Capital Financing Plan
Fiscal Year 2025
-
26 Nikolai J. Sklaroff
Capital Finance Director
July 22, 2025
• Significant Debt Portfolio & Future Needs
• Over $10.7 billion of borrowing outstanding across all three enterprises as of June 30, 2025.
• The 10-year Capital Plan stands at approximately $11 billion, with projected revenue bond issuance totaling about $10 billion through FY2035.
• Guided by Commission Policy & Planning
• This annual Capital Financing Plan memorandum provides the Commission advance notice of planned FY 2025-26 financing transactions.
• Commission approved "Debt Management Policies & Procedures" (last updated November 2019). A comprehensive reevaluation of these policies is currently underway.
• Based on the 10-Year Capital and Financial Plan adopted by the Commission on February 11, 2025
Debt Management Overview
2 Outstanding and Anticipated Debt
• $10.7 billion outstanding debt
• This excludes: Approximately $1.8 billion of undrawn
interim funding. $212 million of undrawn Federal
WIFIA commitments. $384 million of undrawn State
SRF commitment.
• Future Debt Issuance
• The 10-year Capital Plan (FY 2025-26 to FY2035)
stands at approximately $11 billion, with projected
revenue bond issuance totaling about $10 billion
through FY2035.
3 Summary of Enterprise Debt
4 0
1 2
3 4
5 6
Water Wastewater Power
Billions ($)
Borrowing by Enterprise (as of June 30, 2025)
Commercial Paper
(Drawn)
Certificates of
Participation
State SRF Loans
(Drawn)
State SRF Loans
(Undrawn)
Federal WIFIA
Loans (Drawn)
5 *Water Infrastructure Finance and Innovation Act (WIFIA) Loans, State Revolving Fund (SRF), New Clean Renewable Energy Bonds (NCREB), Qualified Energy Conservation Bonds (QECB), Certificates of Participation (COPS)- 525 Golden Gate Ave * Undrawn Commercial Paper (CP) includes undrawn approved credit facilities that may be used as interim funding. +Includes approved amounts for reimbursement but not yet received.
Summary of Enterprise Debt
Summary of Enterprise Debt ($ Million)
As of June 30, 2025
Water Wastewater Power Total
Senior*
Public Market Revenue Bonds 4,801 3,396 279 8,476
Federal WIFIA Loans (Drawn) - 1,369 - 1,369
Federal WIFIA Loans (Undrawn) - 212 - 212
State SRF Loans (Drawn)+ 260 337 - 597
State SRF Loans (Undrawn) 169 215 - 384
Subtotal 5,230 5,529 279 11,038
Subordinate*
NCREBs and QECBs - - 3 3
Certificates of Participation 86 23 12 121
Commercial Paper (Drawn) 20 - 137 157
Commercial Paper (Undrawn) 730 750 313 1,793
Subtotal 836 773 465 2,074
Total 6,066 6,302 744 13,112
6 ^Updated ratings available from Moody’s Investors Service (www.moody’s.com), S&P Global Ratings (www.spglobal.com) and Fitch Ratings (www.fitchratings.com).
†CleanPowerSF received an A2 issuer rating from Moody’s Investors Service in December 2020, however the CleanPowerSF Program currently does not have any debt outstanding
SFPUC Credit Ratings
(June 30, 2025)
Credit Ratings (Credit Outlook)^
Moody's Investors
Service
S&P Global
Ratings
Fitch
Ratings
Long‐Term Long‐Term Long‐Term
Water Enterprise Aa2
(Stable)
AA-
(Stable) --
Wastewater Enterprise Aa2
(Stable)
AA
(Negative) --
Power Enterprise -- AA
(Negative)
AA-
(Stable)
CleanPowerSF† A2
(Stable) -- --
Capital Financing Activities
7 • Debt Issuance Projections in 10-year Plan and the Capital Finance Plan • Monitoring Enterprise spending and Commercial Paper balances • Issue new Commercial Paper, Notes, Revenue Bonds, or State and Federal Loans (ie. WIFIA and SRF), as needed
• Accommodate Budget Releases
• Work with and coordinate with internal stakeholders, as needed throughout issuance process
• Optimizing other financing tools like financings entered in collaboratively with Joint Power Authority members
New Issuance
• With the help of our financial advisors and attorneys, and in collaboration with other teams in finance, serving as financial advisors to each of our enterprises
• How and when to borrow – which facilities to use
• How individual transactions are structured to achieve lowest interest rate and lowest rate payer impact
• Refinancing and restructuring opportunities
• Strategically leveraging letters of credits, lines of credits and other tools for cash and noncash needs.
• Advocate for increased financing flexibility
Strategy
Capital Financing Activities
8 • Full and Timely Payment of Debt Service
• Payment of Letter of Credit Fees and other financing team member costs
• Compliance with Financing Covenants
• “Speaks to the Market” and Investors
• Continuing Disclosure and other regulatory compliance • Rating Maintenance
• Commercial Paper Capacity and Roll Management
• Debt Financial and Green Bond Reporting and Budgeting • Build America Bond Administration (tax credit filing) • Monitor Oversight by Revenue Bond Oversight Committee • Work with auditors and accountants
• Support Power/CleanPowerSF
•Implement new data management and technology systems
to optimize program management (Bloomberg, DebtBook,
DBC).
Debt Administration
Market Conditions
• The Fed began lowering rates in September 2024 but has paused due to persistent inflation and strong employment data.
• Current market expectation anticipates approximately two interest rate cuts totaling 0.50% by the December 10, 2025, FOMC meeting.
Tax-Exempt Interest Rates (AAA MMD) - Last 10 Years
9 0%
1%
2%
3%
4%
5%
6%
7/4/2015 7/4/2017 7/4/2019 7/4/2021 7/4/2023 7/4/2025
10 Yr AAA MMD 30 Yr AAA MMD
0%
2%
4%
6%
7/4/2015 7/4/2017 7/4/2019 7/4/2021 7/4/2023 7/4/2025
10‐year 30‐year
Taxable Interest Rates (US Treasury Rates) - Last 10 Years FY 2025-26 Capital Financing Plan
10Note: Dates and amounts are preliminary and subject to change.
