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SFPUC authorizes up to $621 million in wastewater bonds to fund SSIP work
Summary
The Commission approved a resolution authorizing issuance of up to $621 million in wastewater revenue bonds under Proposition E to refund commercial paper and provide approximately $443 million in new money for construction; staff said the issuance would raise outstanding wastewater debt to about $1.3 billion and would add roughly $8/month to wastewater rates after a two-year capitalized interest period.
The San Francisco Public Utilities Commission voted to authorize the issuance of wastewater revenue bonds not to exceed $621 million under Proposition E to fund ongoing wastewater construction and refund short-term commercial paper.
Eric Sandler, Assistant General Manager of Business Services and Chief Financial Officer, told the Commission the transaction would be sold competitively as tax-exempt, senior-lien, fixed-rate debt, with a portion designated as green bonds. Sandler said proceeds would refund approximately $135 million in commercial paper and provide about $443 million of new money for construction, with roughly $40 million held in a capitalized interest fund to cover interest during approximately two years of construction. "This issue would represent about a doubling of the outstanding debt of the wastewater enterprise," Sandler said, adding the utility would have roughly $1.3 billion of wastewater debt outstanding after issuance.
Sandler told commissioners the 10-year financial plan includes the issuance and assumes the proposed rate path; he estimated the longer-term rate impact after the capitalized-interest period would be about $8 per month for a typical wastewater customer under the financial plan assumptions. The Commission moved and unanimously approved the resolution authorizing staff to proceed with the bond sale and to submit necessary legislation to the Board of Supervisors for authorization.
The staff schedule presented anticipated Board of Supervisors action later in the month, a bond pricing in early May and a closing in mid-May. Commissioners asked disclosure questions and were briefed on continuing disclosure obligations to investors.
