Residents of a rural El Dorado County community seeking replacement of a 30-year-old water tank took heart Monday when the El Dorado Irrigation District board approved funding to design the project.
But the bond market will determine whether the new tank, needed to ensure adequate flows for fire hydrants in the 124-home Rancho del Sol subdivision near Camino, is built in the coming year.
The board authorized the sale of $133 million in fixed-rate bonds to fund a portion of the nearly $389 million worth of capital improvement projects proposed through 2012. Finance director Mark Price said the bonds likely will be issued in two installments, the first in January and the second in late 2009.
"We're going to sit on the sidelines and see what size of debt we want to issue based on market conditions and decide the best time to weigh in," he said.
The district serves about 100,000 customers in western El Dorado County.
The bond issue is needed to pay for major ongoing projects, such as expansion of water and wastewater treatment plants in El Dorado Hills, as well as smaller projects like the Rancho del Sol water tank.
General Manager Tom Gallier said the El Dorado Hills Water Treatment Plant expansion could be postponed if there were a significant slowdown in growth. Housing construction has declined, "but a lot of commercial projects are still coming out of the ground," he said.
In addition to the credit crunch, the district also faces uncertainties about revenue from connection fees and worries that the Legislature might withhold the district's share of property tax revenues to solve state budget problems.
Dave Houston of Citigroup, the district's bond underwriting firm, said the water agency is in a better position than the state, "which had to do a bond issue to keep the doors open. You're doing it to keep construction on track, but you don't need it right away."
Call The Bee's Cathy Locke, (916) 608-7451.
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