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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
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County Counsel
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DATE:
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November 1, 2006
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BOARD MEETING DATE:
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November 14, 2006
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SPECIAL NOTICE/HEARING:
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None
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VOTE REQUIRED:
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Majority
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TO:
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Honorable Board of Supervisors
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FROM:
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Armando Muela, Chief, Woodside Fire Protection District
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SUBJECT:
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Resolution Authorizing Loan of Available Funds to the Woodside Fire Protection District
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RECOMMENDATION:
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Adopt a resolution to authorize a loan of available funds to the Woodside Fire Protection District in the amount of $1,500,000.
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VISION ALIGNMENT:
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Commitment: Responsive, effective and collaborative government.
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Goal(s): County and local governments effectively communicate, collaborate and develop strategic approaches to issues affecting the entire County.
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BACKGROUND:
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To cover expenditures over and above expected revenue for October, November and December 2006, Woodside Fire Protection District (“District”) is requesting a loan of $1,500,000 from the County.
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The attached spreadsheet provides detail regarding the District’s cash flow, including actual expenditures for July through October 2006, and estimated expenditures for November and December. The District expects to be short by almost $1.4 million in the month of November. Other than the account with the County, the District has no other bank accounts. The revenue figures include property tax revenue that the District expects to receive on November 16. The District is asking that the loan, if granted, be effective after November 16, so that the District would repay the loan with the estimated property tax revenue of $4,267,800 that it expects to receive on December 16.
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As for other potential sources of income, the District currently has two properties listed for sale: one for $995,000, and the other for $850,000. The District is also looking at two loans, one secured and the other, an equity line of credit, so as to avoid a repeat of this situation again next year.
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The reason for the District’s current financial situation is that the District funded the cost ($4,800,000) of a new station in Emerald Hills out of its reserves (see reference to expenses related to “Station 19” on the attachment).
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DISCUSSION:
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Government Code section 23010(a) provides that the County, pursuant to a resolution adopted by the Board of Supervisors, may “lend any of its available funds to any … fire protection district … located wholly within the county, if its funds are or when available will be in the custody of the county or any officer of the county, in order to enable the district to perform its functions and meet its obligations.”
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That section also requires that “[t]he loan shall not exceed 85 percent of the district's anticipated revenue for the fiscal year in which it is made or for the next ensuing fiscal year, and shall be repaid out of that revenue prior to the payment of any other obligation of the district.”
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The District would be required to pay interest under Government Code section 23010(e), which states that “[t]he district shall pay interest on all funds borrowed from the county at the same rate that the county applies to funds of the district on deposit with the county.”
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Based on this authority, and for the reasons stated above, the District requests that your Board authorize a loan in the amount of $1,500,000 to the Woodside Fire Protection District, to be repaid upon receipt of property tax revenues from the County on or about December 16, 2006, prior to the payment of any other obligation of the district.
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FISCAL IMPACT:
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There is no fiscal impact to the County. The District will pay interest on the funds borrowed from the County.
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