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Port Commission authorizes TEFRA hearing and approves revenue bond framework to fund pier repairs
Summary
The Port Commission approved resolutions initiating a TEFRA hearing and authorizing a revenue bond framework that would allow issuance of up to $45 million in bonds and an initial appropriation of $33.33 million to fund repairs and planning at multiple piers, including Pier 35, Pier 33 and Pier 27 cruise-terminal planning.
The Port Commission on Oct. 20 moved forward a package of revenue-bond actions and a required TEFRA hearing to fund urgent repairs and design work across several waterfront piers.
Deputy Director of Finance Tina Olson told commissioners the first planned issuance would fund $32.5 million in project costs, with an appropriation request of $33,328,779 to cover project costs, CEQA fees and issuance expenses. Olson said issuance costs are estimated at $486,568 and that the authorization sought would cap bond principal at $45 million and an interest rate no higher than 12 percent, noting the port expects a planning rate around 7.14 percent for budgeting.
Olson outlined major planned uses: $5.5 million to fumigate and make urgent structural repairs at Pier 35 (to keep it serviceable as a cruise terminal), planning and design funding for the new Pier 27 cruise terminal, office build-out and elevator work at Pier 33, a full roof replacement and planning design funds for Piers 19/23, a reduced, essential-repairs allocation for Pier 50 and roughly $8 million for backlands utilities and roadwork to support future lease pads. She said the port expects construction of some items during off seasons extending through 2012 and estimated the projects together could yield about $6.9 million a year in incremental revenue once complete.
Olson described the transaction documents before the commission: a preliminary official statement, a continuing disclosure certificate, an indenture of trust and related bond-purchase agreements. The indenture would maintain the port's existing 15 percent operating reserve and create a revenue stabilization subfund; the debt-service covenant would be set at 1.3. Olson said staff has met with rating agencies and expects ratings by Dec. 14, with pricing and closing proposed for January.
Commissioners asked clarifying questions about schedules and capacity; Olson said the staff does not plan to issue the full $45 million immediately and would return if larger appropriations were needed. After a motion and second, commissioners voted to approve the two related resolutions on the item.
The action now moves to the mayor's office for introduction to the Board of Supervisors and to the Board's Finance Committee for hearings and approval.
