The voters in the San Mateo-Foster City School District ("District") approved by more than fifty-five percent of the voters a school bond measure on February 5, 2008, in the maximum aggregate principal amount of $175,000,000 (the “Bond Measure”). On March 3, 2009, the District issued its $55,000,000 San Mateo-Foster City School District 2009 General Obligation Bond Anticipation Notes (the “2009 Notes”) and used the proceeds thereof for the purposes set forth in the Bond Measure.
The American Recovery and Reinvestment Act of 2009 grants a national allocation of $11 billion to provide for the issuance of qualified school construction bonds, in accordance with the qualified tax credit bond program (the “Tax Credit Program”) found in Section 54A of the Internal Revenue Code of 1986, as amended (the “Code”). A portion of said allocation to issue Qualified School Construction Bonds (“QSCB”) has been granted to the District in the amount of $25,000,000 (the “District Allocation”) to provide financing for the construction, reconstruction or repair of public school facilities, or the acquisition of land on which such facilities are to be constructed with part of the proceeds of such issue.
The District's Board of Trustees has passed two resolutions. One resolution authorizes the issuance of Series A General Obligation Bonds, in the aggregate principal amount not to exceed $55,000,000, and requests that the County Board of Supervisors authorize the District to issue and sell, by negotiated sale, the Series A Bonds. The other resolution authorizes the issuance of Series Q Bonds, in the aggregate principal amount not to exceed $25,000,000, and requests that the County Board of Supervisors authorize the District to issue and sell, by negotiated sale, the Series Q Bonds.
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The Series A General Obligation Bond proceeds are to be used by the District to pay off the 2009 Notes. The Series Q Bonds are to be used by the District for the purposes authorized under the Bond Measure, and which are eligible for financing from the proceeds of Qualified School Construction Bonds under applicable federal law. The District is intending to issue the Series Q Bonds before the end of this calendar year because such QSCB bonds must, under present rules, be issued by December 31, 2009, unless an extension if granted.
Typically, the County issues and sells general obligation bonds on behalf of a school district. For these transactions, the District has requested that the County authorize the District itself to issue the particular series of bonds, and to sell the bonds through negotiated sales. California Education Code Section 15140(b) allows the Board of Supervisors to authorize the District to sell and issue bonds on its own behalf without further action of the Board of Supervisors or officers of the County.
The District is being assisted by Jones Hall, a Professional Law Corporation, as bond counsel, and Keygent LLC as financial advisor.
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