SFPUC reports year‑end financials, proposes refunding and capital financing moves to save ratepayers

Charles Pearl, deputy chief financial officer, presented the SFPUC’s fourth‑quarter fiscal year‑end financial report, and Richard Morales, debt manager, presented the capital financing plan and planned refunding activity.

Pearl said lower water, wastewater and power sales volumes (attributed to a cooler, wetter spring and other factors) reduced operating revenues, but those shortfalls were offset by cost savings from vacancies and closing out unspent funds and higher non‑operating income such as interest. As a result, the SFPUC reported positive net results across wastewater, power and clean power enterprises and met fund balance and debt service coverage policies. Audits were underway with financial statements scheduled for presentation in December.

Morales described planned capital financing actions for FY20, including low‑cost state revolving loans, revenue notes and bonds to meet new money needs and ongoing monitoring of markets for refunding opportunities. He reported staff had identified a water revenue bond refunding opportunity and planned to present that transaction for commission consideration on Nov. 26. Morales also explained a near‑term bank facility amendment: State Street was selected following a competitive process to provide an amended $200 million interim funding facility (a 4‑year term with an annual fee) that would replace an expiring Barclays facility and extend existing credit capacity for wastewater interim funding. He said the facility’s lower fee is expected to save roughly $100,000 annually compared with prior facilities.

Commissioners had no substantive objections and asked clarifying questions about timing and rate impacts; staff said the refunding and bank facilities were intended to reduce borrowing cost and that implementation timing aimed to capture current low interest rates.