Nipomo board votes to borrow $4 million for pipeline

May 11, 2013

water2Nipomo Community Services District Board members voted unanimously for a plan to borrow an additional $4 million for the construction of a water pipeline from Santa Maria, shortly after a lawsuit was filed contesting drawing the money from a reserve fund. [Tribune]

On Friday, a week after the Mesa Community Alliance filed a lawsuit to stop the board from drawing from the fund reserved for repair and replacement of existing assets, district leaders voted to approve the financing plan for the $17.5 million project.

Last May, Nipomo-area property owners voted against a plan to fund the construction of a $26 million pipeline by raising property taxes through an assessment district.

Opponents of drawing money from the reserve for the pipeline claim Nipomo officials are trying to resurrect the same project without approval from ratepayers.


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The philosophy of the time:

When in doubt, go into debt :–(

There is allot of “just do it and let the public press charges” going around. Water is big buisness from what you drink to what you flush. This is dependable renvenue stream and for a franchise that controls the process.

Wouldn’t you think that the voters in Nipomo who are served by the water board and voted against the expansion would be “up in arms” about this very transparent end-run-around?

The voters did not vote against any expansion. They voted not to fund the project with a property tax increase. Read the ballot. It was stated in plain English. This funding plan will not increase property taxes or water rates.

The project was approved several years ago without legal challenge, and the EIR was approved and certified years ago without legal challenge.

Most of the 5 people bringing this lawsuit don’t even live in the NCSD boundaries.


Your post sounds like NCSD talking points. A recent NCSD press release (5/9/2013) was almost entirely focused on trying to cast blame on CMA for NCSD’s own problems which are a result of NCSD’s own behavior. The press release was embarassing to even read. Rate payers have the right to challenge decisions made by their water providers. Political activist groups should be praised because they do the hard work that serves many. The CMA’s lawsuit against NCSD saved NCSD’s rate payers a raid by the NCSD BOD and GM for $4million it needs for its SM pipeline obsession.

To address your other statements…

1. The vote against the SM pipeline was certainly a vote against new real estate development. The Nipomo residents have indicated many times over the decades, in many ways, that they do not want new development. And they should especially be concerned because the costs for the SM pipeline continue to spiral upward out of control.

2. You are being quite selectively dishonest in saying the “funding plan will not increase property taxes or water rates” when the project, if the vote had passed, WOULD DEFINITELY encumber each property-owner’s property (each parcel) with an encumbrance. An encumbrance is like a mortgage in that, while the owner can still sell the property, the amount they will get will be less because of the assessment encumbrance.

How would you like NCSD taking a second mortgage out on your home to pay for a project you adamantly opposed?

3. The project was not “approved” by the voters years ago. The NCSD board of directors approved it, in spite of very aggressive community outrage…but that is not the same as the voters approving it.

It is not surprising that NCSD has not been legally challenged by a citizen’s activist group before now. Many Nipomo residents do not have access to the kinds of funds it takes to launch and succeed in a lawsuit, and it takes time to develop resources that will enable a citizen’s activist group to do it.

I think the CMA picked the perfect issue over which to challenge NCSD. The attempt to take money from the Reserve Funds for the SM pipeline project was over-the-top wrong. NCSD thought they could get away with it because, to date, no one has legally challenged NCSD over their water-management practices.

4. You fail to mention the case court filing against NCSD for their irresponsible water-management behavior, with a stone-cold promise to file a lawsuit against NCSD if NCSD does not stop raiding the water resources which are supposed to serve MANY local water agencies.

The lawsuit which you reference is the CMA, a local citizen activist group on the Nipomo Mesa. CMA, has filed the lawsuit against NCSD which, so far, has stopped NCSD from illegally taking the $4million SM pipeline $shortfall–from NCSD’s Reserve Funds for replacement of capital assets. NCSD clearly attempted a grab-and-snatch of the Reserve, and their claim that it was legal because it would, over time, decrease the amount of wear and tear on NCSD’s water production and delivery system, is absolutely ludicrous.

It appears it has, actually, stopped NCSD’s attempt at grab-and-snatch of the Reserve Funds….for the present time.

The second group has issued a threat of lawsuit against the NCSD if NCSD does not cease sucking dry the groundwater basin. The case filing was made by three members (Oceano, GB, AG) of the Northern Cities Management Area (consisting of AG, GB, Pismo and Oceano). It appears the case filing was triggered after NCSD thumbed its nose at the other water-rights parties and actually still encouraging development by issuing new intent-to-serve letters.

The other parties have a right to protect their own groundwater resources. NCSD has sucked up so much water from the GW basin, it has actually stopped the flow of GW into the NCMA.

