COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Counsel

DATE:

October 13, 2009

BOARD MEETING DATE:

October 20, 2009

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Michael P. Murphy, County Counsel

SUBJECT:

Resolution Amending and Restating Resolution 069385 Authorizing the San Mateo Union High School District To Sell Its Bonds Directly.

RECOMMENDATION:

Adopt a Resolution amending and restating Resolution 069385 authorizing the San Mateo Union High School District to sell school bonds directly, pursuant to applicable law.

BACKGROUND:

Measure M was approved by the voters within the San Mateo Union High School District (the “District”) on November 7, 2006. It authorized the District to issue bonds in an amount not exceeding $298 million for certain school facilities projects. On March 1 , 2008, the District adopted its Resolution No. 08-05, which provided for the issuance and sale of general obligation bonds by the District pursuant to Government Code section 53506, subject to the adoption of a resolution by County Board of Supervisors pursuant to Education Code section 15140(b) authorizing the District to issue the bonds on its own. On May 6, 2008, this Board adopted its Resolution 069385 (“Resolution 069385”) authorizing the District to issue and sell Measure M school bonds directly, without further action by this Board, pursuant to state law. Resolution 069385 required that the bonds be issued and sold on a competitive sale basis and that the funds held by the County Treasurer-Tax Collector relating to the bonds be invested at the County Treasurer-Tax Collector’s discretion. On June 18, 2008, the District issued a first series of bonds authorized pursuant to Measure M in the aggregate principal amount of $62,700,000 and sold such bonds at competitive bid sale.

DISCUSSION:

On August 13, 2009, the Board of Trustees of the District (the “District Board”) adopted its Resolution 09-24 which authorized the issuance of up to $70,000,000 aggregate principal amount of bonds authorized pursuant to Measure M (designated as the “Series C Bonds” in said Resolution 09-24). Keygent LLC, serving as an independent financial advisor to the District Board, has advised the District Board that a combination of tax-exempt bonds, “Build America Bonds” (“BABs”), “Qualified School Construction Bonds” (“QSCBs”), or “Clean Renewable Energy Bonds,” (“CREBS”), (collectively “Special Bonds”) is likely to generate significant economic benefit to local taxpayers. The District Board has also been advised that due to a specialized investor market and the current experience of school and community college districts in connection with the sale of Special Bonds, such bonds have most effectively sold at a negotiated sale rather than a competitive bid sale.

The proposed amendment and restatement of Resolution 069385 provides the District with more flexibility, within the limits permitted by law, to achieve the maximum economic benefit for the District taxpayers from the issuance and sale of its Measure M bonds.

Authorizing the District to sell bonds directly will contribute to the Shared Vision 2025 outcome of collaborative government as it will allow the District the flexibility to obtain the increased economic benefit to local taxpayers.

FISCAL IMPACT:

The bonds are general obligations of the District, and do not constitute an obligation of the County. No part of any fund of the County is pledged or obligated to the payment of the bonds.