South Tahoe PUD may delay multimillion-dollar meter project | TahoeDailyTribune.com
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South Tahoe PUD may delay multimillion-dollar meter project

Jack Barnwell
jbarnwell@tahoedailytribune.com

SOUTH LAKE TAHOE, Calif. — South Tahoe Public Utilities District may flush some projects for the 2015 year because of delays in loan programs from California.

Paul Hughes, the district’s chief financial officer, said at a Aug. 6 board meeting that loan programs for the district’s water meter installation project.

“Obtaining funding this year has been challenging to say the least,” Hughes said.

The district has neither executable agreements for meter project or another program.

“The projects are essentially on hold,” he said.

Hughes said the reason for the hold up was because South Tahoe PUD appealed an 1.67 percent interest rate initially provided by the state for the loan. The district wanted a no-interest rate.

Once the appeal had been decided, Hughes said the state would fast-track the agreement.

South Tahoe PUD is in year two of a $16.5 million water meter installation project for approximately 80 percent of its customers.

The district has tapped into California’s loan programs during the years because of the low or no interest rates compared to alternatives on the open market. The loan would be paid for with revenue from the hike in water rates over the next five years.

“They usually save hundreds of thousands or millions over the life of a loan,” Hughes said.

The district awarded the contract for 2015 to Vinciguerra Construction in June for $2.04 million. Vinciguerra Construction is currently installing meters from the 2014 fiscal year project.

Shannon Cotulla, the district’s assistant general manager, said the district has compensated by utilizing funding from its 2014 contract to install more meters.

However, it will have some impacts. Cotulla said the district hasn’t issued a notice to proceed with installation under the current contract until a decision has been made.

The options: Have Vinciguerra Construction hold its contract price and proceed in May 2016 or terminate the contract with the contractor. The latter carries the consequence for potential reimbursement of the contractor’s bonding and insurance costs.

“The contractor is aware that we are having these funding programs,” Cotulla said. “We are now just getting this news about the loan not being approved until the appeal has been settled, which tells me it could several months before it’s resolved.”


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