DATE: February 25, 2025
TO: Mayor and City Council
FROM: Director of Public Works and Interim Director of Finance
SUBJECT
Title
2025 Wastewater Revenue Bonds: Adopt Resolutions Authorizing the Issuance and Sale of Wastewater Revenue Bonds in the Maximum Principal Amount of $135,000,000, to Finance Capital Improvements to the Wastewater System, Including the Water Resources Recovery Facility Improvements, and Approving Related Agreements and Actions
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RECOMMENDATION
Recommendation
That Council adopts a resolution (Attachment II) authorizing the issuance and sale of Wastewater Revenue Bonds in the maximum principal amount of [$133,000,000] to finance capital improvements to the Wastewater System, including the Water Resources Recovery Facility (WRRF) improvements, and approving related agreements and actions.
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SUMMARY
The City of Hayward’s Department of Public Works & Utilities is pursuing a major capital improvement project to construct a WRRF Administration and Laboratory Building (WRRF Administration and Laboratory Building Project) and to improve the Water Resources Recovery Facility (WRRF Phase II Project, and combined with the Administration and Laboratory Building Project, the “Project”) to meet the nutrient reduction mandate for treated effluent identified in the 3rd Nutrients Watershed Permit adopted by the California Regional Water Quality Control Board in July 2024. The total cost of the Project is estimated at $498 million, including all capital costs, contingencies, and financing costs.
As part of the funding strategy, the City intends to finance the project by the U.S. Environmental Protection Agency’s Water Infrastructure Finance and Innovation Act of 2014 (WIFIA) loan program, funding from the Water Resources Development Act (WRDA), and publicly-sold revenue bonds. The WIFIA loan is expected to be approximately $244 million and is expected to provide funding for construction costs between September 2026 and September 2028.
In order to provide funding for construction costs until September 2026, the City is planning to issue 2025 Wastewater Revenue Bonds (2025 Bonds). In addition, pursuant to Resolution No. 24-061, adopted by Council on April 2, 2024, in which Council declared its intention to reimburse costs related to the Project from future tax-exempt obligations, the 2025 Bonds will reimburse the City up to $12 million in Project costs incurred and paid to date.
The WIFIA Loan and the 2025 Bonds will draw from net revenues (total revenues minus operation and maintenance costs) received by the City from its wastewater collection, pumping, transport, treatment, storage, and disposal system (Wastewater System).
ATTACHMENTS
Attachment I Staff Report
Attachment II Resolution
Attachment III Indenture of Trust
Attachment IV Notice of Sale
Attachment V Preliminary Official Statement