Sunday, August 27, 2006

Let's use the American Middle Fork funds for water, energy projects

By: Bruce Kranz

As a Placer County resident would you like more fire hydrants? A hookup to a reliable local water supply instead of relying on bottled water when your storage tank dries up or your well becomes polluted?

Would you rather have a sewer connection instead of a septic tank? Would you like dead trees and brush hauled away for good use rather than fueling a catastrophic wildfire that burns your house and turns Lake Tahoe brown?

Would you like a tax increase or higher "service" fees on your utility bills to pay for it?

What if there was a solution without a tax increase?

I think there is. For months I've been touring Placer communities and special districts with a message. The Placer County Board of Supervisors has a golden opportunity to reward our residents for their foresight. In 1961, voters, by a 25-to-1 margin, approved tax-free revenue bonds to finance the building of water and electrical generation facilities on the Middle Fork of the American River.

Since 1967, the Pacific Gas and Electric Company has been collecting receipts on the sale of electricity from these Middle Fork facilities and paying off the bonds that built them. This system includes seven dams, four reservoirs and five hydroelectric plants.

In 2013 the bonds will be paid off and the revenues will revert entirely to Placer County and the Placer County Water Agency (PCWA), who will evenly split the proceeds.

Last January, the board and the PCWA formed the Middle Fork Project Finance Authority, which will be responsible for the profits generated by the paid-off facilities. The conservative estimate of revenues is $15 million to $20 million a year. Since water and electricity will not be getting any cheaper, I believe the annual profits will more likely be in the $20 million to $95 million range. The entire county budget is about $500 million. That's a big chunk of change.

The profits from the sale of electricity and water are a golden opportunity for Placer County. How it is used will either reward Placer County taxpayers or create a feeding frenzy among special interests.

Who could possibly want the money? Everyone. There is a lot of benefit that can be derived from the windfall. However, without setting up criteria on how this money is to be used, special interests will line up for a piece. They will pressure the board of supervisors. And unfortunately, the state Legislature will be eyeing the money as well.

We have to first ensure the water and electricity keep flowing. That's the easy part. Now the hard part.

Currently, the board of supervisors has absolutely no restrictions on what they can do with their half of the revenues. They may spend it anyway they see fit. Anyway.

I propose spending the remaining portion on water related infrastructure, water quality related projects and energy infrastructure projects.

Placer County voters were told they were investing in the Middle Fork as a water and energy project and that's what they voted for. That's how I believe it should continue into the distant future. I propose grants and low interest loans to individuals, private companies, cities and special districts. I propose projects ranging from loans to help a homeowner fix a polluted well to countywide projects like regional waste treatment from Lincoln to Colfax and Lake of the Pines.

What is required to accomplish these objectives is to structure the new authority to represent cities and special districts as well as the board and the PCWA, to create guiding principles for distributing revenues of the Middle Fork Project and to give spending authority to the new Middle Fork Project Finance Authority.

I can report progress. We are gathering resolutions supporting the concept from the Special Districts Association, city of Colfax, Foresthill PUD and Assemblyman Tim Leslie.

Supervisor Bruce Kranz represents the Fifth District which stretches from North Auburn to the Nevada state line.