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Commission approves up to $54 million SRF loan form for Sono Valley ozonation project
Summary
The commission authorized the form of an installment sale agreement for a Drinking Water State Revolving Fund loan of up to $54 million for the Sono Valley Water Treatment Plant ozonation project; staff said the loan is expected at ~1.9% interest with a 30-year term and is a partial financing of an estimated $326 million project.
San Francisco — The SFPUC approved the form of an installment sale agreement to secure Drinking Water State Revolving Fund (SRF) financing of up to $54 million for the Sono Valley Water Treatment Plant ozonation project.
Alexandra Genell, Loans and Grants Director, said the SRF program offers low-cost financing administered in California by the State Water Resources Control Board. She told commissioners the SRF drinking-water interest rate for the loan is anticipated at about 1.9% and the repayment term would be 30 years, with repayment charged to the Water Enterprise’s net revenues. Genell said the SRF program has federal requirements (environmental cross-cutters, labor and Buy America considerations) and that the loan would be a reimbursement loan — the utility incurs costs and submits expenditures to be reimbursed.
Genell said the project is estimated at roughly $326 million and that SRF would provide partial financing at the program cap; the utility’s capital-improvement program will cover the remainder. Commissioners asked about timing, interest accrual and how reimbursement draws work; staff said the State has funds earmarked in its intended-use plan and that interest payments are required prior to substantial completion for drinking-water SRF loans.
Commissioner Stacy asked why the staff report listed a $50 million loan while the approval was for up to $54 million; staff explained the larger number reflects the total amount of debt including expected interest costs. The commission approved the item on roll call.
