Ramona water district OKs $5.8 million for backup power, to move water main

By Karen Brainard

Ramona Municipal Water District directors have approved funding for two pipeline projects — one for water and one for natural gas.

The board, by a vote of 4-0, with Director Kit Kesinger absent, on May 14 agreed to a private placement financing option to borrow $5 million to relocate the district’s water main on San Vicente Road, as required for the county’s road realignment project set to begin this fall. The financial advisers of Fieldman, Rolapp & Associates considered two primary financing options: tax-exempt bonds publicly sold by RMWD to an investment bank, which would then resell them to the public; or a private placement of debt directly with a financial institution, typically a bank.

The financial advisers recommended the district go with a private placement of debt, saying the debt service would be lower over time. Tom Johnson with the financial firm said the overall debt service to borrow $5 million through private placement would be about $6.4 million as opposed to $7.7 million for public bonds. He also noted that a private placement loan would only take about 45 days — “Well below that Aug. 1 commitment to have the monies on hand for the county,” he said. The public sale would take 90  to 100 days, he added.

Also at the meeting, the directors by a 4-0 vote authorized spending $834,000 to add natural gas as a second power source to the district’s electric-powered Poway Pump Station that delivers water to RMWD’s lines.

When electricity goes out, water cannot be pumped up to Ramona, as in the case of the 2007 wildfires. The concept of adding gas power was brought to the board about 18 months ago.

“The goal of this project has always been to provide redundancy and to be prepared in  emergencies,” said RMWD General Manager David Barnum. “There’s an added benefit — we think there may be some cost savings to our ratepayers in reduced pumping costs in the long-term.”

The total cost to add a gas line and 900 horsepower natural gas engine to the pump station is estimated at $1.9 million. In October 2012, the board approved  initial funding of $100,000 of which $75,000 has been spent on preliminary design, environmental review, easement acquisition and related costs. Of the funding approved by the board on May 14, $184,000 will go toward engineering, environmental and other “soft costs,” and $650,000 for a gas engine and associated equipment.

Director Joe Zenovic, who is on the Poway Pump Station Ad Hoc Committee, said the district has set aside money for the project in its budget and will also use property tax revenues to fund it.

RMWD’s contracted district engineer Mike Metts said they have been working with Blue Sky Reserve, California Department of Fish and Wildlife, the  City of Poway, San Diego County, and the State of California on various aspects of the project, including easements with the latter three agencies. The district is also working with San Diego Gas & Electric, which has a natural gas line that runs down Espola Road and will add the additional line to the pump station.

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