Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Wesiip Financing topic
No spam. Unsubscribe anytime.
SFPUC authorizes $1.12 billion in water revenue bonds to fund WESIP
Summary
The San Francisco Public Utilities Commission authorized issuing up to $1.12 billion in water revenue bonds under Proposition A and directed staff to seek additional Proposition E authority to fund the Water System Improvement Program (WESIP); staff outlined planned bond sales, uses of proceeds and tax‑exempt/taxable allocations.
The San Francisco Public Utilities Commission on June 23 approved authorization to issue up to $1.12 billion in water revenue bonds under Proposition A and directed the general manager to pursue related Proposition E ordinance steps at the Board of Supervisors to fund the Water System Improvement Program (WESIP).
Todd Wiestrom, chief financial officer and assistant general manager for business services, told commissioners the plan calls for two sales in late summer to meet encumbrance needs and to fund near‑term cash requirements. "We're targeting August and September particularly to meet our encumbrance needs, for the WESIP," Wiestrom said, describing a two‑sale approach intended to dollar‑cost‑average interest costs and borrow only when cash is needed.
Wiestrom said the August/September sales would total roughly $747.5 million and be structured as 30‑year, fixed‑rate bonds with a 10‑year call provision. Proceeds would be used to refund commercial paper, fund the first half of fiscal 2010 cash needs for WESIP projects, establish required bond reserves and capitalized interest accounts, and finance project costs. He emphasized ongoing work to minimize any taxable portion of the financing and noted some project spending may need to be issued on a taxable basis under federal tax rules.
The presentation included an explanation of tax‑exempt versus taxable allocations under IRS rules and options such as issuing short‑term taxable commercial paper for small taxable portions. Wiestrom told the Commission it had met disclosure and due‑diligence requirements, including review with bond counsel, disclosure counsel, the City Attorney’s Office and financial advisors.
Commissioners asked for clarifications on the city’s enterprise fund credit, bond call provisions and how taxable slivers would be managed. Wiestrom said the PUC’s enterprise funds are self‑supporting and the issuance would not rely on a general‑fund pledge. He also noted projected peak debt service for the program and that quarterly updates will revisit issuance strategy.
After discussion, a motion to approve the financing documents and delegate authority to the general manager to complete transactional steps carried on a voice vote. The Commission will receive updated official statements and related documents before sales proceed and expects to return for approvals tied to later sales and any material changes.
