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Description
San Bruno City Council November 27, 2012
10g. Water Supply Agreement Prepayment
B
Thank
You
honorable
mayor
members
of
the
City
Council
bebe
area,
water
supply
and
conservation
agency,
referred
to
as
bosca,
represents
the
interests
of
24
cities
and
water
districts,
along
with
two
private
utilities
that
purchase
water
wholesale
from
san
francisco
regional
water
system.
Pursuant
to
the
water
supply
agreement
in
2009,
one
of
the
activities
of
bosca
that
bosca
participates
in
is
negotiating
wholesale
water
rates
and
identifying
ways
to
keep
those
rates
low.
One
of
the
factors
built
into
those
rates
into
the
wholesale
water
rates
pages
narciso
are
costs
for
capital
improvements.
B
On
behalf
of
the
agencies,
at
a
lower
rate
of
interest
than
is
currently
being
paid,
it
has
been
determined
that
issuing
debt
is
feasible
and
would
result
in
approximately
twenty
to
thirty
four
million
dollars
in
savings
for
all
member
agencies
over
the
21.5
year
term
of
the
bonds.
The
actual
savings
by
agency
is
difficult
to
estimate,
given
that
they
are
our
function
of
water
purchases
in
a
given
year.
B
So
at
the
time
they
can
provide
estimates,
but
the
actual
savings
will
vary
year
to
year,
depending
on
the
amount
of
water
purchased
by
an
agency
at
this
time.
The
savings
that
san
bruno
is
estimated
to
receive
as
a
result
of
this
prepayment
range
from
276
thousand
dollars
to
469
thousand
dollars.
Obviously,
a
very
big
range
varies
on
a
number
factors,
including
the
water
purchases
and
also
the
market.
How
the
market
response
to
this
issuance.
The
annual
present
value
savings
would
range
somewhere
in
the
twelve
to
twenty
one
thousand
dollars.
B
The
issuance
of
these
bonds
would
be
by
bosca.
They
would
not
be
a
debt
issuance
of
the
city,
the
city,
if
they
choose
to
participate.
We
continue
to
pay
this
as
part
of
the
wholesale
water
rates
as
an
operating
costs,
so
it
would
not
be
a
debt
of
San
Bruno.
The
resolution
before
you
this
evening,
which
is
certify
that
San
Bruno
wishes
to
participate
in
this
prepayment
and
authorizes
the
city
manager
myself
to
participate
with
bosca
and
to
ensure
that
the
city
provides
all
the
necessary
information
to
see
this
through
I.
D
You
I'd
like
to
make
just
two
clarifications:
the
money
that
we
are
pre
paying
off
the
debt
is
not
money
that
paid
for
the
capital
improvements
that
are
going
on
now.
These
are
capital
improvements
that
occurred
in
the
past
and
it's
a
debt
that
we
have
now,
so
we
are
paying
that
debt
off
at
five
points,
13
percent.
So
if
we
decide
not
to
do
this,
we
would
still
have
to
pay
that
debt
off
at
five
point
one
three
percent.
So
that's!
That's
that
part.