In addition, there can be no assurance that land development operations within the Town will not be adversely affected by future government policies, including, but not limited to, governmental policies to restrict or control development.
Proposition 218
Proposition 218, a state ballot initiative known as the “Right to Vote on Taxes Act” was approved by California voters on November 5, 1996 and, except for certain provisions that became effective on July 1, 1997, became effective on November 6, 1996. Proposition 218 added Article XIIIC, entitled “Voter Approval of Local Tax Levies” (“Article XIIIC”), and Article XIIID, entitled “Assessment and Property Related Fee Reform (“Article XIIID”), to the California Constitution. Article XIIIC and Article XIIID limit the imposition by a local government of “general taxes,” “special taxes,” “assessments” and “fees” or “charges.” The Town is a local government within the meaning of Article XIIIC and Article XIIID.
Article XIIIC, provides, among other things, that the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local fee or charge. This extension of the initiative power is not limited by the terms of Article XIIIC to fees and charges imposed after November 6, 1996 and, absent other authority, could result in retroactive reduction in existing fees and charges. Although the terms “fees” and “charges” are not defined in Article XIIIC, the California Supreme Court, in Bighorn-Desert View Water Agency v. Kari Verjil; E.W. Kelley (July 2006), has stated that there is no basis for excluding from Article XIIIC’s authorization any of the fees subject to Article XIIID. If fees or charges charged or collected by the Town for its Water System or Sewer System are subjected to the initiative process and the outcome of any initiative proceedings results in a reduction or repeal of such fees or charges, respectively, the ability of the Enterprise to generate revenues sufficient to comply with the Town’s covenants under the Indenture may be adversely affected.
Furthermore, if voters were to approve an initiative lowering the Town’s water rates, sewer rates, or other charges, the Town would need voter approval before it could change the rate or charge that had been set by initiative. The Town could, however, increase a charge that was not affected by initiative or to impose an entirely new charge without voter approval.
The California Supreme Court further stated in Bighorn that it was not holding that the initiative power is free of all limitations and was not determining whether the initiative power is subject to the statutory provision requiring that water service charges be set at a level that will pay debt service on bonded debt and operating expenses. Such initiative power could be subject to the limitations imposed on the impairment of contracts under the contract clause of the United States Constitution. On July 1, 1997, a bill was signed into law by the Governor of the State enacting Government Code Section 5854, which states: “Section 3 of Article XIIIC of the California Constitution, as adopted at the November 5, 1996 general election, shall not be construed to mean that any owner or beneficial owner of a municipal security, purchased before or after that date, assumes the risk of, or in any way consents to, any action by initiative measure that constitutes an impairment of contractual rights protection by Section 10 of Article I of the United States Constitution.” Government Code Section 5854 appears to limit the voters’ power to repeal or reduce Water System fees and Sewer System fees and charges if such reductions would -366-
43 interfere with the Town’s payment of debt service on the 2023 Bonds. If Government Code Section 5854 becomes the subject of a challenge, however, no guarantee can be made that the courts will agree with such interpretation.
On August 3, 2020, the State Supreme Court issued an opinion in Wilde v. City of Dunsmuir (2020) 9 Cal.5th 1105, holding that taxpayers do not have the right under Proposition 218 to challenge water rates by referendum, and the Town does not believe that Article XIIIC grants to the voters within the Town the power (whether by initiative under Article XIIIC or otherwise, or by referendum, which is not authorized under Article XIIIC) to repeal or reduce rates and charges for water service in a manner that would interfere with the contractual obligations of the Town or the obligation of the Town to maintain and operate the Water Enterprise. There can be no assurance, however, as to the availability of particular remedies adequate to protect the Beneficial Owners of the 2023 Bonds. Remedies that are available to Beneficial Owners of the 2023 Bonds in the event of a default by the Town are dependent upon judicial actions which are often subject to discretion and delay and could prove both expensive and time consuming to obtain. So long as the 2023 Bonds are held in book-entry form, DTC (or its nominee) will be the sole registered owner of the 2023 Bonds and the rights and remedies of the 2023 Bond Owners will be exercised through the procedures of DTC.
Article XIIID prohibits the assessment upon any parcel of property or upon any person “as an incident of property ownership” (defined to exclude fees for the provision of electrical or gas service) by a local government of any tax, assessment, fee or charge except voter-approved ad valorem property taxes and special taxes, fees or charges as a condition of property development, and assessments and “fees or charges for property related services” levied or imposed in accordance with the provisions of Article XIIID.
Under Article XIIID, revenues derived from a “fee” or “charge” (defined as “any levy other than an ad valorem tax, a special tax or an assessment, imposed by a local government upon a parcel or upon a person as an incident of property ownership, including user fees or charges for a property related service”) may not exceed the funds required to provide the “property-related service” and may not be used for any purpose other than that for which the fee or charge was imposed. Further, the amount of a “fee” or “charge” may not exceed the proportional cost of the service attributable to the parcel, no “fee” or “charge” may be imposed for a service unless that service is actually used by, or is immediately available to, the owner of the property in question, and no “fee” or “charge” may be imposed for general governmental service where the service is “available to the public at large in substantially the same manner as it is to the property owners.” In addition, in order for a “fee” or “charge” to be imposed or increased, Article XIIID provides that, among other things, the parcel upon which a fee or charge is proposed for imposition must be identified, the amount of the fee or charge proposed to be imposed on each such parcel must be calculated, written notice by mail of the proposed fee or charge must be provided to the “record owner” of each identified parcel, and a public hearing must be conducted upon the proposed fee or charge. If written protests against the proposed “fee” or “charge” are presented by a majority of owners of the identified parcels, the fee or charge may not be imposed.
