Joint Meeting of Sacramento Area Sewer District and Northern California Sanitation Agencies Finance Authority

Note: The meeting transcript indicates the actual date was Wednesday, May 22, 2024, but the instruction specifies the meeting date as 2024-05-24 15:08:06+00:00. This summary uses the provided date for consistency, acknowledging a discrepancy.

The joint meeting of the Sacramento Area Sewer District (SASD) and the Northern California Sanitation Agencies Finance Authority (NCSAF) was called to order with a quorum present. The board considered three joint agenda items and then proceeded with the SASD regular agenda, including a consent calendar, a strategic planning contract, and an increase to the sewer lifeline rate assistance program discount.

Consent Calendar

• Items 4 through 8 on the SASD agenda were approved unanimously without discussion or public comment. Specific consent items were not detailed in the transcript.

Discussion Items

• Item 1: Adoption of Fiscal Year 2024-25 Final Budgets

  • Christoph Dobson, District Engineer, presented the proposed operating budget of $454.4 million and capital budget of $564.6 million. He addressed prior questions from Director Kaplan on cybersecurity and pension costs, noting cybersecurity costs have increased but remain a small portion of the overall IT budget, and pension costs are tied directly to salary increases with a stable percentage over the last three years. No public comment was received. The budget was approved unanimously by both the SASD board and the Finance Authority.

• Item 2: Authorize Issuance of Refunding Bonds and Termination of Swaps

  • Teppa Banda, Director of Finance, presented a plan to optimize the district's debt portfolio by refunding the 2014A bonds and multiple variable-rate bond series (2012A, 2013B, 2013C, 2013D) and terminating two swap agreements with BNP Paribas. The estimated net present value savings are $68.7 million, with annual debt service savings of approximately $5 million (from $132 million to $127 million). The refunding would eliminate variable-rate interest rate risk and counterparty risk, simplify debt management, and create a levelized debt service structure. Director Sander asked about the maximum interest rate assumptions and how the current rate compares historically; staff explained the rate is favorable in the current environment. The board unanimously approved the issuance of up to $433 million in new tax-exempt bonds (subject to market conditions) and authorized termination payments up to $15 million for the swaps.

• Item 11: Contract with Arcadis U.S. Inc. for Strategic Plan Consulting Services

  • Christoph Dobson presented the need for a unified strategic plan for the merged district (SASD and Regional SAN). The contract with Arcadis would also include organizational design analysis. He requested volunteer board members to participate in interviews with the consultants. Directors Kaplan, Robles, and one other (the chair) volunteered. The contract was approved unanimously.

• Item 12: Increase Sewer Lifeline Rate Assistance Program (SILRAP) Discount

  • Mike Hewitt, Director of Policy and Planning, presented a proposal to increase the annual SILRAP discount from $150 to $165 per ESD for the treatment/resource recovery service area and from $25 to $30 per ESD for the collection system, effective July 1, 2024, in conjunction with upcoming rate increases. The estimated cost increase is from $2.1 million to $2.4 million per year. Outreach efforts, including multilingual materials (English, Spanish, Russian) and a data-sharing agreement with SMUD to identify eligible customers, were highlighted. Directors discussed income verification audits, language accessibility, technological barriers for seniors, and outreach to mobile home parks and senior living facilities. Director Cerna suggested partnering with the Area Agency for Aging; Director Viegas asked about using other utility low-income program data. The board expressed strong support and approved the increase unanimously.

Key Outcomes

• The Fiscal Year 2024-25 operating and capital budgets were adopted unanimously by both SASD and the Finance Authority.
• Authorization was granted to issue refunding bonds and terminate swap agreements, with estimated net savings of $68.7 million in present value and $5 million annually.
• A contract with Arcadis U.S. Inc. for strategic planning and organizational design services was approved.
• The sewer lifeline rate assistance program discount was increased by approximately $15 per year for treatment and $5 per year for collection system customers, effective July 1, 2024.
• All votes were unanimous on the record, with no public comments received on any agenda item.
• The meeting adjourned after the regular agenda; no closed session action was reported.