LEGISLATIVE ADVOCACY COMMITTEE

ITEM:		DISCUSSION ITEM
3.	STRATEGY AND TIMELINE FOR LEGISLATION REGARDING PUBLIC CONTRIBUTION TOWARDS FINANCING MONTEREY PENINSULA WATER SUPPLY PROJECT
Meeting Date:			October 9, 2013	Budgeted:	N/A
From:			David J. Stoldt	Program/
			General Manager	Line Item No.:
Prepared By:			David J. Stoldt	Cost Estimate:
General Counsel Approval: N/A
Committee Recommendation: N/A
CEQA Compliance: N/A

SUMMARY: In October 2012, the District submitted a “Public Agency Participation Proposal” to California American Water (Cal-Am) as part of the CPUC proceeding A.12-04-019.  The District submitted both Governance Concepts and an Evaluation of Capital Financing Alternatives.  Since that time, the District has worked to promote the District’s idea of a contribution of public financing to decrease the cost to ratepayers. 

In the July 31, 2013 ”Large” Settlement Agreement the Parties agreed to proceed with a form of public contribution known as Securitization. As shown in Exhibit 3-A, this form of financing could entail $44 million to $119 million of debt issues by the District and secured by payments of another debt issuance issued by a special purpose entity and secured by surcharges on the Cal-Am bill. The section of the Settlement Agreement relating to Securitization is attached as Exhibit 3-B, and sections 11.4 (e) and (g) refer to the requirement for legislation. The Securitization is also known as the Ratepayer Relief Financing plan.

On August 28, 2013 the General Manager, Carmel Mayor Jason Burnett, and John Arriaga met with Senator Bill Monning and Assemblymember Mark Stone to discuss strategy and timelines for legislation for the Ratepayer Relief Financing for a portion of the Cal-Am desalination facility. Attached as Exhibit 3-C contains the proposed timetable. Based on the discussions, the likely committees may change from what appears in the Exhibit. Senator Monning has agreed to author the bill, so the timeline will also change to reflect introduction in the Senate.

EXHIBITS

3-A Financing Sources for Cal-Am Desalination Facility

3-B Excerpts of Large Settlement Agreement Relating to Securitization

3-C Legislative Timeline and Strategy Briefing

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