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Commission authorizes commercial paper increase to support SSIP and approves pipeline contracts
Summary
The commission approved increasing the wastewater commercial paper program from $500M to $750M to support SSIP contracting, described bank credit facilities and disclosure steps, and approved CEQA findings and a $15.3M construction contract for pipeline work among other capital items.
The commission approved a request to increase the wastewater commercial paper (CP) program from $500 million to $750 million to provide interim financing for SSIP capital work and larger construction contracts.
Eric Sandler, the commission’s CFO, said about $61 million of the commercial paper program has been issued to date and that the requested increase would be supported by bank credit facilities (up to $150 million with Bank of America and up to $100 million with Sumitomo Mitsui Banking Corporation). Sandler explained commercial paper is short‑term, reissued debt backed by bank facilities and noted disclosure and representation language in the bank agreements had been reviewed with the City Attorney’s office.
On capital items, staff presented and the commission approved CEQA findings and authorization for the Pipeline No. 2 replacement project (item 15) and awarded contract DB128R2 (item 16) for preconstruction and construction services in the amount of $15,283,930 to the lowest qualified responsible bidder. Commissioners discussed cost estimates for SSIP projects and staff said project selection will use cost thresholds and minimum project sizes to improve cost effectiveness.
Why it matters: increasing commercial paper capacity will expand interim borrowing to certify and fund a series of SSIP contracts; approvals on CEQA findings and construction contracts move pipeline replacement and related capital work into procurement and implementation phases.
What’s next: Finance will submit required legislation to the Board of Supervisors to effect the CP program increase; staff will proceed with contract execution and easement negotiations for pipeline work and report back on monitoring and cost details.
