BOARD AGENDA MEMORANDUM
SUBJECT:Title
Receive the Financing Plan for Water Utility System and Safe, Clean Water and Natural Flood Protection Program Capital Projects, and Authorize the Payment of the Series 2006B Water Utility System Refunding Revenue Bonds.
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RECOMMENDATION:Recommendation
A. Receive the financing plan for Water Utility System and Safe, Clean Water and Natural Flood Protection Program capital project costs;
B. Authorize the payment of the Series 2006B Water Utility System Refunding Revenue Bonds from proceeds of short term debt obligations; and
C. Authorize the Chief Executive Officer and the Chief Financial Officer, or their designees, to take all actions necessary to effectuate the payment of the Series 2006B Water Utility System Refunding Revenue Bonds.
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SUMMARY:
As part of the Fiscal Year (FY) 2021-22 adopted operating budget, Santa Clara Valley Water District (Valley Water) planned for the issuance of debt to finance capital improvements in the amount of $159 million for the Water Utility enterprise and $100 million for the Safe, Clean Water and Natural Flood Protection (SCW) program. The actual timing and issuance amounts of the debt obligations will be determined depending on capital spending progress. Valley Water's strategy is to finance capital spending on a just-in-time basis through the issuance of interim short-term debt and the subsequent sale of more permanent long-term debt to refund the short-term debt. The sale of long-term debt to investors in the municipal market involves the participation of bond underwriting firms and includes different methods of sale. Board Governance Policies dictate limitations on banks that Valley Water may do business with, including bond underwriting firms.
In order to help mitigate the pressure to increase water rates, staff recommends Board approval to refund all outstanding Series 2006B Water Utility System Refunding Revenue Bonds (2006B Bonds) with short-term debt. Paying off ...
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