Urban Futures, Inc. has supported the San Bernardino Municipal Water Department (SBMWD), which oversees water and sewer treatment operations in the City of San Bernardino, in closing its second bond issue.
The two bond issues enabled the Department to raise $68 million, which will be invested in frontline water and sewer treatment infrastructure. Both residents and businesses throughout the City will benefit from sustainable and efficient service delivery afforded by the funding for those new projects. Residents and the City also will benefit from economic savings: As part of the financing, the Department’s 2002, 2007 and 2012 California Infrastructure and Economic Development Bank loans of more than $17 million were refunded.
The Department’s strong operational and financial management allowed SBMWD to receive ratings of “A” Stable from Standard & Poor’s on both bonds, despite the City of San Bernardino’s current chapter 9 bankruptcy. SBMWD also received bond insurance and debt service sureties from Build America Mutual for the Water Revenue Bonds and Assured Guaranty Municipal Corporation for the Sewer Treatment Revenue Bonds. As a result, the bonds were issued with a true interest cost of 3.74 percent for the water bonds and 3.97 percent for the sewer bonds, equating to a combined average annual debt service of $4.96 million over 30 years.
“The confidence and demand reflected by the market for the SBMWD bonds provides an excellent opportunity to invest in the future of San Bernardino,” says Michael Busch, CEO of Urban Futures, Inc. “UFI is proud to have supported this effort to affect positive change for this community.”
The $68 million raised by selling the two bonds will fund frontline improvement projects including seismic upgrades to the City’s water reservoirs, funding for phase one of the Clean Water Factory – Recycled Water Program and improvements aimed to improve service and operational efficiency.
The repayment of the bonds will come from the SBMWD’s operating budget. The issuing of bonds is a valuable tool that has empowered the Department to fund critically needed infrastructure projects that previously have had funding gaps.
“I was very pleased by the quality of service provided by the financing team, and in particular, the leadership of UFI throughout this process,” says Terri Willoughby, Finance Director for SBMWD.