Hillsborough deploys $648.8m utility bond proceeds for One Water

Hillsborough deploys $648.8m utility bond proceeds for One WaterHillsborough County commissioners unanimously approved budget realignments for the proceeds of the Series 2026A Utility Revenue Bonds. The action shifts a major share of One Water funding from commercial paper to long-term bond proceeds while updating capital-project budgets for refined construction estimates.

The FY27 amendment allocates $648.8 million in Series 2026A utility revenue bond proceeds, with a net budgetary impact of zero.

$335.2 million is directed to Water Resources Department capital-project costs, while existing capital budget line items are realigned by $370.2 million to reflect refined construction cost estimates.

$127.5 million is allocated to repay commercial paper and short-term notes issued for the Water Resources Department.

FY27 interest expense rises by $2.4 million due to weaker financial market conditions, while year-end accrual reserves increase by $4.0 million.

Commissioners approved the measure 7-0, with one commissioner calling it an important investment in South County infrastructure.

Hillsborough County has approved a FY27 budget amendment enabling the Water Resources Department to deploy $648.8 million of proceeds from the county's Series 2026A Utility Revenue Bonds, including financing for the One Water programme. The Board of County Commissioners approved the item unanimously on 7 October. County staff said the amendment was needed to record and allocate proceeds from the recently issued bonds, refinance certain commercial paper and short-term notes, pay issuance costs, and realign capital-project budgets to reflect updated construction estimates. The amendment directs $335.2 million to capital-project costs. It also realigns $370.2 million in existing capital-project budget line items, which staff said was required to reflect refined construction cost estimates. The agenda material identifies the financing as supporting the $1.8 billion One Water project. A further $127.5 million is allocated for repayment of commercial paper and short-term notes issued for the Water Resources Department. This includes a $14.3 million budget increase for bond proceeds to repay draws on the department's 2025 revolving line of credit facility with Bank of America, alongside a $3.0 million budget reduction related to repayment of commercial paper notes drawn on the county's JPMorgan line of credit. The county will budget $3.2 million for costs of issuing the 2026A bonds, while reducing previously budgeted issuance costs by $4.9 million. It will also increase FY27 interest expense by $2.4 million, which staff attributed to weaker financial market conditions, and increase reserves for fiscal year-end accruals by $4.0 million. The amendment raises planned interfund transfers from the Water Resources Department's general revenue fund by $6.2 million and reduces reserves in that fund by the same amount. It also reduces FY27 principal and interest payments budgeted for the Series 2016 Utility Revenue Bonds by $20.5 million and $100,000 respectively. Staff said the financing increases FY27 bond-issuance proceeds by $4.3 million and capital-improvement expenditure budgets by $9.1 million, funded through the additional bond proceeds and issuance-cost savings. Commercial-paper draws budgeted for capital works will be reduced by $335.2 million, with bond proceeds replacing that funding source. During the meeting, a commissioner described the action as an important investment in South County infrastructure.