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-Editorial
The Imperial Irrigation District Board convened on March 19 to discuss and ultimately approve the 2023 On-Farm Efficiency Conservation Program Description, Agreement, and Advance Payment Agreement. Led by managers Tina Shields and Mike Pacheco, the board’s decision marks a significant step towards sustainable water management practices in the region.
The Board revisited the On-Farm Efficiency Conservation Program (OFECP), which had undergone significant changes since its inception in 2022. Initially, a fixed budget of $41,399,800 was allocated for the 2023 OFECP, with a focus on prorating conservation payments over the total volume. However, on June 6, 2023, the Board authorized a shift back to a single fixed conservation payment rate, aiming to expedite payments and enhance participation.
The 2023 OFECP garnered substantial interest, receiving over 5,300 field applications covering 371,786 acres of agricultural land. This surge in participation led to an increased conservation estimate, nearing 213,000 acre-feet (AF), though subject to adjustment pending final data analysis.
Moreover, the approval of the 2023 federal System Conservation Implementation Agreement on December 6, 2023, unlocked additional funding to support up to 65,000 AF of conservation generated by the 2023 OFECP.
Given the delay in OFECP payments, growers expressed gratitude for an advance payment authorized in September 2023. Building on this precedent, staff proposed an advance payment of $210.50/AF, representing 68 percent of the 2023 OFECP payment rate, to support an estimated 213,000 AF of conserved water. This advance would utilize a substantial portion—87 percent—of the current 2023 OFECP budget, but provisions were made for additional funding should the final conservation yield exceed initial projections.
To accommodate these changes, revisions were made to the On-Farm Efficiency Conservation Program Description and Conservation Agreement, with redline edits highlighting adjustments to the payment structure and clarifications.
Gonzalez Quits Energy Commission
IID Director Javier Gonzalez was appointed to the Energy Consumers Advisory Council Board (ECAC) committee. However, a change emerged when, on February 23, 2024, Director Gonzalez expressed his decision to step down from the ECAC Board committee.
With this development, staff urged the board to nominate a replacement for Director Gonzalez on the ECAC Board committee. The swift action was necessary to ensure continuity and effective representation within the committee. It was decided that Director Brooks Hamby was going to serve on the commission.
Commercial Paper Program Update – Dealer Agreement
Finance
In 2021, Sumitomo Mitsui Banking Corporation secured the role of providing an irrevocable, direct pay letter of credit to support the District’s Revenue Commercial Paper Warrants, Series A (Tax-Exempt) and Revenue Commercial Paper Warrants, Series B (Taxable), with Citigroup Global Markets Inc. serving as the dealer. However, in January 2024, staff learned of Citigroup Global Markets Inc.’s decision to cease its municipal bond underwriting and remarking activities. Consequently, the Finance Department plans to seek board approval to replace Citigroup Global Markets Inc. with J.P. Morgan Securities LLC. as the District’s dealer for its commercial paper program, leveraging J.P. Morgan’s robust presence in the municipal market and existing banking relationship with the District.
IID staff asked for approval for Commercial Paper documents. This includes resolutions appointing J.P. Morgan Securities LLC. as the new dealer for CP Notes, executing the dealer agreement, updating the Offering Memorandum to reflect J.P. Morgan Securities LLC.’s involvement, and utilizing the CP program to finance the S-Line until reimbursement by Citizens, with remaining costs financed through revenue bonds for the S-Line and other capital improvements.