Commission Action Estimated
Transaction
Size
($ Million)
Commission
Action
Closing
1. Debt Policy Update – Adopt an update
to the Debt Management Policy and
Procedures
-- Q1 FY25-26 --
2. Amend Municipal Advisor Agreements
– Approve new capacity for municipal
advisor agreements serving all
enterprises
-- Q1 FY25-26 --
3. Wastewater – Approve second loan
under the WIFIA Programmatic Master
Agreement
$272 Q1 FY25-26 Q2 FY25-26
FY 2025-26 Capital Financing Plan
11 Note: Dates and amounts are preliminary and subject to change.
Commission Action Estimated
Transaction
Size
($ Million)
Commission
Action
Closing
4. Wastewater & Power – Approve
renewal or replacement of bank credit
facilities for interim funding programs or
the Wastewater Enterprise and Power
Enterprise
Approve new bank credit facilities under
expanded authority of the Wastewater
Interim Funding program
Renew/replace
$150
(Wastewater)
(expiring April
2026) and
renew/replace
up to $250
facilities
(power)
(expiring March
2025)
Approve up to
$500 new
credit facilities
(Wastewater)
Q2 FY25-26 Q3 FY25-26
FY 2025-26 Capital Financing Plan
12 Note: Dates and amounts are preliminary and subject to change.
Commission Action Estimated
Transaction
Size
($ Million)
Commission
Action
Closing
5. Direct Purchase/Private Placement
to refund or partially refund for
mitigation of Build America Subsidy
risk and/or debt service savings –
2009 COPS (BABs), 2015 Power
Revenue Bonds, 2010B Wastewater
Bonds (BABs)
Up to $325 Q2 FY25-26 Q3 FY25-26
6. Annual Disclosure Training for
Commissioners – Annual refresher
presented with the help of the SFPUC’s
Disclosure Counsel
-- Q3 FY25-26 --
7. Financing Ordinance for updates to
Administrative Code – to be presented
through FY27-28 Budget and Financial
Plan updates
-- Q3 FY25-26 --
FY 2025-26 Capital Financing Plan
13 Note: Dates and amounts are preliminary and subject to change.
Commission Action Estimated
Transaction
Size
($ Million)
Commission
Action
Closing
8. Wastewater– Authorize Revenue Bonds
to refinance outstanding commercial
paper, deposit funds into project fund
accounts and allow new project
encumbrance.
up to $931 Q3 FY25-26 Q3 FY25-26
9. Water – Authorize Drinking Water State
Revolving Fund (SRF) execution of Loan
Agreement for the Sunol Ozone Project
$50 Q1 FY25-26 Q2 FY25-26
10.Water & Power – Authorize Corps
Water Infrastructure Financing Program
(CWIFP) execution of Loan Agreement
for various dam improvements project
Up to $615 Q4 FY25-26 Q1 FY26-27
Other Initiatives
14 • Managing Borrowing in a Dynamic Rate Environment.
o Work with municipal advisors to reassess existing and planned debt in light of a changing rate environment.
• Mitigating Risk
o Continue to mitigate risk of loss to future federal interest subsidies, as demonstrated by the refunding of outstanding Water Build America Bonds (BABs) in May 2025.
• Meeting Unique Finance Needs
o Evaluate potential capital financing options for unique capital finance needs such as energy procurement and prepayment options for the CleanPowerSF or unique financing arrangements involving third parties related to Alternative Water Supply projects for the Water Enterprise.
Other Initiatives (con't)
15 • Green Bond Program and Climate Commitment
o Expanding on existing Green Bond reports to develop additional disclosure to the marketplace regarding environmental and climate commitments.
o Work to update the Green Bond Program’s external certification process which is anticipated to be completed on FY 2025-2026 • Updating Data and Technology Systems
• Updated Debt Reporting
o Ensure timely ongoing disclosure to investors and rating agencies, maintaining compliance with covenants and timely debt service payments.
o Leveraging new data management and technology systems, including debt tracking and reporting tools to enhance efficiency. • Direct Pay Provisions of the Inflation Reduction Act 16 Questions
SFPUC's Capital Finance Analyst Team
Edward Kwong, Capital Finance Analyst,
Dan Fuchs, Capital Finance Analyst,
Eric Kwak, Debt Analyst,
Earl Dunivan, Debt Analyst
Gisele de Araujo, San Francisco Fellow
525 Golden Gate Avenue, 4th Floor
San Francisco, CA 94102
T 415.551.2973
F 415.554.1877
OUR MISSION: To provide our customers with high-quality, efficient and reliable water, power and sewer services in a manner that values environmental and community interests and sustains the resources entrusted to our care.
MEMORANDUM
Date: July 22, 2025
To: President, Kate H. Stacy
Vice President, Joshua Arce
Commissioner, Avni Jamdar
Commissioner, Steve Leveroni
Commissioner, Meghan Thurlow
Through: Dennis Herrera, General Manager
From: Nikolai J. Sklaroff, Capital Finance Director
Subject: Fis
cal Year 2025-26 Capital Financing Plan
Summary
At the beginning of each fiscal year, the Capital Finance team presents this Capital Financing Plan to the Commission for each of the four rated entities for whom we provide financing services – the Water, Wastewater and Power Enterprises and CleanPowerSF - outlining the financing activities planned for the coming year based on the 10 year financial plan and capital improvement plan adopted by the Commission each February , and as further refined by actual spending to date.
Background
Each of the San Francisco Public Utilities Commission’s (SFPUC) three enterprises – Water, Wastewater , and Power – borrows funds in the capital markets to fund a significant portion of its capital projects. To date, CleanPowerSF has only made use of credit facilities. By borrowing for these capital projects in the capital markets, the SFPUC can make payments for long-lived infrastructure assets over the many years they remain in service.
SFPUC typically pays for those assets over 25-35 years , so that the users of these assets, and not just today’s ratepayers , share in the burden of these capital costs. In this manner, we ma nage to keep rates as low as possible and manage equity by ensuring that households today do not need to pick up the full tab for assets that will be used for several generations . While each borrowing has its own interest costs, the aggregate borrowing helps us to manage the rate impact of the periodic need to build large facilities by spreading out the payments over time and allows the SFPUC to repay the debt with less valuable future dollars.
Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
The SFPUC maintains a dedicated Capital Finance team led by the Capital Finance Director and an experienced team of analysts. The Capital Finance team is part of the broader financial services team under the leadership of the Chief Financial Officer . The Capital Finance team works across all three enterprises as well as CleanPowerSF to manage both the new borrowing activity as well as to manage outstanding obligations. T he SFPUC borrows funds from very inexpensive sources. Thanks in part to a City C harter requirement that requires each enterprise to set rates sufficient to maintain a “high” bond rating, the SFPUC’s bonds are highly attractive to investors and sold at favorable interest rates and on favorable terms.
