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Advisers outline interim loans and proposed public-financing authority with Placer County
Summary
Del Rio Advisors and district counsel described interim financing options (interfund loans, direct placements, drawdown bonds) and a proposed joint-powers public-financing authority with Placer County to enable conduit debt issuance; staff said Placer agreed to act as a counterparty without fees.
Ken Dinker of Del Rio Advisors explained why interim financing will likely be needed to cover payables while the district awaits reimbursement from SRF, WIFIA or USDA programs and described options including interfund loans, public-note offerings, direct bank placements and drawdown bonds.
"Interim financing really is to overcome those cash flow deficits during a period of time in which you're waiting reimbursement and have additional project cost expenditures to go out the door," Ken said, describing how reimbursements would be applied to reduce principal over time. He noted the district had engaged Oppenheimer as underwriter and that direct placements with commercial banks were a viable option.
District counsel described forming a public financing authority (a JPA) under state law to enable conduit financing and installment-purchase agreements; Placer County has agreed to be the counterparty and, staff said, will not require representation or charge fees. The board was told staff expects to bring the JPA documents and a reimbursement resolution to the board for approval within the next one to three months.
Board members pressed for timing and asked about federal program staffing delays that have slowed WIFIA processing; staff said interim financing is a jurisdictional and market decision and that the district will seek to minimize borrowing costs by maximizing low-interest programs where available.
