Darrell Berkheimer: NID issues yield clarifications and explanations
February 2, 2018
Nick Wilcox, Nevada Irrigation District's board chairman, has provided some clarifications and explanations as a result of my previous column regarding NID questions.
But his response also has prompted a review of various other issues NID has created.
Wilcox reported NID intends to finance the Centennial Dam by seeking revenue bonds, which do not require voter approval and tax assessments the way general obligation bonds do.
Wilcox explained NID is planning to sell 50- to 100-year revenue bonds at low interest rates — perhaps as low as 2 percent. He reported payment of the bonds would come from "existing property taxes and hydro revenues (primarily from the proposed Rollins No. 2 powerhouse.) Opponents of the project," he continued, "have refused to include this new hydro revenue in any of their calculations."
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Perhaps a good reason for not including that revenue source might be the fact that the No. 2 powerhouse has not yet been built, although the Federal Regulatory Energy Commission has approved the permit for it.
Wilcox reported NID maintains an AA+ bond rating and that the district's last bonds issue — for $26 million at about 2 percent — "sold out in 12 seconds." It was a 30-year bond issue paid in full in 2013.
It must be observed, however, that there is a big difference between 30-year bonds and 50 to 100-year bonds. And just how attractive are such low interest, long-term bonds to investors?
Wilcox also explained why some city residents are excluded from voting for NID board members and issues. He noted both Nevada City and Grass Valley declined to join NID when it was formed back in 1921 — because the cities had their own sources of water. But as the cities grew, the annexed areas remained a part of NID, and the cities purchased excess raw water from NID to serve their increasing populations.
Wilcox reported that situation could be a problem for the two cities in the future — if or when NID no longer has excess water to sell because of demand within the district.
Regarding land purchases, Wilcox said the district has been focusing on buying land within the potential inundation zone since the mid-1920s, after the Centennial site was identified as suitable for a dam. He said NID has not coerced any landowners to sell, and that the properties were purchased at appraised market value under the "no project" condition. He added that some of the property "was resold with a notation in the deeds that the property was subject to inundation."
Money for those purchases came "from reserves and property tax income — not from ratepayers. Furthermore," he continued, "many of the parcels could be retained by NID even if the Centennial Project does not move forward … as NID has an interest in managing and protecting the watershed."
But some district residents questioned whether it was appropriate to use reserves for land purchases if the reserves originally were accumulated for maintenance purposes as the district's infrastructure ages.
Wilcox also reported that the geotechnical studies have concluded "that a dam can be safely and economically built at the proposed site." He noted, "The studies have been posted on the Centennial website for well over a year."
And finally, Wilcox reported that "random polling conducted in 2015 showed that 82 percent of the public supported the project at that time." He said he has more than 11,000 voters in his division, and only four have voiced opposition to him personally, while "many have expressed support for both the project and the district." In responding to Wilcox, I noted my previous column shied away from making definitive statements and, instead, was designed more to add emphasis to issues and questions raised by others.
But I pointed out my column was a direct result of the mistrust of NID, apparently fostered by its past transparency failures. I noted various issues have been raised in many letters to the editor and Other Voices published by The Union, at meetings I have attended, plus those that were stated directly to me.
I added it is obvious that such mistrust has existed for quite some time — long before I was prompted to cite the questions raised. And such mistrust does not mysteriously develop without reason.
In other words, the real NID problem is one of credibility. It's a lack of faith in the district's truthfulness, resulting from the district's failure to keep the public adequately informed. I noted:
n People suspect NID is deliberately underestimating the total costs associated with Centennial Dam.
n People suspect NID is not being truthful on how the project will be financed.
n They suspect the district is being misleading on the sources of the water to fill the dam.
n They doubt that NID is being candid on its plans to sell district water after the dam is completed.
n They read about NID's failure to make timely repairs to its flume and an outlet valve at Rollins Dam.
n They question whether all is being done that's possible to maintain current water storage capability.
Distrust that deep, on so many issues, usually develops only after a lengthy period of time during which the decision makers involved failed to keep the public fully informed on what was being done — and why.
In my more than 50 years of media work — in several different states — I have watched some boards face a re-learning of that credibility lesson, and occasionally at the expense of failing to gain approval of a worthy project.
Some boards have realized it is not enough to expect the public to attend their meetings, or to expect the public to check actions or decisions posted on a website. Some boards have concluded they can eliminate future problems by making monthly mailings, or sending out quarterly newsletters, to their electorates — detailing all significant decisions and actions. And people want candid disclosure — not fluff that spins the issues a certain way. Boards really earn respect when they report fully on negative issues, not just on the positive ones.
On Centennial Dam information issues: Were NID constituents advised in a letter when the dam site was officially declared safe and suitable? And if that was a few years back, would it not have been suitable to repeat that finding with a mailed announcement that the NID was beginning the Environmental Impact Report?
I must conclude, however, that it's important to maintain an open mind on whether a Centennial Dam really will be needed — as a result of anticipated weather and technology changes, and after existing water source capabilities are fully used. That decision should not be clouded by NID's failures of the past, but should be based entirely on the situations as they are seen developing for the future.
Darrell Berkheimer, who lives in Grass Valley, is a frequent contributor to The Union. He is the author of five books available through Amazon. Contact him at email@example.com.