FPUD to use long-term reserves pending state reimbursement for CUP

The Fallbrook Public Utility District has a loan arrangement with the state’s Department of Water Resources for the Santa Margarita River Conjunctive Use Project, but DWR has not been prompt with its recent payments and FPUD is currently incurring expenses.

The funding shortfall has been solved temporarily by authorization to use FPUD’s long-term reserves to fund the Conjunctive Use Project expenditures. A 5-0 FPUD board vote April 27 authorized the use of those funds.

“The state won’t pay us that money,” FPUD board member Charley Wolk said. “It seems to be appropriate to use the money they have paid us.”

The Santa Margarita Conjunctive Use Project being pursued by FPUD, U.S. Marine Corps Base Camp Pendleton and the U.S. Bureau of Reclamation will enhance groundwater recharge and recovery capability within the lower Santa Margarita River basin and develop a program which will increase available water supplies for FPUD and Camp Pendleton.

The Camp Pendleton infrastructure will include piping to deliver the water to the boundary of the Naval Weapons Station and Fallbrook behind the FPUD solar facility site on Alturas Road. Construction of the facilities from the NWS boundary is FPUD’s responsibility.

The water will be treated at the Alturas Road plant and delivered into FPUD’s distribution system. FPUD’s costs will include a groundwater treatment plant, a distribution system to the Gheen Zone east of Stage Coach Lane, the Gheen Pump Station and a storage tank with piping and construction management and supervisory control and data acquisition system integration.

The State Water Resources Control Board has a State Revolving Fund loan program which provides water agencies with low-interest loans. In January 2017, FPUD’s board authorized an application for a State Revolving Fund loan from the SWRCB to construct the Santa Margarita River Conjunctive Use Project, and the funding agreement for a loan of $53,334,000 to repaid over 30 years at an interest rate of 1.9% was finalized June 20, 2019.

The loan agreement was finalized before the July 10, 2019, deadline for bids and assumed a $51 million construction cost along with $2,334,000 for construction management and SCADA integration. Filanc Alberici JV had the low bid amount of $54,398,232 and FPUD worked with the State Water Resources Control Board to amend the agreement so that the additional $3.4 million can also be funded by the State Revolving Fund loan.

In January, the SWRCB approved a loan amount of $62,935,885 which includes a contingency of $5,440,000 as well as the construction, design and construction management costs.

As of April 16, the total amount invoiced to FPUD was $11.9 million, but only $5.1 million had been reimbursed by the state.

“It’s taking a long time to get the money from the state,” Bebee said. “That’s leaving us having to carry large payments.”

FPUD had placed $4.2 million of that reimbursement in the district’s long-term reserves fund while utilizing the other $900,000 for operating cash.

The use of funding from the reserves will be tracked and money will be returned to that account once payments from DWR are received.

During the April 27 meeting, Wolk also recommended that Bebee and board president Ken Endter meet personally with state Sen. Brian Jones and state Assemblywoman Marie Waldron to address the DWR delay.

“It’s up to them,” Bebee said of meeting with Jones and Waldron in person. “At least we’re going to get a phone call set up.”

Joe Naiman can be reached [email protected].