1 Nikolai J. Sklaroff,
Capital Finance Director
July 28, 2026
Non-Financing Bank Credit
Facility Agreements
Context
2 • The California Department of Fish and Wildlife (CDFW) has long required the SFPUC Water Enterprise to maintain a security, commonly known as a Standby Letter of Credit (LOC).
• The SFPUC currently holds 11 Standby LOCs with Bank of America, N.A. and expects to enter additional Standby LOCs for current or future capital projects needing a permit from CDFW.
• Standby LOCs are not financing credit facilities part of the Interim Funding Program used to finance capital projects
• Standby LOCs are just one component of CDFW compliance requirements necessary for the regular operation the SFPC Water Enterprise
Existing Standby LOCs
• Annual fees for each Standby
LOCs range from approximately
$2,000 to $180,000 per facility for
a total of approximately $405,000.
• Fees are funded as a non-capital
expenditure.
• No material impact on budget or
finances of the Water Enterprise.
• Standby LOCs have never been
drawn.
• SFPUC is aware of the need for a
future Standby LOC
Existing Standby LOCs
for benefit of CDFW
Standby
LOC
Amount
Project Name
$677,000 Crystal Springs/San Andreas
Transmission Upgrade
515,985 Sunol Valley Water Treatment Plant
896,400 Alameda Creek Diversion Dam
Project
2,320,750
Lower Crystal Springs Dam
Improvement Project – Fountain
Thistle Mitigation Project
2,694,000 New Irvington Tunnel
2,807,457 Lower Crystal Springs Dam
593,215 San Joaquin Pipeline No. 4 Eastern
Segment Project
12,100,000 Calaveras Dam Replacement
Project
29,523,476 Calaveras Dam Replacement
Project
54,700 Sunol Pit F3
667,090 Alameda Creek Recapture Project
3 Proposed Delegation
• Allow the General Manager or designee to
enter, amend or administer existing and future
standby LOCs as necessary for compliance
with a CDFW permit.
• Authority limited to aggregate annual fees less
than $2 million.
4 5
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
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
DEPARTMENT: Financial Services AGENDA NUMBER: 11 MEETING DATE: July 28, 2026
Calendar: Regular Calendar
Project Manager: Nikolai J. Sklaroff
Authorize the General Manager to Enter, Amend, or Administer Standby Letters of Credit as Security for California Department of Fish and Wildlife Permits
Summary of Proposed
Commission Action:
Authorize the General Manager to enter, amend, or
otherwise administer non-capital financing standby letters of credit as required security for California Department of Fish and Wildlife permits.
Background: The San Francisco Public Utilities Commission ( SFPUC) Water Enterprise, in its performance of various capital projects, must obtain permits from the California Department of Fish and Wildlife (CDFW) when such projects will impact endangered species and their habitat . CDFW requires
security to assure performance of the permit obligations. The standard security is commonly known as a standby letter of credit (Standby LOC). The annual fee to maintain a Standby LOC is funded as a non- capital expenditure. The bank would pay out the security on
ly in the event that SFPUC fails to
meet its permit obligati on and is unable to reach an
alternative resolution with CDFW.
CDFW has long required Standby LOCs as a permit
requirement. The SFPUC currently holds 11 S tandby LOCs, all with Bank of America, N.A. for the benefit of CDFW (Existing Standby Letters of Credit) . The Existing Standby LOCs are listed in Attachment A to this Resolution. The SFPUC also expects to enter additional Standby LOCs for current or future capital projects necessitating a CDFW permit (Future Standby Letters of Credit).
If approved by the Commission, the General Manager or the General Manager’s designee would be authorized to enter , amend, or administer Existing or Future S tandby LOCs and any associated bank agreements as necessary or
Agenda Title: Delegate Authority to the General Manager to Enter Non-Financing Bank Credit Facility Agreements Commission Meeting Date: July 28, 2026
appropriate on behalf of the SFPUC as may be required for compliance with a CDFW permit . The authorization would be limited to Standby LOCs, as may be amended, with
aggregate annual fees less than $2 million.
Standby LOCs are not related to the financing credit facility agreements that the Water Enterprise maintains as part of its Interim Funding Program, which is used to finance capital projects. The CDFW permits are necessary for the regular operation, administration, and management of the SFPUC
Water Enterprise and the associated capital projects which are approved by this Commission; the Standby LOC is just one component of the compliance requirements and the
annual fees for Standby LOCs (currently under $500,000 in the aggregate) have no material impact on the budget or finances of the Water Enterprise.