The SFPUC obtains low -cost borrowing from various advantaged sources including issuing bonds on a tax-exempt basis. When investors do not have to pay federal or state income tax on interest they earn from tax -exempt bonds, they are willing to accept a lower rate on those bonds. As a result tax exempt bonds currently carry lower yields. An investor paying a combined state and local rate of 35% , for example, would accept a 3% tax free rate instead of a
4.41% taxable rate. The SFPUC also enters into borrowing agreements with the federal government or State of California under special loan programs.
Under a new Administration and Congress in Washington, these low -cost sources of capital funding have been under threat and the Ways and Means Committee of the House had explicitly identified the elimination of tax-exempt financing as one of the tools that might be employed to pay for proposed tax cuts currently under consideration by Congress . Moreover, think tanks influential with the new Administration, such as the Heritage Foundation, and active in helping to draft proposed new legislation have also called for the elimination of tax-exempt borrowing. The Capital Finance team has worked closely with the SFPUC’s Policy and Government Affairs team in External Affairs, as well as our external partners, such as the Government Finance Officers Association (GFOA) and the Public Finance Network (PFN) of affiliated associations, to advocate for main taining the availability of these low -cost financing tools.
While the recent tax and spending bill passed by Congress and the signed by the President known as “One Big Beautiful Bill” (OBBB) made no changes to tax exemption, it did have other important impacts on the SFPUC capital program such as the roll-back of clean energy tax credits adopted as part of the Inflation Reduction Act signed by the former President and the potential to cause overall rates to rise in the future However, while tax exemption remains in tact today, the threat lingers and talk of a potential further reconciliation bill will require continued advocacy to avoid adverse impacts on our ability to borrow as tax exemption is still viewed as a potentially large “pay for” for any other needs in a reconciliation process. That the OBBB made no adverse changes to tax exempt bonds is thanks in large measure to the coordinated #builtbybonds campaign of the GFOA and PFN.
The Capital Finance team actively manages for lower debt costs by only issuing debt when needed to avoid interest costs on unneeded bond proceeds, using short-term debt to obtain low interest rates, refinancing debt when Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
opportunities are identified, and finding other innovative financing structures.
The Capital Finance team manages separate interim funding programs for each enterprise that allow the enterprise to borrow only the amount of funds needed on an interim basis at low rates, until there are enough borrowing needs to warrant issuing long-term bonds. This reduces the need to pay interest on unspent proceeds and allows the SFPUC to better leverage economies of scale on larger bond s ales which also require a substantial time commitment and effort to prepare marketplace disclosure in the bond offering document know as a Preliminary Official Statement (POS).
The Board of Supervisors approves the SFPUC’s capital spending as part of the Capital Improvement Plan adopted every two years. The authorized spending is all placed in a Controller’s budgetary reserve until the SFPUC can demonstrate it has the necessary funding availabl e. The Controller’s Office releases these budgetary reserves based on the interim funding program capacity, allowing projects to move forward.
Successful execution of the SFPUC’s Capital Plan requires an effective and efficient approach to the issuance of new financing. This annual Capital Financing Plan memorandum provides the Commission advance notice of planned FY 2025-26 financing transactions, as guided by Commission approved “Debt Management Policies & Procedures”
1. Given current volatility
in interest rates, changes in federal and state law, the dependence on financial and intergovernmental partners, and potential changes in SFPUC capital needs and priorities, we note that all information contained in this plan is preliminary and subject to change and based on the most current information available to its Capital Finance team.
As of June 30, 2025, the SFPUC has more than $10.3 billion of borrowing outstanding across all three enterprises as seen in the chart on the following page
2:
1 https://sfpuc.org/sites/default/files/about-us/policies-reports/DebtManagementPolicy_9819.pdf Last updated November 2019.
2 Note the chart excludes approximately $1.8 billion of undrawn interim funding. The $1.95 billion of interim financing capacity is used until it is retired by bonds or other long-term borrowing. As of June 30, 2025, there is a $500 million of unused authorization for the Wastewater enterprise. The chart also excludes $668 million of undrawn WIFIA commitments and $215 million of undrawn SRF commitment.
Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
0 1
2 3
4 5
6 Water Wastewater Power
Billions ($)
Borrowing by Enterprise (as of June 30, 2025)
Public Market Revenue Bonds and Notes Federal WIFIA Loans (Undrawn) Federal WIFIA Loans (Drawn) State SRF Loans (Undrawn)
State SRF Loans (Drawn) Certificates of Participation
Commercial Paper (Drawn)
The fol
lowing tables summarize the outstanding debt of each enterprise and credit ratings as of June 30, 2025:
Summary of Enterprise Debt ($ Million)
As of June 30, 2025
Water Wastewater Power Total
Senior
Public Market Revenue Bonds and Notes $4,801 $3,396 $279 $8,476 Federal WIFIA Loans (Drawn) - 1,369 - 1,369
Federal WIFIA Loans (Undrawn) - 212 - 212
State SRF Loans (Drawn) 260 337 - 597
State SRF Loans (Undrawn) 169 215 - 384
Subtotal 5,230 5,529 279 11,038
Subordinate
NCREBs and QECB - - 3 3
Certificates of Participation 86 23 12 121
Commercial Paper (Drawn) 20 - 137 157
Commercial Paper (Undrawn) 730 750 313 1,793
Subtotal 836 773 465 2,074
Total $6,066 $6,302 $744 $13,112
Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
Credit Ratings (Credit Outlook)3
Moody's Investors
Service
S&P Global Fitch Ratings
Long‐Term Long‐Term Long‐Term
Water Enterprise Aa2
(Stable)
AA‐
(Stable)
*
Wastewater Enterprise Aa2
(Stable)
AA
(Negative)
*
Power Enterprise * AA
(Negative)
AA‐
(Stable)
CleanPowerSF4 A2
(Stable)
* *
CAPITAL FINANCE PLAN INTRODUCTION
Given the size, number, and complexity of the capital financing transactions, as well as long lead times to generate the required documentation, staff develops and provides this annual capital financing plan to provide visibility to the Commission on planned capital financing activity for the coming year based on the 10-Year Plan adopted by the Commission in February 2025. This plan also serves as a planning tool for staff. Each time staff returns to the Commission for approval of a capital financing transaction, it updates plan progress.
