Amador County – The Amador Water Agency on Thursday voted to tack on interest to an existing internal loan to the Central Amador Water Project, looking to fix past board mistakes. President Bill Condrashoff figured loss of funds to be as much as $87,000 in an internal loan of $800,000 to CAWP, from Amador Water System. Interim General Manager Gene Mancebo said the board “agreed to use an average historic interest rate of earning applied to each of the last 5 years that money was utilized.” For the future, he said the agency would base CAWP’s rates on the LAIF index (or a minimum of 2 percent) over 30 years. Finance Manager Mike Lee showed the board past unpaid balance over the last 5 years, and investment rates then in effect, to estimate a $55,185 loss in potential interest, Mancebo said. The CAWP system “kind of went in the hole for the last few years,” and “in a way, it was using money that was some other district’s” money, he said. The “board recognizes there should be some interest earnings for those systems,” and some “interest might have occurred, had this money been invested someplace.” The board needed to do something that was fair and reasonable, and agreed variable rates were fair and reasonable. Lee said CAWP has had a deficit since 2007-2008. The board voted to approve a variable interest rate on the CAWP loan, based on 4 indexes averaged over the last 5 years. Directors Terence Moore, Don Cooper and Gary Thomas initially were against raising the rate above the current 1 percent. Condrashoff wanted to look at potential losses from investments foregone by AWS because of the loans. Cooper said he was bothered that the board could “go back and slap ratepayers for something the previous board decided.” Vice President Debbie Dunn asked if Cooper meant to set a “precedent” of ignoring past board actions. Cooper said he meant it only “in this particular case.” Moore and Cooper later suggested increasing the loan rate to 3 percent, and Dunn urged a higher percentage. Moore said “we’re taking the heat now because we’re admitting we can’t do this.” He said AWA “has been stealing funds from AWS to subsidize CAWP and other systems.” Jackson Councilman Keith Sweet said the Jackson City Council is “extremely concerned over the situation” and “alarmed you were making loans at zero percent interest.” Moore said: “We’ve already spent the money – it’s gone.” He said the agency needed to find a fair percentage rate and go back and charge the districts, or start now with higher internal loan interest rates. Sweet said raising percentages “will only make it harder to pay,” but Jackson is “strongly supportive of the effort to memorialize loans and recover lost costs.” Story by Jim Reece This email address is being protected from spambots. You need JavaScript enabled to view it.-
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Amador County – The Amador Water Agency on Thursday voted to tack on interest to an existing internal loan to the Central Amador Water Project, looking to fix past board mistakes. President Bill Condrashoff figured loss of funds to be as much as $87,000 in an internal loan of $800,000 to CAWP, from Amador Water System. Interim General Manager Gene Mancebo said the board “agreed to use an average historic interest rate of earning applied to each of the last 5 years that money was utilized.” For the future, he said the agency would base CAWP’s rates on the LAIF index (or a minimum of 2 percent) over 30 years. Finance Manager Mike Lee showed the board past unpaid balance over the last 5 years, and investment rates then in effect, to estimate a $55,185 loss in potential interest, Mancebo said. The CAWP system “kind of went in the hole for the last few years,” and “in a way, it was using money that was some other district’s” money, he said. The “board recognizes there should be some interest earnings for those systems,” and some “interest might have occurred, had this money been invested someplace.” The board needed to do something that was fair and reasonable, and agreed variable rates were fair and reasonable. Lee said CAWP has had a deficit since 2007-2008. The board voted to approve a variable interest rate on the CAWP loan, based on 4 indexes averaged over the last 5 years. Directors Terence Moore, Don Cooper and Gary Thomas initially were against raising the rate above the current 1 percent. Condrashoff wanted to look at potential losses from investments foregone by AWS because of the loans. Cooper said he was bothered that the board could “go back and slap ratepayers for something the previous board decided.” Vice President Debbie Dunn asked if Cooper meant to set a “precedent” of ignoring past board actions. Cooper said he meant it only “in this particular case.” Moore and Cooper later suggested increasing the loan rate to 3 percent, and Dunn urged a higher percentage. Moore said “we’re taking the heat now because we’re admitting we can’t do this.” He said AWA “has been stealing funds from AWS to subsidize CAWP and other systems.” Jackson Councilman Keith Sweet said the Jackson City Council is “extremely concerned over the situation” and “alarmed you were making loans at zero percent interest.” Moore said: “We’ve already spent the money – it’s gone.” He said the agency needed to find a fair percentage rate and go back and charge the districts, or start now with higher internal loan interest rates. Sweet said raising percentages “will only make it harder to pay,” but Jackson is “strongly supportive of the effort to memorialize loans and recover lost costs.” Story by Jim Reece This email address is being protected from spambots. You need JavaScript enabled to view it.
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