Environmental
Review:
This action does not constitute a project under the California Environmental Quality Act Guidelines Section 15378 because it will not result in a physical change in the environment, and it does not represent an approval of a specific project.
Attachment(s) 1. Existing Standby Letters of Credit
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO. __________________
WHEREAS, Under San Francisco Charter Section 8B.121(a), the San Francisco Public Utilities Commission (SFPUC) has “exclusive charge of the construction, management, supervision, maintenance, extension, expansion, operation, use and control of all water, clean water and energy supplied and utilities of the city as well as the real, personal and financial assets, that are under the Commission’s jurisdiction or assigned to the Commission under Section 4.132.” Under Charter Sections 4.126 and 8B.121, the duly appointed General Manager is responsible for the administration and management of the department; and
WHEREAS, The SFPUC Water Enterprise, in its performance of various capital projects, must obtain permits from the California Department of Fish and Wildlife (CDFW) when such projects will impact endangered species and their habitat. CDFW requires security, typically in the form of a standby letter of credit, to assure performance of the permit obligations; and
WHEREAS, The CDFW permits are necessary for the regular operation, administration, and management of the SFPUC Water Enterprise; the security, or standby letter of credit, is just one component of the compliance requirements and such letters of credit carry annual fees that do not materially impact the budget or finances of the Water Enterprise; and
WHEREAS, In satisfaction of the security requirements of the CDFW permits granted in connection with Water Enterprise capital projects, the SFPUC has previously obtained standby letters of credit (the existing non-capital financing bank credit facilities) (Existing Letters of Credit) . The Existing Letters of Credit are listed in Exhibit A to this Resolution. SFPUC maintains the Existing Letters of Credit through one or more agreements with the Bank of America, N.A., and the payment of annual fees; and
WHEREAS, The SFPUC, as may be required by CDFW permit obligations, and as may be necessary and appropriate in SFPUC’s best interests, the SFPUC may enter into additional non- capital financing bank credit facilities (Future Standby Letters of Credit) and such Future Standby Letters of Credit would be of equal rank and on priority with the Existing Standby Letters of Credit, each constituting a contingency obligation before any draw(s) under the security and each constituting an enforceable obligation upon the occurrence of the applicable terms and conditions for payment; and
WHEREAS, This action does not constitute a project under the California Environmental Quality Act Guidelines Section 15378 because it will not result in a physical change in the environment, and it does not represent an approval of a specific project; now, therefore, be it
RESOLVED, That this Commission hereby authorizes the General Manager or the General Man ager’s designee to enter , amend, renew, terminate, or otherwise administer letters of credit or other non -capital financing bank credit facilities, on behalf of the SFPUC and for the benefit of the California Department of Fish & Wildlife to comply with regulatory permit requirements , with aggregate annual fees payable to the issuing bank(s) limited to an amount less than $2,000,000, and to execute any related certificates, notices, consents, and ancillary documents, provided that such actions are consistent with the authority granted by this Resolution and applicable law.
I hereby certify that the foregoing resolution was adopted by the San Francisco Public Utilities Commission at its meeting of July 28, 2026.
__________________________________
Director of Commission Affairs
San Francisco Public Utilities Commission
Standby LOC
Amount
Standby LOC
Number
Project
Name
Annual Fee*
$677,000 LOC #3115037 Crystal Springs/San Andreas Transmission Upgrade (WSIP)
$13,540
515,985 LOC #3113401 Sunol Valley Water Treatment Plant (WSIP) 10,319 896,401 LOC #68125360 Alameda Creek Diversion Dam Project (WSIP) 17,928 2,320,750 LOC #68125351 Lower Crystal Springs Dam Improvement Project – Fountain Thistle Mitigation Project (WSIP)
23,208
2,694,000 LOC #3114017 New Irvington Tunnel (WSIP) 26,940 2,807,457 LOC #3116058 Lower Crystal Springs Dam (WSIP) 28,075 593,215 LOC #3124676 San Joaquin Pipeline No. 4 Eastern Segment Project (WSIP)
11,864
12,100,000 LOC #3118295 Calaveras Dam Replacement Project (WSIP) 73,608 29,523,477 LOC #3117447 Calaveras Dam Replacement Project (WSIP) 179,601 54,700 LOC #68167929 Sunol Pit F3 (WSIP) 2,000
667,090 LOC #68176095 Alameda Creek Recapture Project 13,749 *Does not include $200 renewal fee.