This is the tenth annual Capital Financing Plan being presented to the Commission. Last year’s (FY2025) Plan described four capital financing transactions requiring Commission action which were completed in FY2025.
The prior plan also described two actions , the updates to the SFPUC Debt Policies and Amendments to the SFPUC’s Municipal Advisor Agreements, that will be presented to the Commission, and one transaction, the second Federal loan under the U.S. Environmental Protection Agency’s (EPA), Water Infrastructure Finance and Innovation Program ( WIFIA) Programmatic Master Agreement that will now be brought before the Commission in Q2 of FY2026 (and have now been moved into the FY26 Plan)
The completed transactions were as follows:
3 As of June 17, 2025; Updated ratings available from Moody’s Investors Service (www.moody’s.com), S&P Global Ratings (www.spglobal.com) and Fitch Ratings (www.fitchratings.com). 4 CleanPowerSF received an A2 issuer rating from Moody’s Investors Service in December 2020, however the CleanPowerSF Program currently does not have any debt outstanding.
Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
FY 2024-25 Capital Financing Plan Transactions
Commission
Action Description
Transaction Size
($ Million)
Commission
Action Closing
1. Water,
Wastewater,
and Power -
Authorize
expansion of
interim funding
program
$250- Water
$200- Power
$500- Wastewater
5 Sep-24
Ordinance
Effective Dec.
2024
Approve New bank credit facilities agreements
under the forgoing new expanded authority:
• Water
$150- Series A-4A/A-4-T Feb-25 Feb-25
$100- Series R-1/R-1-T Feb-25 Mar-25
• Power
$100- Series A-3/A-3-T Feb-25 Feb-25
$100- Series R-1/R-1-T Feb-25 Mar-25
2. Water -
Authorize
Revenue Bonds
to refinance
outstanding
commercial
paper, deposit
funds into
project fund
accounts and
allow new
project
encumbrance.
Up to $762
(Commission approved
up to $447 at its 5/27
meeting)
Q4 FY24-25 Q4 FY24-25
5 Remains unutilized; see planned use in FY 2026 plan.
Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
3. Wastewater –
Authorize Clean
Water State
Revolving Fund
(SRF) execution
of Loan
Agreement
$160 Q2 FY24-25 Q4 FY24-25
4. Water - Approve
renewal or
replacement of
bank credit
facilities for
interim funding
programs
Up to $100 Q3 FY24-25 Q3 FY24-25
The SFPUC, advised by its financial and legal advisory team s, also took advantage of market opportunities to generate savings for ratepayers by lowering the interest rate on future debt payments:
• Water Refunding. To take advantage of refinancing opportunities based on the structure of the SFPUC’s outstanding debt and prevailing interest rate conditions , in March 2025 the Commission authorized up $1.9 billion of Water Revenue refunding par through a current refunding and a tender refunding process. The total iss ued par amount for the 2025 Water Revenue Bonds Series ABC was $523,435,000. The gross savings of the combined refundings was $56 million or $ 42.4 million on an NPV basis or 7.2% of the refunded bonds. The transaction closed in April 2025.
• Additional Water Refunding In conjunction with the issuance of the Water Enterprise’s new money revenue bonds described in last year’s plan, the SFPUC also concurrently authorized $1.056 billion to refund outstanding Water Revenue Build America Bonds (BABs).
The results of that transaction were presented to the Commission at its June 24, 2025 meeting. In addition to mitigating the risk due to Federal Sequestration of the BAB subsidy, the strategy generated nearly $2 million of annual cash flow savings through 2041 or more than $39 million in total , although the refunding was nearly break- even on a net present value basis and was motivated by risk mitigation, not savings.
• Wastewater WIFIA Draw. In March 2025, the SFPUC completed the acceleration of three draws, including two draws totaling $298 million at an interest rate of 1.45% on its existing WIFIA loan agreements for the Biosolids Digester Facilities Project and the Southeast Treatment Plant Improvement Project (Headworks) and $158 million at an interest rate of 3.65% for various wastewater projects funded by the Project Loan 1 agreement under the WIFIA Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
Master Agreement. These draws were accelerated to mitigate any potential risk of delay or disruption of these amounts based on changes underway in the Federal Government at the U.S.
Environmental Protection Agency (“EPA’) in particular.
• Direct Pay Tax Credits. In November 2024 the SFPUC working with financial, legal and tax advisors and working with the Controller’s office, filed for over $744,750 of Inflation R eduction Act (IRA) Tax Credits ( for both Commercial Clean Vehicle Credits and Investment Tax Credits) . SFPUC’s tax credit filing was part of a single filing by the City. In aggregate (including the SFPUC) the City is filing for $445,000 of Commercial Clean Vehicle credits on 55 vehicles. No other department filed for Investment Tax Credits. As a result, the SFPUC accounted for $744, 750 of the $1,107,250 of City wide tax credits or 67.2%. In addition to the CY 2023 filing made in December, the SFPUC participated in an additional filing for CY 2024 in May 2025. For CY 2024, the SFPUC accounted for $37,500 of Commercial Clean Vehicle Credits of the $4,372,943 City wide tax credits filing. The recently approved OBBB substantially rolls back the tax credit program under the Inflation Reduction Act and the future of the program remains highly uncertain. In the meantime, our advisors are hopeful that the United States Department of Treasury will honor these tax credit filings and we will continue filing for such tax credits as long as we have eligible projects..
FY 2025-26 CAPITAL FINANCING PLAN
The new FY 2025-26 Capital Financing Plan has been developed amid continuing volatility caused by federal policy actions and speculation about future interest rate dynamics . The rate environment remains elevated as illustrated in this graph comparing current conditions against rates from a year ago:
AAA MMD Rates in the Last 10 Years
0%
2%
4%
6%
6/5/2015 6/5/2017 6/5/2019 6/5/2021 6/5/2023 6/5/2025
10‐Year
30‐Year
Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
US Treasury Rates in the Last 10 Years
Although the Fed began to lower rates in September 2024 , it paused due to persistent inflation as well as a relatively strong employment data in addition due to economic uncertainty caused in part by executive policy actions . The Fed Funds Rate - the target interest rate set by the Federal Reserve at which commercial banks borrow and lend their extra reserves to one another overnight stands at a range of 4.25% to 4.50 % today 6 and current market expectation is approximately two interest rate cuts totaling .50% by the December 10, 2025 FOMC meeting7. The Capital Finance team will work with its advisory team to continue to adapt debt management plans amid this rapidly shifting market to try to achieve optimal ratepayer outcomes with respect to both borrowing rates and the investment of bond proceeds.
