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OID will research $50 million bond for system repairs

This photo was taken in the 1940s as tunnels were being built for th Oakdale Irrigation District's water delivery network.  Seven m iles of the district's tunnel system are eroding and in need of repair.
This photo was taken in the 1940s as tunnels were being built for th Oakdale Irrigation District's water delivery network. Seven m iles of the district's tunnel system are eroding and in need of repair.

OAKDALE -- With more than seven miles of eroding tunnels, some hollowed out nearly a century ago, Oakdale Irrigation District sits atop a "time bomb" that could turn some of the nation's finest farmland into wasteland.

Should a major tunnel fail, director Frank Clark said, the district would be unable to deliver water to nearly 55,000 acres of hay, almonds, walnuts and corn.

"The tunnels are a time bomb waiting to go off," said Clark, explaining why the district should consider a $50 million bond to repair the 330-mile system. "A collapse or canal washout would cost us and farmers millions."

Such a disaster also would cut off water to 761 residential users.

After that ominous warning, the board voted 3-1 Tuesday to begin researching the pros and cons of a $50 million bond.

"We need to avoid a catastrophic event," Clark said, noting that tunnels are collapsing from the ceiling and sides. "We can save this system and save money by getting these repairs done quickly."

Clark pointed to $400,000 in potential savings on the North Side reservoir near Rodden Lake. OID has been planning to build the facility in three phases, paying $200,000 each time just to get the contractor on site. Making it a continuous project means one payment.

The district has $30 million in the bank, said General Manager Steve Knell, adding that those reserves and revenue from water bills are sufficient collateral to obtain $50 million from a lender.

That would allow OID to tackle six major projects it says are vital to shoring up the system and improving its water conservation. The alternative is to spend $4 million annually on repairs, risking collapses and washouts.

Repairs accumulate

The "pay-as-you-go" approach has kept OID out of debt, Knell noted, but it also has allowed key segments to fall into disrepair.

The 7,525-foot Cape Horn tunnel, built in 1913 and enlarged in 1947, has rocks falling from the ceiling and sides. Water has cut a 3- to 6-foot channel into the bottom of the tunnel, increasing the likelihood of a wall collapse.

Tunnels were dug so gravity could carry water from one end of the system to the other. The other option was to pump water over the hills separating Goodwin Dam, OID's water source, from Oakdale area farmland.

Some customers worry that water rates could rise if the district were unable to make its bond payments, but director Jack Alpers said there are greater concerns.

"If we have a collapse, it won't matter how much water costs because you won't be getting any," he said, noting that Tuesday's decision doesn't commit the district. "We've still got to decide whether to finance it, hire an expert to look at our financial package, then we can make our decision."

Director Tony Taro, who voted against exploring the possibility of a bond, said his neighbors prefer that the district pace its repairs. Director Steve Webb also questioned such a financial commitment, but agreed that the district needs at least to seek proposals.

Also at Tuesday's meeting:

The district noted a jump in residential shut-offs and late payments because of foreclosures. Five to six customers are cut off each month for lack of payment, compared with the usual two or three a year, and 25 delinquency notices are being sent out monthly, compared with the usual six a month.

That means nearly 5 percent of OID's 761 residential customers have been foreclosed this year. There has been little change in agricultural accounts, Chief Financial Officer Kathy Cook said.

Bee staff writer Richard T. Estrada can be reached at restrada@modbee.com or 578-2304.

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