MID refunds 2008 bonds
Long water season ends
Wendy Alexander/Madera Tribune File Photo Irrigation water flows through a canal near Road 23 and Avenue 15 in July. MID’s water season ended earlier this month.
Madera Irrigation District has refunded its 2008 bonds, including its contribution. That should save it nearly a million dollars a year over the remaining life of the bonds, which are to end in 2038.
“We did not alter the end date of the bonds we refunded. We just took advantage of the great interest rate in the market right now,” said MID General Manager Thomas Greci.
MID closed the refunding of its Water Revenue Refunding Bonds, Series 2016, on Thursday.
Refunded bonds are essentially refinanced debt. Prior bonds are called and new ones are issued at a lower interest rate. That rate sets how much of the bond’s total amount MID has to pay investors periodically until the bond matures.
“An annual savings of close to $1 million is significant to the district and our annual budgeting process,” Greci said. “This will allow the district to direct expenditures into projects and programs that will advance the mission of the district without increasing the district’s overall budget.”
The district estimates a net present value savings equal to 26.7 percent of the bond’s principal prior to the refund. About $13.3 million in net cash-flow savings are expected.
“The (MID) Board (of Directors) looked at many options related to the contributions and structure of this refunding,” said MID Board President Carl Janzen. “The board is very pleased with the results.”
Greci said MID’s board and management continue to seek ways to strengthen the district’s position despite local water conditions. “Over the last two years, the district has been able to reduce its outstanding debt by over $34 million through the refunding of the 2011 Bonds in 2015 and the 2008 Bonds in 2016,” he said.
The district’s board won’t see many new faces in the future. Only one board director will be on the ballot this November as the rest have no rival nominated for their seats, according to board secretary Andrea Sandoval. Board president Carl Janzen, Division 5, will run against John Bese, MID chief of operations and maintenance, this fall. Farmers Rick Cosyns, Division 2, and Jim Erickson, Division 4, will be re-appointed to the board in the absence of competition.
MID recently finished its 2016 water distribution season. “We just shut off,” said Greci on Thursday.
About 135,000 acre feet of water was used by the district this season, which started earlier than MID had expected. The season kicked off after the U.S. Bureau of Reclamation decided in March that the Friant reservoir was in danger of spilling over. MID was able to continue deliveries through peak irrigation usage without interruption thanks to gradual increases in water supplies obtained from the bureau and elsewhere.
Madera Irrigation District obtains and manages underground and surface water for local agricultural landowners. For information, visit www.madera-id.org or call 673-3514.