HTML Preview Professional Business Memo page number 1.
MEMORANDUM
TO:
Wade Miller, Executive Director
FROM:
Dave Smith, Managing Director
COPIES:
Mike Markus, President, WateReuse California Board of Trustees
Paul Klein, California Section Member of Association Board
DATE:
March 17, 2014
SUBJECT:
WateReuse California Status Report
Some of WateReuse California’s activities to promote water recycling and desalination
are summarized for the WateReuse Association Board of Directors below. This
memorandum describes new issues and provides an update on previously described
issues. Please invite anyone wanting additional information to contact me at 916 669-
8401 or dsmith@watereuse.org.
NEW ISSUES
Drought Relief
In anticipation of the Governor’s declaration of drought emergency, which occurred in
January, WateReuse California identified and described measures that the State could
take to facilitate additional water recycling in the short term as follows:
• Refine State Revolving Fund (SRF) Loan Parameters – We identified 220,000 acre-
feet of recycling that could be added in the next one to three years at a cost of about
$1 billion. To facilitate this, the State has agreed to make the following SRF loan
changes;
o Reduced interest rate – the rate has historically been 2 to 3 percent, and it will be
reduced to 0.5 percent until $400 million has been loaned, then raised to 1 percent
until another $200 million has been loaned.
o Loan Subordination. SRF loans have historically been required to have senior
status to the borrower’s other debt. This has discouraged use of the SRF Program
because senior status requires higher reserves to be set aside for debt service by
the borrower and may be incompatible with the borrower’s other debt
commitments. We asked for consideration of the overall credit-worthiness of a
given borrower rather than a strict standard that new SRF Program loans be senior
to other agency debt. Staff agreed to this request. This change does not require
SWRCB approval but we asked that SWRCB be informed on March 18.