A refinanced loan could give Cambria a lower interest rate on its debt for the Sustainable Water Facility, Dean Florez said at a town hall meeting Wednesday, April 11, in Cambria.
The catch: The community services district would have to take out roughly $4 million in new infrastructure loans in order to get the lower rate on its current $8 million loan.
Worth considering: That $4 million could provide extra money for needed infrastructure repairs.
To be decided: whether the district can afford that and, if so, what infrastructure projects it would pursue. A new standing Finance Committee will be discussing those issues as it meets in the months ahead.
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Dean Florez, the CCSD’s consultant/lobbyist in Sacramento, told about 30 people at the town hall meeting in the Veterans Memorial Building that the state’s IBank could help refinance its current loan. But the bank – officially, the California Infrastructure Development Bank – doesn’t do straight refinance deals, Florez said. It requires that borrowers take out an additional loan for infrastructure projects.
How would that work for Cambria? Florez said the district could lower the interest rate on its water plant loan to 1 or 2 percent if it borrowed an $4 million in addition to the $8 million it already owes.
“They have given 0 percent to several communities,” he said, but added that most of those are disadvantaged communities.
Florez called the district’s current loan, a fixed 20-year financing package with Western Alliance’s TPB Investments, “not a good loan.” The loan, which would be paid off in 2034, carries a 4.11 percent fixed rate. Florez and board President Amanda Rice both said it had been the best deal available at the time, but that the IBank has been receptive to inquiries from the CCSD.
“They are sensitive to the issue,” Rice said. “They would like to help us. It’s just up to us to figure out the process.”
For one thing, the district would have to determine what infrastructure projects might be needed and whether it has the resources to pay for them.
“The community and the board need to figure out what’s financeable,” Florez said, describing it as “an enormous challenge facing the board right now, just determining what some of those capital projects are.”
Despite that challenge, he said, the district can’t afford to delay. With Gov. Jerry Brown leaving office in January, a new administration will be choosing its own appointees and the five-member IBank board will likely be changing.
Also at the town hall meeting, Florez went over some of the bills and financial opportunities he’s following in Sacramento that might affect Cambria. When it comes to water, lawmakers are focusing on desalination and recycling.
Florez said he’s hopeful that the community can receive a share of a water bond that will provide money for small communities (3,000 or fewer connections). Recycled water will be the main focus of that bond. In the past, he said, that money has largely gone to disadvantaged communities such as McFarland in the Central Valley, but he said he’s optimistic that Cambria can qualify for a portion of it this year.
The town hall meeting was organized by CCSD Director Harry Farmer. Florez, a former state Senate majority leader who owns Balance Public Relations, said he was open to returning for additional town hall meetings in the future.
The CCSD Finance Committee, led by Rice and Director David Pierson, will meet from 9 a.m. to noon Thursday, April 26, and at the same time Thursday, May 10, at the Cambria Fire Station, 2850 Burton Drive. Citizen members on the committee of five are Dewayne Lee, Ted Siegler and Cindy Steidel. The public is invited to attend.