SFPUC authorizes up to $692 million in water revenue bonds to fund WESIP

The San Francisco Public Utilities Commission on the night of the special meeting authorized the issuance of up to $692 million in new water revenue bonds to finance the Water System Improvement Program (WESIP) and to reimburse settlement costs.

Todd Reitstrom, assistant general manager and chief financial officer, told commissioners the authorization would likely be split into three subseries and that staff is targeting a competitive sale in late May with a closing in June to meet mid‑June cash requirements. "Every week, between $5,000,000 and $35,000,000 is being spent for the important capital investments," Reitstrom said, underscoring the schedule pressures on financing.

Reitstrom said the bulk of borrowing—roughly $675 million—would be used for WESIP projects. He described the proposed structure as consistent with voter authorizations under Propositions A and E, and said the financing would route through the usual approvals, including the Budget and Finance Committee and the Board of Supervisors. He estimated market rates near 4.5 percent if sold in current conditions and said staff expects some tax‑exempt allocation from the state's voluntary cap program to lower costs to ratepayers.

Commissioners asked for and received additional detail on debt service and settlement financing. Reitstrom provided staff estimates that annual debt service tied to roughly $636 million of WESIP borrowing would be about $46.2 million; settlement reimbursement bonds tied to an approximate $17 million principal would add roughly $2 million in annual debt service. Reitstrom said staff would seek to size and price the sale to maximize ratepayer savings while funding urgent construction.

The commission moved, seconded and approved the authorization by voice vote. There was no public comment during the roll call vote.

What happens next

Staff will present the bond documents to the City's Budget and Finance Committee and the Board of Supervisors as part of the normal municipal finance approvals. The schedule described to the commission anticipates a competitive sale in late May and a June closing; staff emphasized that the authorization includes flexibility to upsize if market demand supports a larger sale at favorable rates.

Why it matters

The borrowing will support a multi‑year capital program whose projects include pipelines, treatment‑plant modernization and other water‑system resilience work. Reitstrom said about 84 cents of every dollar in the proposed use of proceeds would go to jobs and construction, making the financing a major near‑term driver of PUC capital activity and workforce needs.