Vallejo issues bonds that will fund $51.27 million in drinking water system improvement projects
Feb. 28—On Wednesday the
A bond is similar to an IOU but regulated by the government. Investors "buy" bonds from cities, which, like an IOU, is a promise that the city will pay the money back with interest over a certain amount of time.
"The Series 2021A Water Revenue Bonds will fund
Over the course of the 2018-2019 rate-setting process, council, Vallejo city staff and the community identified infrastructure and maintenance work to Vallejo's water system as a top priority.
The bond-funded projects will:
—Support the reliability of the drinking water system;
—Help to make water operations more efficient;
—Guarantee that Vallejo's drinking water continues to meet (or exceed) all water quality requirements set forth by State and Federal authorities.
There will also be infrastructure improvements to support consistent drinking water delivery to all customers during the annual PG&E Public Safety Power Shutoffs (PSPS).
Some of the important projects that these bonds will fund are:
—Advanced metering infrastructure (AMI);
—Replacement of aging pipelines;
—Improvements to water treatment plant and pump stations;
—Replacement of drinking-water storage tanks.
Due to the current market the city secured an effective interest rate of 2.50%. The bonds were rated A+ by the credit agency Standard and Poor (S&P). Vallejo planned ahead for the repayment of these bonds ("IOUs") in Vallejo's current rate plan, which council unanimously adopted in
A portion of the 2021 Bonds also carries insurance from
To learn more about government bonds, visit www.investor.gov
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