Madera Irrigation District Reduces Bond Obligation and Bond Life For Its Landowners

The Madera Irrigation District (MID or District) is incredibly pleased to announce that a bond prepayment of $2.68 million was completed on September 1, 2020 for the District’s Water Revenue Refunding Bonds, Series 2015 (Series 2015).  This prepayment has resulted in the shortening of the Series 2015 bond life.  Additionally, through diligent fiscal management, it has been determined that the Series 2015 bonds can now likely end in the approaching year of 2026, a whopping 14 years earlier than the original end date of 2040.  A bond payoff in 2026 will have cut the life of the bond, and associated bond obligation, in almost half from an original 30 year bond to a 16 year bond.  It is anticipated that this will result in 14 years of savings to MID landowners for the annual 9(d) assessment payments.

On September 17, 2015, MID closed the Series 2015 bond refunding for $29,275,000.  The total cash flow savings at the time was over $20 million.  Due to continued accelerated redemption of the remaining 2015 Bonds by the District, total cashflow savings over the life of the transaction are now expected to be $23.7 million.  This $23.7 million is personal savings to MID’s landowners.

The Series 2015 bonds are directly tied to the District landowners’ Proposition 218 9(d) assessment.  The Proposition 218 assessments were approved by resolution on March 15, 2011, following a Proposition 218 assessment ballot proceeding, where the District landowners voted and approved the proposition to finance acquisition of the 9(d) contract from the United States Bureau of Reclamation (USBR).  The Proposition 218 assessments are restricted in use for the USBR contract payments and are not available for general District purposes.  When voted on, the 9(d) assessment paid by MID landowners was planned to extend the life of the bonds, originally 30 years, however now that assessment timeframe is scheduled to be slashed to just 16 years.  The majority of landowners in the District currently pay a 9(d) assessment that ranges from $24.30 to $38.07 per acre per year, depending on the land type.

“MID is extremely proud that it has been able to reduce the bond obligation and bond life for the benefit of its landowners.  This is money that goes right back into the pockets of MID landowners” stated Jim Erickson, MID Board President.

Additionally, there is more positive news related to MID’s Series 2015 bonds.  In 2019, the Standard & Poor’s underlying rating (SPUR) associated with the Series 2015 bonds was upgraded.   The upgrade moved the rating from a “A” to a “AA-”, highlighting the District’s sound leadership and financial stability.  The District is happy to continue this type of work so benefits, such as these, can be realized directly by its landowners.

The Madera Irrigation District (MID or District) is incredibly pleased to announce that a bond prepayment of $2.68 million was completed on September 1, 2020 for the District’s Water Revenue Refunding Bonds, Series 2015 (Series 2015).  This prepayment has resulted in the shortening of the Series 2015 bond life.  Additionally, through diligent fiscal management, it has been determined that the Series 2015 bonds can now likely end in the approaching year of 2026, a whopping 14 years earlier than the original end date of 2040.  A bond payoff in 2026 will have cut the life of the bond, and associated bond obligation, in almost half from an original 30 year bond to a 16 year bond.  It is anticipated that this will result in 14 years of savings to MID landowners for the annual 9(d) assessment payments.