Agency Seeks Financing to Double Santa Clarita Water

The Castaic Lake Water Agency will acquire $132 million in financing Thursday that will enable it to more than double the water supply of the burgeoning Santa Clarita Valley, the agency’s general manager said Tuesday.

The loan “will ensure that the area will continue to have adequate water supplies and not find themselves in the shape communities such as Santa Barbara are in right now,” said Robert C. Sagehorn, the agency’s general manager.

The largest portion of the funds--$58.7 million--will be used to build a plant capable of treating 30 million gallons of water a day from the State Water Project, Sagehorn said.

Along with 25 million gallons of water a day produced by the agency’s present treatment plant in Castaic, that will be enough to supply the valley’s needs for at least the next six years, Sagehorn said.

Sagehorn had predicted that water demand could exceed the supply in the booming area by 1992 without new supplies.

The valley is home to about 150,000 people now, but Los Angeles County planners have predicted that the population will swell to 270,000 by 2010.

“This marks the beginning of a capital program that has been under study and discussion for a long period of time,” Sagehorn said.

The new plant will be built on 160 acres at the 520-acre Saugus Rehabilitation Center, formerly a facility for alcoholics owned by the city of Los Angeles.

The land was awarded to the agency through condemnation proceedings in Los Angeles Superior Court earlier this year after Los Angeles rejected the agency’s $15-million bid to buy the land, Sagehorn said.

The agency will use $15.8 million of the $132 million to pay Los Angeles for the 160 acres.

The agency already is demolishing buildings on the Saugus site and expects to complete the new treatment plant by the fall of 1993, Sagehorn said.

The money also will be used to fund a program to reclaim water and reuse it for purposes such as irrigation, to improve water quality at the existing treatment plant and to drill wells for an emergency water supply, he said.

Funds to connect the new treatment plant to the State Water Project and to proceed with condemnation proceedings on the rest of the rehabilitation center also will come from the $132 million, Sagehorn said.

The agency will borrow the money through the issuance of certificates of participation, a financing method in which agencies use their future earning capacity as collateral for loans.

The financial firm of Stone and Youngberg of San Francisco is underwriting the financing, Sagehorn said.

“We think it’s only good planning to anticipate the needs of the community,” he said. “We’re not trying to represent the agency as either growth-inducing or growth-controlling. We’re trying to tailor the facilities to the needs of the population.”