6 FederalReserve.gov
7 Bloomberg as of July 10, 2025
0%
1%
2%
3%
4%
5%
6%
7/04/2015 7/04/2017 7/04/2019 7/04/2021 7/04/2023 7/04/2025 10‐year 30‐year
Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
This Memorandum sets forth the Capital Financing Plan for FY 2025 -26 based on capital needs outlined in the 10-Year Financial Plan presented to the Commission at its February 11, 202 5 meeting. Based on further updates to spending and encumbrance needs, the plan calls for the SFPUC to procure up to $500 million of new credit facilities for the Wastewater Enterprise based on expanded authorization passed by the Board of Supervisors and the Mayor last fall; issue new revenue bonds for the Wastewater Enterprise; execute one new State Revolving Fund (“SRF”) loan agreement for the Water Enterprise; renew, replace, or amend a bank credit facility supporting the Wastewater Enterprise; renew, replace, or amend two bank credit facilities supporting the Power Enterprise; enter in to a second loan under the Wastewater Enterprises Programmatic WIFIA agreement with the USEPA; enter in to a direct purchase, private placement or other financing agreement to re -finance all or portions of the following if advantageous for the SFPUC : 2009 Certificates of Participation (Build America Bonds —BABs), 2015 Power Revenue Bonds , and Wastewater 2010 Series B (BABs); and enter into a Corp Water Infrastructure Financing Program (CWIFP) loan agreement to fund certain dam improvement projects for the Water and Power Enterprise . The proposed capital financing transactions can be categorized as follows:
A. New Money/Credit Needs – By policy, the SFPUC finances each respective enterprise capital plan through a combination of cash and debt financing, including the issuance of bonds, notes, and loans . New expenditures are typically financed first with interim financing, such as commercial paper. The interim financing program also allows each enterprise to enter additional contracts in reliance on the availability of commercial paper to fund budget appropriation releases. Based on the 10-Year Capital Plan, the additional commercial paper capacity will support the financing needs of the enterprises. (transaction #4 in the table on page 13)
Periodically, the SFPUC enters the debt market to raise funds through the issuance of bonds or notes for “new money” capital needs, or to secure borrowing from State and Federal programs or through bank facilities. The Wastewater Enterprise is anticipated to require additional new money borrowing in FY 2025-26, based on the 10-Year Capital Plan (transaction #8 in the table on page 13) however the Capital Finance team will closely monitor actual project spending and will only proceed with a bond sale when appropriate based on encumbrance and spending needs and borrowing conditions.
B. Administration of Existing Debt Portfolio – Once issued, SFPUC bond transactions require substantial maintenance to ensure the investors, rating agencies , letter of credit banks and other creditors are receiving timely on-going disclosure, to ensure the SFPUC is complying with covenants in the respective financing documents and to ensure debt service and all associated fees are paid on time. This maintenance includes ongoing disclosure training to the Commission. The SFPUC’s debt portfolio also includes a very active interim financing program consisting of a combination of commercial paper issuance and revolving lines of credit. This program requires renewal or replacement of existing bank credit facilities or other forms of interim funding supporting the Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
interim funding programs of the Water, Wastewater and Power Enterprises. Please note that while bonds are typically issued for terms of 25-30 years, interim funding is outstanding for a much shorter period.
This results in lower, but more volatile interim financing rates and more administrative burdens . The SFPUC currently has 16 separate credit facilities consisting of Letters of Credit, Liquidity Facilities and Revolving Credit Agreements as part of the Interim Financing Program in addition to one credit agreement for CleanPowerSF. The SFPUC is continuously issuing and remarketing commercial paper notes, typically with terms of from 30 to 90 days (although terms of 1 to 270 days are possible) , to take advantage of low-cost interim financing.
We are also continuously evaluating market conditions and current plans to ensure the lowest cost of financing possible for the rate payer .
To do this, the SFPUC maintains agreements with registered municipal advisors and consult s with them even between actual financing transactions for recommendations on best practic es and trends in the marketplace.
C. Market Opportunities – Municipal bonds, including the SFPUC’s, are typically issued with serialized maturities. For example, a 30-year bond may be issued with as many as 30 different annual maturities with interest typically slightly higher on each successive maturity. As time passes – even without any changes in market interest rates – bonds can typically be refinanced for savings before maturity with few original bonds remaining outstanding for the full original term all else equal .
Additionally, bond interest rate changes may afford the SFPUC even greater opportunities to refinance debt to achieve debt service savings.
The Capital Finance team, with the assistance of its external legal and municipal advisors, and based on ideas presented by investment banks – including those serving in the Controller’s prequalified bond underwriting pool - continues to monitor the SFPUC’s debt portfolio to execute potential refinancing transactions within the constraints established under the existing obligations , prevailing tax law and SFPUC debt policy . These obligations are brought to the Commission for approval to be issued on either a tax exempt or taxable basis to provide the optimal refinancing results . For example, in March 2025, staff presented a previously unplanned refunding opportunity to the Commission for approval in conjunction with the sale of new money bonds, based on a market opportunity that created a refunding opportunity that was not in the original FY 2024-25 Capital Financing Plan. As a result of taking advantage of that opportunity, the SFPUC was able to achieve approximately $56 million of future budgetary savings on those bonds , thereby reducing debt service to be paid by water ratepayers in the future.
Staff also recommended to the Commission a refunding of outstanding Build America Bonds for its Water Enterprise that resulted in $39 million of cashflow savings (annual savings of just shy of $2 million per year through FY 2041) with a slight dissavings of -$572k or -0.09% when calculated on a net present value (NPV) basis to account for the release Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
of a previously funded debt service reserve fund that would have otherwise released in FY 2041 . In addition to the incidental cash flow savings, the refunding was motivated pri ncipally by the desire to eliminate nearly half (by outstanding par) of the SFPUC’s exposure to the risk for bonds that receive federal interest subsidies known as Build America Bond subsidies.
Financing a Large Capital Program amidst Volatile Market The key driver of the Capital Financing Plan is the SFPUC’s capital improvement plan across all three enterprises, and our efforts to mitigate the cost of these capital needs on ratepayers . The 10 year Capital Plan stands at approximately $11 billion, with projected revenue bond issuance totaling about $10 billion through FY2035 as of the 10-year Capital Plan and 10-year Financial Plan approved February 11, 2025. One of the ways we manage borrowing costs is by borrowing bonds only when needed and leveraging our interim financing in the meantime. This has required the expansion of our interim financing program which the Commission approved in Fiscal Year 2025.
