APPLE VALLEY, Calif. -- The California Department of Water Resources has approved a request by the Mojave Water Agency allowing the agency to access an additional 25,000 acre-feet of water annually to meet future water demands within its area of operation. This represents a 50 percent increase over the agency's current entitlement.
The water rights were purchased by the sale of $26.2 million in certificates of participation issued through the Mojave Water Agency. The issue was underwritten by the Newport Beach, Calif., public finance firm of O'Connor & Company Securities.
The additional permanent water supply, obtained from the Berranda Mesa Water District in Kern County, is expected to replenish the area's depleted water basins and meet demand through 2015, according to Larry Rowe, general manager of the Mojave Water Agency. Largely rural, the Berranda Mesa district is served by the Kern County Water Agency.
"Securing the entitlement to this additional water is critical to the future operations of our water agency," said Rowe.
One of 29 state water agencies, the Mojave Water Agency service area encompasses about 4,900 square miles of eastern San Bernardino County. Within its boundaries are the communities of Barstow, Adelanto, Apple Valley, Hesperia, and Victorville in the southwest and Yucca Valley in the southeast.
Anthony Wetherbee, the O'Connor & Company Securities partner who led the financial team that issued the COPs, said this marks the first transaction in California under the so-called "Monterey Agreement." Signed in 1994, the agreement provides for amending state water contracts to allow for the transfer of water entitlements from agricultural to urban water users.
"This is a milestone transaction for the state of California water agency system because it sets an important precedent for the implementation of the Monterey Agreement," Wetherbee explained. "It legally and financially dots the i's and crosses the t's for water agencies that are studying the feasibility of making similar transfers in the future."
Issuance of the COPs was preceded by a Superior Court of San Bernardino opinion endorsing the legality of the transaction in light of Propositions 13 and 218. Wetherbee pointed out that the certificates will be repaid from the proceeds of a small property tax increase, the authority for which was enacted by the voters when they created the Mojave Water Agency in 1960.
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