COSTA MESA, Calif.--(BUSINESS WIRE)--Mesa Water District (Mesa Water®) has taken financial steps that will lead to an estimated $8.96 million in cost savings for the District and its customers over the next 10 years, including eliminating unfunded pension liabilities, refinancing debt and securing additional funding for its Capital Improvements Program (CIP).
Mesa Water® will eliminate its unfunded pension liability through the use of a pension trust, with projected cost savings of approximately $7.6 million (net present value).
The District completed refinancing of its debt, as well as securing an additional $13 million for its capital improvement program, at an interest rate of 1.635 percent. The savings on the refinancing is approximately $179,000 per year, or $1.36 million in net present value. All debt will be paid off in 10 years.
“Our strong financial performance and AAA credit rating allowed the District to obtain an incredibly low interest rate of 1.635 percent,” said General Manager Paul E. Shoenberger. “This positions Mesa Water to efficiently manage its capital improvement priorities and ensure our customers continue enjoying safe, high-quality water,” Shoenberger added.
The capital improvement program features a 5-year plan for water system improvements, including automation of water wells, pipeline testing and rehabilitation, and asset refurbishment and replacement.
The significant cost savings follows the recent announcement that Mesa Water has again been assigned an AAA rating from both Fitch and Standard & Poor’s ratings agencies, the highest credit rating that can be achieved by an organization, demonstrating the District’s industry-leading financial management and ability to reliably meet the water needs of its customers. Since 2011, Mesa Water has been one of the most efficient water agencies with the lowest expenditures per capita of any water district in Orange County.
About Mesa Water
Founded on January 1, 1960, and governed by a publicly-elected, five-member Board of Directors, Mesa Water is an independent special district that provides water service to 110,000 residents in an 18-square-mile service area that includes most of the City of Costa Mesa, parts of Newport Beach, and John Wayne Airport. Mesa Water provides nearly 100 percent local supplies to its customers due to the expansion of the Mesa Water Reliability Facility. Visit www.MesaWater.org, follow @MesaWater on Facebook, Twitter, or Instagram, or call us at 949.631.1200 to learn more.