Sale of $240 million in wastewater revenue bonds to improve sewage infrastructure, create jobs, and save city ratepayers $88 million over the next 30 years
Today, Mayor Gavin Newsom announced the successful sale of $239,565,000 of bonds by the San Francisco Public Utilities Commission’s (SFPUC) to continue critical improvements to the City’s sewer system. As compared to the longer-term cost of borrowing assumptions, more than $88.3 million in savings will be realized over the life of the bonds sold. The bonds will fund wastewater capital improvement projects directed at increasing seismic and system reliability, reducing neighborhood flooding, and odor control improvements at facilities such as the 50-year-old aging Southeast Wastewater Treatment Plant.
“San Francisco’s continuing investment in our aging water and sewer infrastructure has provided employment for many at a time when construction jobs are scarce,” said Mayor Gavin Newsom. “The savings realized today will help stretch dollars further to fund even more critical improvements to protect public health and the environment.”
The savings gained from the bonds sold can be attributed to extremely favorable market conditions as well as improved bond credit ratings for the SFPUC issued by Standard and Poor’s (S&P). Bond credit ratings provide guidance to potential investors in debt securities such as bonds. Similar to a personal credit rating, as bond ratings increase the perceived risk to investors decreases, which results in lower borrowing costs. Moody’s and S&P are internationally recognized as two of the top credit rating providers in the world. S&P, on May 6, upgraded the SFPUC’s wastewater credit rating from A+ to AA-. Moody’s Investors Services changed the SFPUC’s rating from A2 to Aa3, following its April recalibration of municipal ratings to a global scale.