The Kennewick courier-reporter. [volume] (Kennewick, Wash.) 1914-1938, 1930-08-28
Power Sales to Pay for
Bond Issue Against
the District

One Of the requirements of tho
contract between the Kennewick
Irrigation district and the United
States is that the district must
make a satisfactory settlement
with the state of its present bond
issue and procure a release OF the
dam, water rights and right Of
way from the lien OF the bonds
held by the state. Negotiations
have been carried on with the state
which, if ratified by the people,
will enable the district to meet
this requirement. To accomplish
this the directors have arranged
with the state to exchange new re-
funding bonds for the outstanding
issue on very favorable terms.
The outstanding bonds amount
to $218,000.0O, bearing interest at
6 percent per annum. The past due
interest at approximately $19,5OO
making total of about $751;
10000. The state proposes to ac-
cept payment Of this indebtedness
by exchanging of old bonds for
refunding bonds, bearing interest
at one percent per annum. The
state purchased the bonds origin
ally at 80 percent of par. It now
proposes to accept one percent re-
funding bonds at par equal to the
states original investment. In
other words the district will pay
off its bonded Indebtedness by de-
livering new, one percent bonds to
the extent of 80 percent of the or
iginal bonds. In addition to this
the district will issue new bonds
in payment Of the interest due the
state. The net result is that the dis
trict will Npay off an indebtedness
of $218,000.00 plus SIG, 10000 past
due interest by issuing new one
percent bonds for approximately
$21S, 10000. e.
The contract with the United
States requires the district to con-
vey to the United States, free
from liens and membranes, the
water rights, dam and rights Of
way at Prosser. The state bonds
are n lien on these particular
properties. It therefore becomes
necessary for the state TO release
its lien in order that the district
may be enabled to convey clear Of
remembrance. This the state
agrees to do il the district will
limit It's levies for bond redemp-
ton to the 1000 acres benefited,
thus relieving the outside lands
from future bond assessments.
This means that the 1000 acre area
must assume liability for the bonds
and interest at one percent per
annum. On the other hand the
contract with the United States
provides that the net revenues
from the sale of surplus power
must be used, first for repayment
If the money expended by the gov
.rnment, and second, for the pay
nent of the indebtedness from the
district to the state. IF the dis
riot pays the bonds to the state
,rior to their payment out Of net
'evenues from power sales then
Inder the contract, the power
evenues will be used to reimburse
he district.
While the state is willing to re-
und the bond issue and to release
he dam, water rights and right
f way from the lien of the state
onds, it requires each land owner
0 sign a contract consenting that
he Board of Directors may levy
IL the bond assessments against
he 1000 acre area. Until this con-
ract has been signed the bonds
annot be refunded and the con-
ract with the u. S. cannot be
The form Of contract
S prepared by the state appears
n page s.
Much delay has been experienc-
d in agreeing with the department
4 the interior upon the terms Of
he government contract. Now that
he form of agreement has been
approved it is hoped that every
and owner viii assist in hasten
ng matters by signing the state
ontracts promptly. The contracts,
eady for signature, viii be at the
ffice of M. M. MouIton, secretary
md at the office of Gascoigne e.
Fyfe.