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SFPUC approves $150 million wastewater commercial-paper liquidity facility
Summary
The commission authorized the general manager to enter a liquidity agreement under 2002 Proposition E to support a $150 million wastewater commercial-paper program, renewing an expiring bank backstop and continuing short-term borrowing capacity for sewer ratepayers.
The San Francisco Public Utilities Commission on Jan. 24 voted to authorize the general manager to enter a liquidity facility for the Wastewater Enterprise commercial-paper program with JPMorgan and U.S. Bank.
Todd Reitstrom, assistant general manager and CFO, told the commission the action renews a standard backstop arrangement that supports the $150 million program and preserves a low-cost short-term borrowing tool for sewer-related cash management. He said staff ran a competitive RFP and that the proposed documents are standard for this type of financing.
Reitstrom said the commercial-paper strategy is materially less expensive for ratepayers than issuing long-term bonds immediately. "This program was originally authorized back in 02/2006... the renewal is before you today," he told the commission.
Commissioners asked about fees and the effect of market movement; staff said the renewal pricing was competitive and that an additional $150 million tranche is being coordinated with the Board of Supervisors. After questions and no public comment, commissioners moved, seconded and approved the resolution by voice vote.
The authorization keeps in place the short-term financing capacity the utility uses for contract awards and cash flow management pending further Board of Supervisors approvals for expanded capacity.
