Bay Area sewer district funds plant upgrade with bond issue
A San Francisco Bay Area sewer district is financing a treatment plant improvement project through bond financing.
The Oro Loma Sanitary District, based in San Lorenzo, plans to issue $13.32 million in limited obligation bonds through the California Public Finance Authority through a competitive sale Sept. 25.
The proceeds will be used to fund a $24.7 million upgrade of its plant that will allow the district to process wastewater discharged into the bay at a higher quality and reduced nitrogen, according to the preliminary official statement.
The project includes the construction of a new pump station and basin and the replacement and upgrade of an aeration system.
The district covers 13 square miles in the East Bay with 47,100 customers mostly in the unincorporated areas of Alameda County as well as portions of the cities of San Leandro, Castro Valley and Hayward.
District reserves will fund part of the cost while the Castro Valley Sewer District, which has a 25% stake in the plant, while come up with the rest of the money.
The district received an AA-plus rating from S&P Global Ratings in August.
Hawkins Delafield & Wood is the bond counsel and Bartle Wells Associates is the municipal advisor for the deal.
The bond offering is the district’s first since 2009 when it redeemed $3.4 million in bonds, according to its annual report. It has funded most previous capital projects through reserve funds, the report said.
The proceeds will be paid off through future revenues collected from customers. The district brings in $22 million in revenues and has operating expenses of $20.6 million, according to its 2018-2019 fiscal year budget.
District officials say upcoming development in its area will bring in an estimated $24 million in connection fees.