TUSTIN : New Loan Terms to Save $1.3 Million
A key amendment in the contract between the city and the Orange County Water District to build and operate a ground water desalter plant in Tustin will result in savings of more than $1 million for the city, officials said.
The City Council on Monday unanimously approved a resolution that provides for the city to pay the same interest rate that OCWD will pay to a state agency that will provide money for the project.
In 1992, OCWD agreed to build a plant to improve the city’s ground water at a cost of $5.5 million. The city would pay the construction cost over 11 years at a fixed annual interest rate of 7%, said Public Works Director Bob Ledendecker.
With the amendment, the city will now pay from 3.5% to 4% in interest, saving about $1.3 million, Ledendecker said.
Ledendecker said the OCWD has applied to the state Water Resources Control Board for a loan, with interest rates ranging from 3.5% to 4%. The board has tentatively approved the loan, he said.
Under the loan agreement, OCWD promised to charge Tustin the same interest rate that it will pay to the state, Ledendecker said.
The desalter plant, to be built on 17th Street, will remove particles and other impurities in the ground water.
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