The Nipomo Community Services District plans to borrow an additional $4 million to move ahead plans to construct a pipeline to bring water to the community from Santa Maria.
The district board voted unanimously to approve an alternative financing plan for its $17.5 million pipeline project at a special meeting Friday. Board member Bob Blair was absent.
The new plan will allow the district to avoid drawing $4 million from a specific reserve fund — the use of which has been challenged by a group of local residents who filed a lawsuit against the district a week ago.
The first phase of the $17.5 million project would connect a pipeline to Santa Maria’s water system, install it across the Santa Maria River and connect to the community’s water system. Two other phases are planned to increase the pipeline’s capacity.
The district had planned to use $4 million from a reserve fund created to repair and replace “existing capital assets.”
But the Mesa Community Alliance, a self-described group of “unpaid community volunteers from downtown Nipomo, Blacklake, Trilogy, and Cypress Ridge,” filed a civil lawsuit challenging the use of the money.
The group argued the district does not have the discretion to use the money because the reserve fund is specifically intended for “replacement of capital assets.”
District officials countered that use of the money is appropriate because the pipeline will reduce the district’s need to repair and refurbish its wells, and will prolong their use.
In a news release, district officials said the project would need to be delayed if construction contracts aren’t awarded by June 26. The district has a permit from the California Department of Fish and Wildlife to drill under the Santa Maria River, but the work must be done by Oct. 31.
“If we can’t get in and out of the river within the constraints of our Fish and Wildlife permit then we’d have to delay until next year,” LeBrun said.
If the project is delayed, the district may also lose $2.2 million in state grant funds.
“We need to get this project done so we can supplement our groundwater-only supply,” board President Jim Harrison said in a news release.
Meanwhile, Mesa Community Alliance members say the Nipomo district is trying to “resurrect the same project under the guise of a ‘phased’ approach” without approval from ratepayers “who will ultimately be responsible for keeping the district solvent.”
Last May, Nipomo-area property owners rejected a plan to fund construction of a $26 million pipeline by raising property taxes through an assessment district.