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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
County Manager’s Office
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DATE:
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January 31, 2011
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BOARD MEETING DATE:
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February 15, 2011
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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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David S. Boesch, County Manager
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SUBJECT:
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Reimburse Expenditures from Proceeds of Indebtedness
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RECOMMENDATION:
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Adopt a Resolution declaring the official intent of the County of San Mateo to reimburse certain expenditures from proceeds of indebtedness.
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BACKGROUND:
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On December 21, 2010, your Board approved a Mitigated Negative Declaration for the Jail Replacement and Expansion Project (“New Jail Project”) at 20, 50, 70 and 80 Chemical Way, Redwood City, and on December 30, 2010, the County completed the acquisition of the four properties, a total of approximately 4.5 acres of land together with the improvements thereon (the “Woodhouse Site”).
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On January 25, 2011, your Board authorized execution of a Purchase and Sale Agreement for the acquisition of two four-story office buildings and the adjacent parking structure at One and Two Circle Star Way, San Carlos (the “Circle Star Project”). The office buildings consist of a total area of approximately 208,000 square feet. The parking structure has a capacity of about 400 cars, and supplements surface parking. The Agreement is subject to the County’s right to complete its due diligence by February 26, 2011. If all conditions are then met or waived, the purchase will be completed by March 10, 2011.
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DISCUSSION:
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The County intends to issue future debt to finance the New Jail Project and may determine at a later date to include the acquisition and improvement of the Circle Star Project in said financing. The estimated all-in real property acquisition, due diligence and site improvement costs are not expected to exceed $172 million for the New Jail Project and $58 million for the Circle Star Project. To retain the option of including the cost of acquisition of real property for both projects in a future debt issuance, Section 1.150-2 of the Treasury Regulations requires the County to declare its reasonable official intent to reimburse these expenditures with proceeds of a subsequent borrowing. Approval of this resolution does not bind the County to make any expenditure, incur any indebtedness, or proceed with the New Jail Project or the Circle Star Project.
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County Counsel has reviewed and approved the Resolution as to form and content.
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Adoption of the Resolution contributes to the Shared Vision 2025 outcome of a Collaborative Community through fiscal accountability by providing the County with the option of replenishing cash reserves for future needs.
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FISCAL IMPACT:
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Approval of this resolution results in no immediate fiscal impact; however, it provides the County with the option of including the acquisition of real property and due diligence costs associated with the New Jail Project and the Circle Star Project in future indebtedness, thereby replenishing cash reserves. The acquisition and due diligence costs of both sites total $59,128,258.
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