Bonds Sold for $25-Million Water Treatment Plant Project for Capistrano Valley Water District

Southwest Water Company has announced funding for its project to design and construct a $25-million reverse osmosis water treatment facility in San Juan Capistrano, California. Funding is assured through the sale of tax-exempt, AAA-rated bonds, underwritten by Lehman Brothers and issued by the San Juan Basin Authority. ECO Resources, Inc., a subsidiary of Southwest Water, will serve as the general manager for the project under a contract with the Capistrano Valley Water District. Upon the project's completion, scheduled for late 2004, ECO Resources will operate the facility under a 20-year, $20-million contract.

The treatment plant is designed to use local groundwater to produce over 5 million gallons per day of drinking water, or 4,800 acre feet per year, approximately half of the city's total water needs. In addition to construction of the facility, the project includes drilling eight new wells and installing pumping equipment and underground pipelines. The project will enable the Capistrano Valley Water District to take advantage of financial incentives offered by the Groundwater Replenishment Program sponsored by the Metropolitan Water District of Southern California. That Program is designed to reduce municipal water agencies' dependence on water from such sources as the Colorado River.

Anton C. Garnier, Southwest Water president and chief executive officer, said, "We are pleased to have cleared the necessary financial hurdles to allow this important project to go forward. The decision of the Capistrano Valley Water District and the City of San Juan Capistrano to construct the water treatment facility is a real testament to their foresight and their desire to ensure the continued availability of affordable, high-quality water for the citizens of San Juan Capistrano. While the plant will be the first of its kind in south Orange County, we can envision similar projects to provide potable water in an environmentally responsible manner."

ECO Resources' partners on the project include Boyle Engineering of Newport Beach, Calif., which is providing engineering services, and ARB, Inc. of Lake Forest, Calif., which is the construction contractor. Osmonics, Inc. of Minnetonka, Minn., will supply the reverse osmosis equipment.

Southwest Water Co.

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