Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: John C. Beiers, County Counsel
Subject: Approval of Issuance of Bonds for Purposes of Section 147 of the Internal Revenue Code
RECOMMENDATION:
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Adopt a resolution approving for purposes of Section 147(f) of the Internal Revenue Code of 1986, as amended, the issuance of bonds pursuant to a plan of finance by San Mateo County Joint Powers Financing Authority in an aggregate principal amount not to exceed $305,000,000, for the purpose of financing and/or refinancing the acquisition, construction, remodeling and/or equipping of county facilities and certain other matters relating thereto.
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BACKGROUND:
On April 11, 2017, this Board approved a financing plan and timelines for a number of capital projects, including with respect to the construction of the Cordilleras Mental Health Facility ("Cordilleras Project").
On May 18, 2021, this Board approved the issuance of lease revenue bonds in an aggregate principal amount not to exceed $305,000,000 in connection with financing the Cordilleras Project and associated refunding of prior bonds (the "Bonds") as part of an overall plan of finance to manage the County's debt service and to finance capital projects. The present resolution is directed to ensuring that the Bonds have certain tax-exempt protections available to such issuances under the Internal Revenue Code.
The financing for the Cordilleras Project is made more efficient by issuing the Bonds on a tax-exempt basis. Subject to certain exceptions, the Internal Revenue Code prohibits what they term "private use" - or use of facilities improved with bond funds by users other than state and local governments. Non-profit (501(c)(3)) organizations are generally considered private users. In order to preserve the tax-exempt status of the Bonds if part of the Cordilleras facilities are operated in whole or in part by a nonprofit organization,...
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