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Committee approves short-term financing and MOU for Treasure Island utility repairs; analysts require 10-year plan
Summary
The committee approved items to extend the Navy cooperative agreement, establish an MOU with the Public Utilities Commission, and authorize short-term debt to finance up to $10 million in urgent Treasure Island utility repairs; analysts recommended a required 10-year financial plan and an MOU to protect the general fund.
The Budget & Finance Committee approved a package of measures (items 6–9) to address deteriorating utility infrastructure on Treasure Island and to authorize short-term financing to fund immediate repairs.
Mr. Beck, Treasure Island Director, said the cooperative agreement governing operations with the U.S. Navy dates to 1997 and that Public Utilities Commission assessments have identified “more than $40,000,000 in deficiencies” across water, electrical and wastewater systems. He described a preliminary project scope of roughly $10,000,000 in repairs — about 70% for wastewater collection and treatment, 25% for water systems and about 10% for power and gas — to be constructed over the next two to three years and refinanced with certificates of participation (COPs) at the end of that period.
Budget and legislative analysts recommended the committee approve the measures with two conditions: require TIDA to submit a 10‑year financial plan that demonstrates how it will cover COP debt service when the financing returns to the Board for official approval, and require a memorandum of understanding between the City and TIDA obligating TIDA to reimburse any general‑fund costs incurred by issuing the COPs. Analysts also noted the PUC cannot use rate‑payer funds to perform the immediate repairs and estimated that utility‑user charges might need to rise by about 33% to cover the projected debt service, with an estimated future general‑fund request of roughly $275,000 per year to subsidize rates for supportive‑housing operators.
Supervisors questioned allocation of charges between residential and commercial users; Beck said an early estimate would allocate about 56% to residential users because of higher wastewater loads but that the final split would depend on the projects selected. Committee members also pressed staff about timing of land transfer and developer responsibilities; Beck said permanent replacement of utilities will be the developer’s obligation once the Navy conveys land parcels (first conveyance expected in 2014), and acknowledged portions of the existing infrastructure will remain in service for up to a decade.
The committee moved and approved the analyst recommendations and underlying items 6–9 without opposition. Staff will return to the Board when financing documents are available; the Director of Public Finance will issue commercial paper during construction and will return later for COP issuance and formal Board approval.
