California WaterFix Joining Delta Conveyance Financing Joint Power - - PowerPoint PPT Presentation

November 20, 2018 Item No. 6.1

California WaterFix – Joining Delta Conveyance Financing Joint Power Authority

Central Valley Project Unsubscribed 33% of Total Costs ($5.582B)* State Water Project 67% of Total Costs ($11.148B)*

Conceptual CA WaterFix Cost Allocation Framework

2

MWD 100% Unsubscribed MWD 47.13% of SWP Other SWP Contractors

CA WaterFix Total Cost (100%) ($16.731B)*

* 2017 Dollars

3

CA CA Wa WaterFix Im Impact on

• n SCV

SCV Wa Water St State Con Contract ct Fund Fund (In (In 15 15 ye years)

• Capital Costs

$17.7M

• Minimum Costs 1.8M
• Variable Cost 5.0M
• Total $ 24.5M
• Increase in Agency Set Tax Rate ‐ 4.5 cents
• Cost for Average $510,000 Home ‐ $20/Mo.

Purpose of the Finance JPA

• The Finance JPA was formed for the primary purpose of:

 Providing a means to facilitate continued progress on the design and permitting of the CA WaterFix  Support the issuance of DWR WaterFix Revenue Bonds by Purchasing bonds from DWR  Funding the purchase of the Water Fix Bonds would come from bonds issued by the Finance JPA

4

SWP Contractors

California WaterFix Financing

SWP Bill

$ $

Design- Construction JPA

Bond Proceeds Debt Service

Bond Investors

5

SWP Contractors Finance Authority Bond Investors

California WaterFix Financing

SWP Bill

$ $

Design- Construction JPA

Bond Proceeds Debt Service Bonds

6

What Might a Finance JPA Bond Transaction Look Like?

• The Finance JPA will issue revenue bonds (the “JPA Bonds”) to the

public market or as a private placement

• The Finance JPA will use the proceeds from the issuance of the JPA

Bonds to purchase DWR WaterFix Bonds;

• The Finance JPA will enter into an installment purchase agreement

with each member of the Finance JPA;

• Each member will purchase a portion of the DWR WaterFix Bonds in

exchange for installment payments which will secure the JPA Bonds.

7

SWP Contractors Bond Investors SWP 67% Share Financing 33% Share Financing

Finance Authority

Bond Investors

California WaterFix Financing

SWP Bill

$ $

Design- Construction JPA

Bond Proceeds Debt Service Bonds Bonds

8

Current Members of Finance JPA

 Alameda County Flood Control and Water Conservation District, Zone 7  Alameda County Water District  Antelope Valley-East Kern Water Agency*  Metropolitan Water District  Mojave Water Agency*  San Bernardino Valley Municipal Water District  Santa Clara Valley Water District  San Gorgonio Pass Water Agency  Others pending * (authorized, execution of agreement pending)

9

Key Agreement Terms

• Membership on Board restricted to:

 SWP and CVP Contractors and KCWA member units  Passing resolution indicating an intent to finance a share of debt

• Term – 50 years or repayment of debt
• Voting

 Initially one agency one vote (until debt is issued)  Weighted with financial obligation except for administrative functions  After Dec 3rd a unanimous vote to accept new members

10

Benefits and Risks of Joining JPA

11

• Benefits

 Demonstrates support of CA WaterFix  Provides seat at table to influence JPA policies and actions

• Risks

 Minimal initial financial investment  Future financial risks will be assessed prior to issuance of JPA financial instruments

Recommendation

• The Water Resources and Watershed Committee recommends the Board adopt

a resolution authorizing the General Manager enter into the Delta Conveyance Finance JPA agreement

12

BACKUP SLIDES

State Water Contractors CA WaterFix Contract Amendment 13 September 18, 2018

14

Ag Agency ency Shar Share of

• f Es

Estim timated Expenditur Expenditures

$0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049 $ Millions Capital Minimum Variable

Design & Construction Commissioning & Operations

15

Es Estim timated CA CA Wa Water Fix Fix Annual Annual Cos Costs

(C (Cap apit ital Fi Financed nanced by by Fi Finance nance JP JPA or

• r DWR)

DWR)

$0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049 $ Millions

Design & Constr. Commissioning and Operations

16

Es Estim timated CA CA Wa Water Fix Fix Annual Annual Cos Costs

(C (Cap apit ital Fi Financed nanced by by DWR) DWR)

$0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 2015 2020 2025 2030 2035 2040 2045 2050 2055 $ Millions

Design & Constr. Commissioning and Operations

17

Fi Financial nancial Im Impacts

• Dependent on Board’s future policy decisions
• Potential Options
• Pay‐as‐you‐go
• Costs on water rates
• Costs on agency set tax rate
• Some combination of the above