Rathdrum, Kootenai County, Idaho

Hidden Valley Addition Water Association, a small rural community water system, lacked funds to pay for recently completed, vitally needed repairs

RCAC provided a loan to cover the water system’s repair costs

Hidden Valley Addition is a 48-lot subdivision near Rathdrum, one of the oldest towns in northeastern Idaho. HVAWA supplies drinking water and irrigation service to the subdivision’s residents, most of whom are retired and on fixed incomes. HVAWA used cash reserves to fund water purchases and upgrades during the past two years, ultimately reducing cash on hand to just $783.

Although HVAWA budgets approximately $8,500 annually to purchase water from Greenacres Irrigation District, but since 2011, abnormally dry weather conditions have resulted in water prices escalating rapidly. In 2012, one of the system’s main water lines broke, and the association had to contract for the repairs even though they lacked sufficient funds to pay the contractor.

HVAWA was able to secure a loan from RCAC in a very short period of time, allowing HVAWA to settle the final invoice for repairs, and to replenish its reserve account. The RCAC loan spreads the line replacement costs over a five-year period. The monthly debt service obligation on the RCAC loan is minimal and, as a result, the HVAWA did not have to increase water rates.

“Loans to nonprofits such as ours are not always readily available, and RCAC’s was particularly helpful to our Association,” said Pastor David Rachoy, HVAWA board chairman. “It allowed us to make the necessary upgrades to our system, and we are very pleased with our overall experience with RCAC.”

RCAC’s Loan Fund is a financial resource for rural communities that fills financing gaps and serves those traditionally neglected by conventional markets. The loan fund offers a comprehensive array of products for environmental infrastructure, affordable housing development, community facilities and businesses in rural locations. Each RCAC loan product is designed to meet the unique needs of the applicant.

RCAC created its Loan Fund in 1988 and was later certified as a CDFI. In FY14, RCAC closed 36 loans which totaled more than $12 million in nine states. These loans supported 1,989 individual water and wastewater connections for rural citizens; 300 housing units; almost 4 million square feet of community facility space; and created or retained 273 jobs.