The Commission approved additional credit facilities of $250 million and $200 million for Water and Power Enterprise, respectively, under the new expanded authority in Fiscal Year 2025, and we plan to propose additional credit facilities for the Wastewater Enterprise in Fiscal Year 2026 based on $500 million of as- yet-unutilized authorization. We anticipate using at least half this expanded wastewater capacity in FY 2026.
As our team explores new and innovative financing programs like investment tax credits, joint powers authority borrowing, new federal loan programs , securitization and other innovative approaches to financing our Alternative Water Supply Program, and to assist CleanPowerSF, in addition to the growing needs of our overall borrowing program, this has required additional advisory resources, including municipal advisors, bond attorneys and in-house staff.
Our plan envisions building each of these resources in the coming year.
Guided by the latest revisions to the Commission-adopted 10-Year Capital and Financial Plans, as well as internal capital financing modeling tools and spending projections provided by each Enterprise, the transactions in the table below include a description of the proposed transaction, approximate size, and the projected timing of Commission action and transaction closing.
It is important to highli ght that all amounts and dates are preliminary and subject to change, based on needs of each enterprise and market conditions.
Detailed descriptions of the transactions are provided in the following section.
Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
FY 2025-26 Capital Financing Plan8
Commission Action Estimated
Transaction Size
($ Million)
Commission
Action
Closing
1. Debt Policy Update - Adopt an
update to the Debt Management
Policy and Procedures
-- Q1 FY25-26
--
2. Amend Municipal Advisor
Agreements – Approve new
capacity for municipal advisor
agreements serving all
enterprises
-- Q1 FY25-26 --
3. Wastewater – Approve second
loan under the WIFIA
Programmatic Master
Agreement
$272 Q1 FY25-26 Q2 FY25-26
4. Wastewater and Power -
Approve renewal or
replacement of bank credit
facilities for interim funding
programs and
Approve new bank credit
facilities under expanded
authority of the Wastewater
Interim Funding program
Renew/replace $150
(expiring April 2026)
and up to $500 new
facilities (Wastewater)
Renew/replace up to
$250 facilities (Power)
(expiring March 2026)
Q2 FY25-26 Q3 FY25-26
5. Direct Purchase/Private
Placement to refund or
partially refund for mitigation
of Build America Subsidy risk
and/or debt service savings:
- 2009 COPS (BABs)
- 2015 Power Revenue Bonds
and/or,
- 2010B Wastewater Bonds
(BABs)
Up to $325 Q2 FY25-26 Q3 FY25-26
6. Annual Disclosure Training
for Commissioners-
-Annual refresher presented
with assistance of the SFPUC’s
Disclosure Counsel
-- Q3 FY25-26 --
8 Dates and amounts are preliminary and subject to change.
Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
7. Financing Ordinance for
updates to Administrative
Code
-to be presented through FY27-
28 Budget and Financial Plan
updates
-- Q3 FY25-26 --
8. Wastewater- Authorize
Revenue Bonds to refinance
outstanding commercial paper,
deposit funds into project fund
accounts and allow new project
encumbrance.
up to $931 Q3 FY25-26 Q3 FY25-26
9. Water – Authorize Drinking
Water State Revolving Fund
(SRF) execution of Loan
Agreement for the Sunol Ozone
Project
$50 Q1 FY25-26 Q2 FY25-26
10. Water/Power- Authorize Corps
Water Infrastructure Financing
Program (CWIFP) execution of
Loan Agreement for various
dam improvements project
Up to $615 Q4 FY25-26 Q1 FY26-27
TRANSACTION DESCRIPTIONS
The following describes the planned capital financing transactions:
1. Debt Policy Update - Q1
The SFPUC’s Capital Finance Program, including the issuance of new obligations and management of existing obligations, is governed by a comprehensive set of Debt Management Policy and Procedures (available at https://sfpuc.org/about-us/reports/debt-management-and-disclosure- reports). T he primary policies are the SFPUC Debt Management Policy and Procedures which was last updated November 2019. In view of significant changes in the market since 2019, significant changes in SFPUC personnel and the SFPUC’s intervening experience with all three enterprises issuing debt, the Capital Finance Team has been undertaking a comprehensive reevaluation of the policies. This effort has been supplemented by dedicated staffing including a San Francisco Fellow, Gisele de Ar aujo, who has coordinated the review and update of the policies over the past year and worked closely with the Capital Finance team, municipal advisors, and other members of the financing team to incorporate the best practices of industry organizations and agencies (such as the Government Finance Officers Association (GFOA) and California Debt and Investment Advisory Committee (CDIAC)) as well as the policies of other highly-rated peer agencies.
Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
2. Amend Municipal Advisor Agreements - Q1
As the volume and complexity of the SFPUC’s financings has grown, and the Capital Finance team has explored new opportunities for savings – including tax credits, securitizations, refinancings , alternative structures for the alternative water supply project s, the SFPUC has been exhausting its contractual capacity for municipal advisor y and other professional services.
The Commission will be asked to approve proposed amendments to existing professional services contracts for Municipal Advisory services for new capacity in the first Quarter of FY 2025-26. These amendments would allow for continued professional services for each enterprise due to the substantial increase to the 10-Year Capital Plans as well as new financing and re-financing opportunities and serve as a bridge until the SFPUC’s next formal solicitation for Municipal Advisory services is finalized, which is now being accelerated but is anticipated to take 12 -18 months. The prior agreements concluded in early 2022 had been anticipated to last for five years , but had not envisioned the full scope of services undertaken in the meantime under a new Capital Finance Director and a sharply increased CIP.
3. Approve Second WIFIA Loan under the Programmatic Master Agreement, Wastewater – Q2
The Commission will be asked to approve an up to $272 million loan agreement with the U.S. Environmental Protection Agency (EPA) under the federal Water Infrastructure Finance and Innovation Act (WIFIA) of 2014 in the second Quarter of FY 2025-26. In April 2023, the SFPUC authorized the Master Agreement to finance certain projects under the Wastewater Capital Plan Resilience Program in an amount not to exceed $792 million and the first project under such program in an aggregate initial principal not to exceed $370 million. Each subsequent loan needs further approval by the Commission. The loan agreement is expected to close the second quarter of FY 2025-26.
