City plans to issue bonds to buy water rights from defunct housing project
October 31, 2012 6:40 PM
RENE DE LA CRUZ, Staff Writer

HESPERIA • The city of Hesperia signed a $31.7 million agreement to buy permanent water rights held by Ranchos Los Flores, LLC., according to a document obtained from the Mojave Water Agency on Wednesday.

The agreement, which was signed Oct. 3 by Mike Podegracz, the city’s manager, concerns “certain water rights and related interests,” as it pertains to 5,971 acre-feet of base annual production rights held by Rancho in Summit Valley.

“We are basically attempting to purchase the water rights, instead of leasing them like we have been for the last 15 years,” Podegracz said. “We created a joint power authority to authorize the issuance of the bonds so we can acquire the rights.”

If the council approves the bonds, and once escrow closes in mid-December, the city will be able to borrow the money at the same existing lease rate, Podegracz said.

“Water issues can be confusing, but there are financial implications for any water company, district or municipality as they manage their various portfolios,” said Kirby Brill, general manager with the water agency. “With any municipality, the impact of the purchase of water rights are unknown at first.”

The 28-page document states that the agreement is between the city and R.E. Loans, a California limited liability company serving as attorney-in-fact for Rancho.

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