Where:
Rural Oxnard, Ventura County, California

Problem:
A small water system needed to refinance a variable interest loan.

Solution:
RCAC’s Loan Fund refinanced the loan to reduce payments and enable the system to plan for future improvements.

The Mutual Water Company of the Strickland Tract (SMWC), a nonprofit organization located 1.5 miles north east of the city of Oxnard and surrounded by farmland. SMWC provides water to 126 users in its service area. The system’s customers have a $36,838 median household income, nearly $30,000 lower than the state’s non-metro MHI, which is $62,883.

SMWC received a $333,274 business loan in 2010 from another bank, which was used to make improvements including new tanks, meter installation and pressure tank refurbishments. But the loan had a variable interest rate that was nearly 2 percent higher than the Wall Street Journal Prime Rate, and the payments have increased steadily.

The system approached RCAC requesting to refinance the loan in order to provide financial stability. The resulting refinance reduced the system’s payments by more than $800 per month. With the debt service stabilized, the system will have adequate revenues to cover operating expenses and plan for future improvements.