How Mesa Water plans to save $8.96 million: Start a pension trust and refinance debt

The Mesa Water District has made a series of monetary maneuvers that officials believe will save the agency about $8.96 million over the next decade.

Those steps include a pension trust to help eliminate the district’s unfunded pension liability, most recently calculated at nearly $6.7 million, according to a news release.

Such a trust is intended for Mesa Water to sock away money that later can be transferred to the California Public Employees’ Retirement System, or CalPERS.

The district will open the pension trust next month with a $1-million contribution, then add $12 million in monthly increments over the following year for a total of $13 million by July 2018, according to district Public Affairs Manager Shannon Widor.

Mesa Water also has refinanced $21.6 million worth of bond debt at an interest rate of 1.635%, compared with the old rate of 4.83%. The refinancing will save Mesa Water about $179,000 per year, Widor said Wednesday.

“Our strong financial performance and AAA credit rating allowed the district to obtain an incredibly low interest rate,” General Manager Paul Shoenberger said in the news release.

As part of the refinancing, the district secured an additional $13 million for its capital improvement program, a five-year plan for water system improvements such as automating water wells, testing and rehabilitating pipelines and replacing and refurbishing other assets, according to the release.

“The district will be able to pay off all of its debt in 10 years,” Widor said.

Mesa Water provides service to about 110,000 people in Costa Mesa, parts of Newport Beach and sections of unincorporated Orange County, including John Wayne Airport.

luke.money@latimes.com

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