4. Approve Renewal or Replacement of Bank Credit Facility for the Wastewater and Power Interim Funding Program and new credit facilities for the Wastewater Enterprise – Q2
The Commission will be asked to approve the renewal or replacement of expiring credit facilit ies for the Wastewater Enterprise and Power Enterprise Interim Funding Programs in the second Quarter of FY 2025-26. The expiring credit facilities are as follows:
• Wastewater Series A -2: $150 million, Letter of Credit with Bank of America, Expiring April 2026
• Power Series A-1: $125 million, Letter of Credit with Bank of America, Expiring. March 2026
• Power Series A-2: $125 million, Letter of Credit with Bank of America, Expiring. March 2026
Additionally, the Commission will be asked to approve up to $500 million in new credit facilities for the Wastewater Enterprise Interim funding program relying Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
on expanded authority approved by the Commission in September 2024 and effective after the Mayor’s approval in December 2024.
The SFPUC plans to seek proposals through competitive solicitation processes from a pre-qualified pool of bank credit facility providers. The solicitations will be for the renewal or replacement of the expiring credit facilities. The credit facilities may be either letters of credit or liquidity facilities that support a commercial paper program, or direct bank loans (i.e., revolving credit agreements). Depending on the proposals received, and optimi zation of Controller’s reserve releases vs. expenditures, SFPUC may not procure the full $500 million of new credit facilities for which there is remaining Board of Supervisors authorization.
5. Direct Purchase/Private Placement – Q2
In J une 2025, the SFPUC solicited firms in the City’s approved “Underwriter Pool” currently maintained by the Controller’s Office and the City’s “ Credit Facility Pool” currently maintained by the Airport, for proposals to refund all or portions of certain outstanding debt transaction s in the SFPUC’s debt portfolio, including: 2009 Certificates of Participation, Series D ( approximately $120 million), 2015 Power Revenue Bonds, Series A ( approximately $32 million), and 2010 Wastewater Bonds, Series B (approximately $170 million). While the SFPUC enjoys favorable public market access as a highly -rated and frequent issuer of re venue bonds and will often take advantage of the efficiencies of including opportunistic refundings with its new money bond issuances, the long lead times and dedication of staff and financing team resources for comprehensive primary disclosure for small stand-alone transactions is relatively inefficient. Though s oliciting pre-qualified firms and transacting with them directly may result in the incurrence of a modest premium not present on comparable public market transactions, the ability to reduce the time needed to secure interest rates is increasingly valuable in an environment where, weekly (even daily) interest rate moves triggered by current events caused can far exceed additional costs of a direct placement transactions.
6. Annual Disclosure Training for Commissioners — Q3
Annual refresher on the disclosure responsibilities for municipal issuers of debt presented by the SFPUC’s Dis closure counsel in coordination with the Capital Finance team and the City Attorney’s Office.
7. Approve Proposed Financing Ordinance for updates to Administrative Code -- Q3
Staff is working with the City Attorney’s office to propose possible updates to be introduced to the Board of Supervisors for consideration that would allow for additional flexibility and efficiency for SFPUC in execution and administration of its capital financing programs. Among the updates being considered at this time include the use of commercial paper and other forms of short-term indebtedness to refund other “debt or obligations” of the Commission, in Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
anticipation of the issuance of revenue bonds or other long-term indebtedness , and consolidation of refunding authorization into the administrative code as opposed to biennial ordinance updates.
8. Authorize Revenue Bonds for Wastewater Enterprise – Q3 The Commission is expected to be asked to approve up to $931 million Wastewater Revenue bond transaction in the third Quarter of FY 2025-26. The transaction will refund outstanding commercial paper providing interim funding of the W astewater Enterprise’s capital improvement program, deposit funds into project fund accounts and allow new project contract encumbrance. Sale of the bonds is expected to close in the third Quarter of FY 2025-26. The sizing and timing of this financing will be influenced by actual s pending, reserve release requests from project teams and the size and timing of the interim credit facilities expected to be closed during the Fall.
9. Approve SRF Loan Agreement for Water Enterprise – Q1
It is anticipated that the Commission may be asked to approve an Installment Sale Agreement with the State Water Resources Control Board (SWRCB) for a low-cost Drinking Water State Revolving Fund (SRF) loan for the Sunol Ozone project within the Water Enterprise estimated to total $50 million with final loan amount subject to review and negoti ation with the SWRCB on eligible project costs allowable for SRF funding.
The loan is expected to be 30-year fixed rate loans, with the interest rate set by the SWRCB near the time of loan execution. The loan will be payable from the net revenues of the Water Enterprise and will be secured on a parity lien basis with the Water Enterprise’s outstanding revenue bonds, the existing Clean Water SRF loan and Drinking Water SRF loan that the Water Enterprise has entered into with the SWRCB since 2017.
10. Approve CWIFP Loan Agreement for Water/Power Enterprise – Q4 The Commission may be asked to approve up to $615 million Corp (US Army Corp of Engineers) Water Infrastructure Financing Program (CWIFP) L oan to fund up to 80% of dam improvement projects in the Water and Power capital improvement program. The SFPUC has been invited to submit a final loan application by September 2025 and the agreement will be brought to the Commission for consideration as soon as 4 th Quarter of FY2026, with closing expected in FY2027. The timing will depend on successful approval of our application, negotiation of terms and our suc cess with our on-going effort to secured legislation to allow such loans to be fully subordi nate to our ex isting debt.
Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
OTHER INITIATIVES
In FY 2025 -26 the Capital Financing Team also expects to work with its financial advisors and/or legal advisors on the following initiatives , which may produce the need for further Commission review in FY 2025-26 and beyond:
• Managing Borrowing in a Dynamic Rate Environment.
The Capital Finance team continues to work with internal stakeholders and its municipal advisors to assess the management of the debt program considering the dynamic and sometimes volatile rate environment, including reevaluating how to reinvest unexpended bond proceeds, how to manage interim financing including through recent inverted yield curve episodes , and how to most efficiently support Controller Budget releases for encumbrances.
Some of these options may include additional Debt Policy changes , updates to administrative code, or introduction of new financing products to be brought to the Commission for approval.
