COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager's Office

DATE:

July 23, 2003

BOARD MEETING DATE:

August 5, 2003

TO:

Honorable Board of Supervisors

FROM:

Paul T. Scannell, Assistant County Manager

SUBJECT:

Public Hearing on Proposed Bond Financing for County Facilities

RECOMMENDATION:

Hold a public hearing and subsequent to a public hearing approve the issuance of bonds by the San Mateo County Joint Powers Financing Authority for the financing of public capital improvements within the County, including the Youth Services Campus project.

BACKGROUND:

The County is a member of the San Mateo County Joint Powers Financing Authority (the "Authority"). The Authority is a joint powers authority formed by the County and the Community Development Commission for the County. The Authority assists the County by issuing bonds to finance capital improvements.

Under the Marks-Roos Local Bond Pooling Act (Government Code section 6500 and following), joint powers authorities are authorized to issue bonds to pay for the costs of public improvement. However, Government Code section 6586.5 requires that before a joint powers authority can authorize such bonds, a local agency that is not itself a joint powers authority, within whose boundaries the public capital improvement is to be located must: (1) hold a public hearing, (2) make a finding of "significant public benefit" and (3) approve the issuance of the bonds.

The County is requesting the Authority to issue bonds to finance public capital improvements, including the demolition, site preparation, construction, furnishing, and equipping of a juvenile hall, juvenile court, girls camp, community school, group home, receiving home and probation offices, all located within the County (the "Project"). The bonds will be issued in an amount not to exceed $170,000,000. The County will enter into a lease with the Authority and will pay rent for the Project in amounts sufficient to retire the bonds. The financing by the Authority will enable the delivery of the Project in a cost effective manner.

DISCUSSION:

In order to comply with Government Code section 6586.5, the County of San Mateo is required to approve the issuance of the bonds after holding a public hearing.

The County Board of Supervisors must also make a finding that the financing of the public capital improvement will result in "significant public benefit" in accordance with Government Code section 6586. "Significant public benefit" means any of the following benefits to the citizens of the local agency:

a)

Demonstrable savings in effective interest rate, bond preparation, bond underwriting, or issuance costs.

b)

Significant reductions in effective user charges levied by a local agency.

c)

Employment benefits from undertaking the project in a timely fashion.

d)

More efficient delivery of local agency services to residential and commercial development.

The County will make the necessary findings in its resolution authorizing the financing.

VISION ALIGNMENT:

The issuance of Lease Revenue Bonds for the San Mateo County Youth Services Center keeps the commitment of ensuring basic health and safety for all and goal numbers 7 and 8: Maintain and enhance the public safety of all residents and visitors and help vulnerable people - the aged, disabled, mentally ill, at-risk youth and other - achieve a better quality of life. It also keeps the commitment of responsive, effective and collaborative government and goal number 20:
Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain.

FISCAL IMPACT:

The fiscal impact of the proposed Bonds is addressed in the Inter-Departmental Correspondence relating to the resolutions authorizing the financing. There is no fiscal impact to holding the public hearing on the proposed financing.