Fresno City Hall and its big water project are returning to their favorite lender — the state of California.
The City Council on Thursday told its staff to apply to Sacramento for nearly $165 million in low-interest loans for water-system upgrades.
Success could mean a cut in the residential monthly bill of $3 or more on top of a rate cut already secured.
“We need good news like this as often as we can get it,” Council Member Paul Caprioglio said.
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The vote was 7-0.
City Hall is asking for three loans:
• $63,100,000 to put pipes throughout the city.
• $26,520,000 for pipes to deliver river water to the northeast surface water treatment plant.
• $75,165,000 for pipes to deliver river water to the southeast surface water treatment plant.
City officials said the state loans would carry interest rates in the 2% range. They said borrowing the same money in the bond market would mean rates of 5% or more.
Lower interest rates could produce savings over the course of a 30-year project of $110 million, city officials said. Every penny, they added, would be used to reduce rates.
City officials said it could be months before they know Sacramento’s answer. They said they wouldn’t take the time and effort to apply if they were short of optimism.
The council’s action is the latest step in a growing partnership with state water officials.
The affection got off to a slow start in mid-2013 when Mayor Ashley Swearengin pitched a $400 million-plus project designed to guarantee plentiful water for Fresno for the rest of the century. Construction of a new surface water treatment plant in the southeast was the project’s centerpiece.
The state promised to help to the tune of a $50 million low-interest loan. The bill for most of the project would be paid with higher-interest Wall Street bonds.
Things then went haywire on a number of fronts. The project’s bite on ratepayers, who would see much of their monthly check go to bondholders, was the big sticking point. The monthly water bill for the typical house was expected to jump in annual steps from about $25 to about $50 after five years.
Fast forward to January 2015. Swearengin, pressured by the unrelenting and effective protests of former Fresno County Supervisor Doug Vagim, had rewritten her idea. The particulars were pretty much the same. The cost was $429 million. There was a $1 million annual assistance program for low-income consumers. That typical house’s monthly bill after five years was expected to be about $52.
That’s when Council Member Steve Brandau held a news conference at downtown’s historic Water Tower. Brandau said he wouldn’t vote on any water proposal until city officials teamed with local state legislators in a final search for rate-reducing help.
Brandau is just one of seven votes on the dais. At the time, however, it was thought he could be the deal-breaker on a divided council.
Assembly Member Henry T. Perea, himself a former council member, was among the state lawmakers to take special interest in Brandau’s challenge. Swearengin jumped into the quest with enthusiasm.
Events proceeded at rocket speed. City officials soon announced that the state had approved Fresno for more low-interest loans (close to $150 million) on top of the original $50 million. The savings over 30 years were pegged at nearly $105 million. That typical house’s monthly bill was now at $49.
Swearengin’s water project, long expected to get a rocky greeting from the council, instead sailed to a 6-1 victory on Feb. 26. State water officials in the final hours made no secret of their support for the mayor’s vision.
Public Utilities Director Thomas Esqueda before the vote said he would see if state coffers had enough low-interest cash to cover the rest of the project’s borrowing needs.
Thursday’s council vote was a promise kept.
The council on Thursday also approved rules for this year’s weed abatement program. The city has more than 4,000 empty lots. Many have tall weeds. Property-owners have until April 15 to clear the weeds.
City officials said the program is a public safety imperative. Weeds are a fire hazard during the hot summer months, they said.
The city will cut the weeds on properties missing the deadline, then send the bill to owners. Such a bill, including a fine, could exceed $1,000.
A new street has been named in honor of the late W. Ray Johnson, a former deputy city manager for Fresno. W. Ray Johnson Way is in west Fresno.