program and overriding considerations on air quality concerns.

Consultant Tom Barnes presented an overview of the final environmental impact report, which responded to concerns over air quality and impact to five farming operations in the area surrounding the 480-acre project site just north of the district’s existing well field near Tupman.

The goal of the project is to recover 12,700 acre-feet of water per year of previously banked West Kern water allocations.

The project calls for new wells, recharge basins and discharge basins.

The board held a public hearing on the proposal.  There were no negative comments although Mark Lambooy of Dick Dykstra Dairies expressed concern over the level he would have to draw down his own water wells.

He initially thought his wells faced a 15-foot per year drawdown, but Barnes said the scaled back proposal will require a maximum of 10 feet per year, which seemed to satisfy Lambooy.

The project calls for:

Acquiring 480 acres of land Constructing new wells in phases with the capacity to recover up to 12,700 acre-feet of water per year Constructing recharge basins by excavating and contouring soils to form below-grade ponds surrounded by earthen dams Building a pipeline link from the new facilities to the district’s existing well field and Pump Station A

The project has two phases – recovery and recharge.

The district hopes to recover up to 100,000 acre-feet of water previously banked by the Buena Vista Water Storage District in addition to newly recharged water.

The initial phase of recharge capacity is estimated at 6,200 acre-feet per year. BVWSD recharges 6,500 acre-feet per year for West Kern.

During construction, West Kern must take steps to mitigate temporary construction-related dust.
The district contends dust created during construction is overridden by the benefits of the project – increased reliability and flexibility of a water supply, improved access to banked water, and increased system capacity to meet future demands.

The project will be financed with certificates of participation, taking advantage of low interest rates through a new government program known as Build America Bonds.

Some call the program “Obamabonds.”

Michael Engelbrecht of Wells Fargo Institutional Securities gave the board an overview of the program.

“It’s a great opportunity to lock in a lower cost for funds,” he said.  “Interest rates today are exceedingly low.  The timing for the district couldn’t be better.  And, there is no additional government oversight.”

Under the program, Engelbrecht said, “the district will sell taxable municipal bonds.  The cost to issue is 4.65 percent because the government pays part of that.”

The board will take action on the financing plan at its April 27 meeting.