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Water agency’s money to flow

Expansion of treatment plant will burn nearly half of the existing cash

Posted: May 12, 2009 9:08 p.m.
Updated: May 13, 2009 4:55 a.m.

The Castaic Lake Water Agency’s $116 million-cash reserve currently dwarfs those of many local municipalities, but a series of capital improvement projects will drain every dollar from the fund during the next 25 years, a Water Agency official said.

“We have projects that will utilize every last dollar and then some,” said Dan Masnada, Castaic Lake Water Agency general manager.

Those projects include expanding Castaic Lake’s Rio Vista Water Treatment Plant and constructing a $100 million water recycling system to serve Santa Clarita Water Division customers with effluent water for outdoor use, Masnada said. Santa Clarita Water Division is the retail branch of Castaic Lake Water.    

Steve Cole, general manager at Newhall County Water District, said the huge cash reserve is money well invested by the Castaic Lake Water.   

“They (Castaic Lake) have some very large projects,” Cole said. “Having a large capital reserve is a prudent thing to do.”
Newhall County Water buys 50 percent of its water from Castaic Lake Water.

Castaic Lake’s capital improvement projects kicked off in May with the $45 million expansion of the Rio Vista Water Treatment Plant.

The project will increase the ability of Castaic Lake Water to meet peak demand, Masnada said.

The water-treatment plant will take a huge bite out of Castaic Lake’s cash reserves in the short term. The proposed water recycling project will splash away whatever is left of the cash reserve, Masnada said.

The water-recycling system will parallel the current drinking-water system and carry effluent water for outdoor use. “It’s like building a second water system,” Masnada said about the water recycling project.

Building a second water system comes at a steep price and is a long-term commitment, Masnada said.

“The project will cost in excess of $100 million and will take at least 25 years to build,” he said.

Castaic Lake’s cash reserves were built primarily from issuing municipal bonds, with more than $76 million of the reserve coming from bond money. The reserves will be depleted before the project is complete, Masnada said.

“During that time it is likely we will have to issue more bonds to pay for the project.”



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