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Supervisors forward commercial paper reimbursement agreements after debate over 12% cap
Summary
The Budget & Finance Committee voted to forward a resolution authorizing reimbursement and dealer agreements for a $150 million commercial paper program and clarifying that a 12% reimbursement obligation is a statutory cap, not an assured payment. Staff said selected banks and a dealer were chosen through a competitive process.
The Budget and Finance Committee on Tuesday recommended the Board of Supervisors approve reimbursement agreements and dealer agreements to operate a tax-exempt and taxable lease-revenue commercial paper program of up to $150 million.
Nadia, a department presenter, told the committee staff selected JP Morgan and U.S. Bank as letter-of-credit providers and named JP Morgan as the commercial paper dealer after a competitive process. She said the program lets the City draw short-term commercial paper to finance interim capital work, paying interest only on amounts drawn rather than issuing long-term bonds upfront. "The 12% you're…
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