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Committee approves commercial paper authorizations for MTA and citywide program
Summary
The committee approved authorizations to establish or expand commercial paper programs: SFMTA's $100 million CP program and a citywide increase to $250 million in lease‑revenue CP certificates to finance capital projects and provide emergency liquidity, with projected first‑year fees in the low six figures and estimated interest savings versus long‑term borrowing.
The subcommittee approved two finance measures to expand the city’s short‑term borrowing capacity and to provide interim capital financing for multiple agencies.
SFMTA asked the committee to authorize a commercial paper program up to $100 million to provide interim financing for capital needs (for example, central subway, fleet procurement and other projects), supported by a revocable letter of credit and dealer/issuing documents. SFMTA Executive staff said expected all‑in fees would be roughly $600,000 per year (about $1 million in the first year) and that the CP would be repaid by future grants and long‑term takeout financings.
Separately, the Office of Public Finance asked the committee to increase the city's existing commercial‑paper certificates‑of‑participation (COP) program from $150 million to $250 million to allow broader city agency access (including smaller agencies such as the Port) and to permit emergency use when approved. Staff described a favorable market, selection of counterparties (US Bank and State Street in respective agreements), and estimated annual fees and one‑time issuance costs. The budget analyst estimated that using $160 million in CP for planned city projects over two years would yield roughly $9.9 million in minimum savings versus long‑term bond financing.
The committee approved both measures and will forward them to the full board.
