The Nipomo Community Services District may borrow additional money to finance construction of a pipeline to bring water to the community from Santa Maria.
The district board will consider an alternative financing plan for its $17.5 million pipeline project at a special meeting Friday. If approved, the district would avoid using money from a specific reserve fund, which has become the focal point of a lawsuit filed by a group of local residents opposed to the pipeline project.
On Wednesday, the district board postponed an action to authorize a bond sale to obtain funding for the project, citing the lawsuit filed last week by the Mesa Community Alliance as the reason for the delay.
In a news release, district officials said the lawsuit prevents the district from selling bonds to finance a portion of the project because investors might be dissuaded or could “drive bond pricing significantly higher resulting in additional cost to the district and its customers."
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.”
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 Mesa Community Alliance, a self-described group of “unpaid community volunteers from downtown Nipomo, Blacklake, Trilogy, and Cypress Ridge,” is challenging the use of $4 million from a specific reserve fund.
In its civil lawsuit, 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 say 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. They say the Santa Maria water is necessary for the Mesa to reduce its dependency on an underground aquifer, the area’s only source of water.
Friday’s special meeting starts at 9 a.m.; for more information go to http://nipomocsd.com.