• Mitigating Risk
In May 2025, the Commission approved up to $1.056 billion to refund outstanding Water Build America Bonds (BABs), Series 2010B, 2010E, and 2010G as part of strategy to mitigate risk of loss to future interest subsidies paid by the federal government due to sequestration. As presented to the Commission on June 24, 2025, the SFPUC was able to refund all outstanding 2010B bonds and 2010E bonds with the issuance of its 2025 Series F refunding bonds with very minor Net Present Value dissavings (based on the value of the release of the debt service reserve fund) of (-0.09%), but with strong positive annual cash flow savings of nearly $2 million each year totaling $39 million through FY 2041. Under the Commissions original authorization for the refunding, the SFPUC has until approximately September 2025 to refund outstanding 2010G bonds should they result in savings similar to those generated by 2025 Series F. Staff will keep the Commission updated if that transaction is able to move forward. As discussed herein, the Capital Finance team is also working to mitigate the risk of Federal Build America Bond subsidies on debt service paid for Certificates of Participation issued by the City (but repaid by the SFPUC) to fund 525 Golden Gate Avenue and for Build America Bonds issued by the wastewater enterprise, either as part of a direct purchase or in conjunction with the issuance of new money wastewater bonds.
• Meeting Unique Finance Needs
In addition to the funding needs listed in this plan, the Capital Finance team is engaging municipal advisors, tax counsel and other subject matter experts to assist in evaluating potential financing options for unique capital finance needs. For example, the Capital Finance team has engaged municipal advisors to evaluate and educate City stakeholders on potential energy procurement and prepayment options to help CleanPowerSF to potentially help optimize its power supply costs through bond financed prepayments. In addition, the Water Enterprise produced a detailed report of specific Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
alternative water supply (AWS) projects. Many of these projects may rely on unique governance structures which in turn require unique financing arrangements involving third parties (such as Joint Powers Authorities) and as such the Capital Finance team will be working with its municipal advisors to ensure that such arrangements not only deliver financing at the most favorable available rates, but also do so without negatively impacting the SFPUC’s core financing programs or credit ratings. The capital finance team is also exploring unique financing structures to reduce costs or fund new types of projects. Any new proposed financings would be thoroughly vetted and presented to the Commission for consideration and approval.
• Green Bond Program and Climate Commitment
Since the SFPUC issued its first Green Bond in 2015, market and regulatory changes have prompted an evaluation of how the SFPUC can enhance its Green Bond Program. In FY 2023-24, the Capital Finance team initiated work to update the program’s external certification process and anticipates this work to be completed in FY 2025-26. Some of these changes may include policy updates to be brought to the Commission for approval engagement of additional specialists through Request for Proposals, and development of additional disclosure to the marketplace by updating or expanding on the Green Bond reports currently produced by the Capital Finance team. We are exploring these changes in coordination with our External Affairs team.
• Updating Data and Technology Systems
As the Commission is aware, the SFPUC adopted its largest ever Capital Improvement Plan which projected over $10 billion in projected additional par of revenue bond issuances by FY 2034-35. The Capital Finance team has initiated work to evaluate new data management and technology systems to ensure that the SFPUC builds internal capacity to efficiently manage this program. Some of these have leveraged the City’s Technology Marketplace and the Capital Finance has completed, or is in the process of completing, procurements of Bloomberg (financial data), DebtBook (debt tracking and reporting tools) and DBC (specialized bond structuring software currently employed by our municipal advisors and underwriters). Such procurements have been funded from cost savings and carry forwards.
• Updated Debt Reporting.
Leveraging these new technologies, the Capital Finance team is also beginning the process to develop new reporting of our capital program for both internal and external audiences, such as rating agencies, investors, credit banks and financial intermediaries. With the sunset of the Revenue Bond Oversight Committee at the end of CY 2024, the SFPUC’s Audit Bureau is planning new, even more robust auditing and oversight of the capital program spending. Similarly, with the sunset of the RBOC which produces its own Annual Debt Report, the Capital Finance team will be able to now produce more robust and informative annual reporting designed by SFPUC staff and our advisors that is more responsive to capital market needs.
Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
• Direct Pay Provisions of the Inflation Reduction Act
Although the outlook for continued Direct Pay tax credit opportunities based on the prior federal administration’s Inflation Reduction Act (IRA) is now grim, staff will continue to coordinate with its tax credit, municipal and legal advisors and other filing departments through the Controller’s office to claim any credits for completed projects which are available and continue to engage with the SFPUC’s municipal advisors, counsel , and accountants to evaluate potential capital financing opportunities created by IRA for as long as the tax credits do remain available.
Acknowledgements, Staffing and Support
Such a year of accomplishments and ambitious plans for the year ahead are only possible thanks to the dedicated analysts who make up the Capital Finance team 9. This lean team of enthusiastic and knowledgeable analysts make it possible for us to not only do the exciting and very public work of bringing billions of dollars of borrowing to the financial markets to help build our capital infrastructure while reduc ing the rate burdens on our rate payers, but they also do the larger body of unsung work – work that ranges from the processing of hundreds of invoices each years for everything from tiny credit facility amendment fees, to rating agency, dealer fees and legal fees, to making sure our semi -annual debt payments are made on time and in full and our credit facility payments are made on the many banks facilities employed across four SFPUC entities . Each of our bank counterparties, our federal and state counterparties, bond rating agencies and the investors who buy and own our bonds, require a steady diet of information about the SFPUC’s four credits and our interim financing program is always humming out of view, with the rolling of commercial paper and renewal of short term bank facilities, ensuring the SFPUC has access to credit capacity to release contracts and short term funds. Moreover the maintenance of our high ratings has not only required regular reporting, but also period in-depth meetings and presentations responsive to evolving rating agency concerns and changes in rating criteria.
Moreover the work of our Capital Finance team would not be possible without the collaboration of our financial services team, enterprise staff, City Attorney ’s Office and our deep bench of outside advisors and financial partners.
CONCLUSION
We hope the Commission finds this summary of proposed financing activities, and the expected schedule for proposed Commission review and approval helpful. We look forward to addressing any questions you may have during the July 22, 2025 Commission meeting.
9 I would like to thank our team including Edward Kwong, Capital Finance Analyst; Dan Fuchs, Capital Finance Analyst; Eric Kwak, Debt Analyst; Earl Dunivan, Debt Analyst; and, Gisele de Araujo, San Francisco Fellow
Memo: Fiscal Year 2024-25 Capital Financing Plan
July 22, 2025
cc: Nancy L. Hom, Chief Financial Officer, and Assistant General Manager, Business Services
Laura Busch, Deputy CFO
Vivian Chen, Deputy CFO
Anna Duning, Budget Director
Erin Corvinova, Financial Planning Director
Trey Hunter, Capital Budget Manager
Alexandra Gunnell, Loans and Grants
Katherine Ortega, Deputy City Attorney