The agencies represented in the three-party law case filing against NCSD (AG, GB, OCSD) have good reasons to be concerned. NCSD has made it clear that they are going to support more real-estate development, despite the threat to the only NCSD water resource: the groundwater from Nipomo Mesa Management area, which is part of a larger groundwater basin shared by the five cities and Santa Maria.

NCSD has ZERO diversity in its water portfolio, and they are sucking up the groundwater that is supposed to be for ALL who have rights to the greater water basin. With the steadily decreasing amount of water resources for California.

This year each State Water Project residential-water contractor will get less than 50% of the amount for which they are contracted, and it is not going to improve in the foreseeable future. The Western U.S., including California, is locked in a long-term drought at a time when there are more and more residents who need water.

An educated, responsible water manager knows that groundwater should be used mainly for times of drought. In this way, ALL water sellers can survive decades-long droughts. NCSD’s only source of water is groundwater.

Yet, even after the no-vote on the assessment district formation, NCSD STILL is allowing development. Even with the failure of NCSD to, as of yet, actually access funding for the project, NCSD is STILL singing intent-to-serve notices (promising to provide a new water connection) to developers.

5. Your claim that “most of the 5 people bringing this lawsuit don’t even live in the NCSD boundaries is straight from the NCSD press release of 5/9/2013. And it is dishonest and absolutely ludicrous.

The SM pipeline, if ever constructed, serves ALL of the Nipomo Mesa Management Area’s participants. NCSD is not the only water purveyor in the area. Golden State has an outpost local water agency, and Rural Water is also another water agency. There are other smaller agencies, but those are the main providers on the Nipmo Mesa.

1. You need to read the ballot to see exactly what the assessment vote would have done. You are making a statement on presumption of the voters’ motives.

2. The latest approved funding plan does not create an encumbrance (a legal claim on property). There is no property assessment in the plan.

3. Of course the project was not approved (or disapproved) by voters. It was approved by the BOD as is their authority. Purchase of trucks and other equipment are not approved by the voters either. Refurbishment of the sewer plant was not approved by the voters either, but they had the right to object to the method of funding (minimal objections were insufficient to overturn the rate increase to fund the project).

4.The court filing you mention is not a lawsuit. In fact it encourages the NCSD to expedite the Supplemental Water Project and take even more water faster. Read it.

5. Only 2 of the 5 I know about have ever surfaced at NCSD meetings. The others live in Cypress Ridge and Trilogy.

Well, they are, Bob. A citizens action group (CMA) has filed a lawsuit against NCSD and it appears that they have stopped NCSD from raiding its Reserve Fund for replacement of assets or the $4million still needed to start construction.

I think there is a time limit on how long after a grant is issued that the project for which it was issued has to start.

NCSD sounds like it is absolutely desperate to start the SM pipeline project in the very, very near future, otherwise it won’t be until next year when they can start the project.

And a lot of things can change in 6 months…

this was learned from the Great State of California; reach into the “general fund”? would like to know who is lending the funds how the borrowing is planned to be repaid.

The NCSD has no general fund. Read the budget.

I understand that the lenders will likely be bond underwriters (private parties) and the repayment will come from rebates from the state from property taxes collected in the past from Nipomo. Note: The NCSD does not get rebates from Summit Station or Blacklake properties. The County gets those funds.

NCSD stated in a press release that bonds would not be sold because of the issues of the CMA lawsuit and the threatened lawsuit from three other water agencies. With such financial instability hanging over NCSD, bond sales would like not fetch a decent price.

No CSDs have a general fund. This was intentionally set by the state to help prevent CSD boards of directors and general managers from trying to raid built up funds, leaving the rate-payers with the job of building up the general fund again.

It looked for a time NCSD was going to lose the grant money. Paavo Ogren even wrote letters to NCSD demanding that they either sign the grant agreement or the monies would go to other government agencies on a waiting list.

If NCSD gets “rebates from the state” for property taxes, that money–which was used or to be used for other operations before–it will have to be replaced by someone. Who else but the rate payers?

Another press release indicated that the $6 “litigation fee” every NCSD customer paid on their bi-monthly water bill, which the NCSD BOD had previously instructed staff to stop charging–was going to continue to be charged.

I wonder on the legality of that. The litigation charge was earmarked for the SM GW basin mega-lawsuit. So NCSD thinks it can just use it for any need that comes up? Maybe funding of its vastly overpaid general manager or whatever?

NCSD has itself in a pickle. It looks like they won’t be starting the project this year, and another six months can bring a lot of changes on the Nipomo Mesa…

The press release at did not mention an additional “threatened lawsuit,” only the MCA (not CMA) lawsuit.

The “rebates from the state” are discretionary and can used for any purpose. The NCSD has been using them to pay off other bonds. It was not used “for other operations.”