California WaterFix – Joining Delta Conveyance Financing Joint Power Authority November 20, 2018 Item No. 6.1
Conceptual CA WaterFix Cost Allocation Framework CA WaterFix Total Cost (100%) ($16.731B)* Central Valley Project State Water Project Unsubscribed 67% of Total Costs 33% of Total Costs ($11.148B)* ($5.582B)* MWD MWD Other SWP Contractors 100% Unsubscribed 47.13% of SWP * 2017 Dollars 2
CA CA Wa WaterFix Im Impact on on 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. 3
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
California WaterFix Financing Bond Proceeds Bond Investors Debt Service $ SWP Bill $ Design- SWP Construction Contractors JPA 5
California WaterFix Financing Bond Proceeds Bond Finance Bonds Investors Authority Debt Service $ SWP Bill $ Design- SWP Construction Contractors JPA 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
California WaterFix Financing SWP Bond Proceeds 67% Bond Bonds Share Investors Debt Service Financing Finance Authority $ SWP Bill 33% $ Bond Share Bonds Investors Financing Design- SWP Construction Contractors JPA 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 3 rd a unanimous vote to accept new members 10
Benefits and Risks of Joining JPA 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 11
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 13 September 18, 2018 CA WaterFix Contract Amendment
Ag Agency ency Shar Share of of Es Estim timated Expenditur Expenditures Design & Construction Commissioning & Operations $50 $45 $40 $35 $30 $ Millions $25 $20 $15 $10 $5 $0 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049 Capital Minimum Variable 14
Es Estim timated CA CA Wa Water Fix Fix Annual Annual Cos Costs (Cap (C apit ital Fi Financed nanced by by Fi Finance nance JP JPA or or DWR) DWR) Design & Constr. Commissioning and Operations $50 $45 $40 $35 $ Millions $30 $25 $20 $15 $10 $5 $0 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049 15
Es Estim timated CA CA Wa Water Fix Fix Annual Annual Cos Costs (C (Cap apit ital Fi Financed nanced by by DWR) DWR) Design & Constr. Commissioning and Operations $50 $45 $40 $35 $ Millions $30 $25 $20 $15 $10 $5 $0 2015 2020 2025 2030 2035 2040 2045 2050 2055 16
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 17
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