The California Supreme Court in Bighorn indicated that once a property owner or resident has paid the connection charges and has become a customer of a public water agency, all charges for water delivery incurred thereafter are charges for a property-related service, whether the charge is calculated on the basis of consumption or is imposed as a fixed monthly fee. Accordingly, the imposition or increase of any fee or charge by the Town for water service or sewer service may be the subject of such a majority protest. If such a majority protest occurs, the ability of the Enterprise to generate revenues sufficient to comply with the Town’s covenants under the Indenture may be adversely affected.
Article XIIID states that, beginning July 1, 1997, all “fees” or “charges” must comply with its provisions.
It is unclear how the provisions of Article XIIID will be applied to fees or charges established prior to such date.
It is also unclear how the provisions of Article XIIID will be applied to fees or charges established after such date but prior to the Bighorn decision.
As a result of the Bighorn decision, there can be no assurance that Proposition 218 will not limit the ability of the Town to impose, levy, charge and collect increased fees and charges for water and sewer service. -367-
44 Numerous recent appellate court opinions interpret and apply Proposition 218 in the context of evaluating the validity of water-related fees and charges. The Town is unable to predict at this time how Proposition 218 will ultimately be interpreted by the courts and what, if any, further implementing legislation will be enacted, and there can be no assurance that Proposition 218 will not limit the future ability of the Town to impose, levy, charge and collect increased fees and charges for water service and sewer service. Any such limit to the future ability of the Town to impose, levy, charge and collect increased fees and charges for water service and sewer service may impact the ability of the Town to pay debt service on the 2023 Bonds and any other Obligations.
Constitutional Limit on Appropriations, Fees, and Charges If a portion of the Enterprise rates or connection charges were determined by a court to exceed the reasonable costs of providing service, any fee which the Town charges may be considered to be a “special tax,” which under Articles XIIIA or XIIID of the California Constitution must be authorized by a two-thirds vote of the affected electorate. This requirement is applicable to the Town’s rates for service provided by the Enterprise. The reasonable cost of service provided by the Enterprise has been determined by the State Controller to include depreciation and allowance for the cost of capital improvements. In addition, the State courts have determined that fees such as connection fees (capacity charges) will not be special taxes if they approximate the reasonable cost of constructing Enterprise improvements contemplated by the local agency imposing the fee. Such court determinations have been codified in the Government Code of the State of California (Section 66000 et seq.).
Under Article XIIIB of the California Constitution, state and local government entities have an annual “appropriations limit” which limits their ability to spend certain moneys called “appropriations subject to limitation,” which consists of tax revenues, certain state subventions and certain other moneys, including user charges to the extent they exceed the costs reasonably borne by the entity in providing the service for which it is levying the charge. In general terms, the “appropriations limit” is to be based on certain Fiscal Year 1978/79 expenditures, and is to be adjusted annually to reflect changes in the consumer price index, population and services provided by these entities. Among other provisions of Article XIIIB, if an entity’s revenues in any year exceed the amount permitted to be spent, the excess would have to be returned by revising tax rates or fee schedules over the subsequent two years.
The Town is of the opinion that the rates and use charges imposed by the Town in connection with the Enterprise do not exceed the costs it reasonably bears in providing such services.
Taxpayer Protection and Government Accountability Act Initiative On February 1, 2023, the California Secretary of State announced that a ballot initiative, designated as Initiative 1935 and known as the “Taxpayer Protection and Government Accountability Act,” had received the required number of signatures to appear on the November 5, 2024 ballot.
If approved by a majority of voters casting a ballot at the November 5, 2024 Statewide election, Initiative 1935 would make numerous significant changes to Articles XIII, XIIIA, XIIIC and XIIID of the California Constitution to further limit the authority of local governments, and electors via the initiative process, to adopt and impose taxes and fees. See the caption “CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND CHARGES.” The full text of Initiative 1935 may be viewed at the website of the California Attorney General.
The Town cannot predict whether Initiative 1935 will be approved by a majority of voters casting a ballot at the November 5, 2024 Statewide election. If Initiative 1935 is approved, the Town cannot provide any assurances as to the effect of the implementation or judicial interpretations of Initiative 1935 on the finances of the State or the Town.
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45 Limitations on Remedies Available to Bondowners; Bankruptcy The ability of the Town to comply with its covenants under the Indenture and to generate Net Revenues sufficient to pay principal of and interest on the 2023 Bonds may be adversely affected by actions and events outside of the control of the Town, and may be adversely affected by actions taken (or not taken) by voters, property owners, taxpayers or payers of assessments, fees and charges. See “Proposition 218” above.
Furthermore, any remedies available to the owners of the 2023 Bonds upon the occurrence of an event of default under the Indenture are in many respects dependent upon judicial actions, which are often subject to discretion and delay and could prove both expensive and time consuming to obtain.
In addition to the limitations on Bondholder remedies contained in the Indenture, the rights and obligations under the 2023 Bonds and the Indenture may be subject to the following: the United States Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors’ rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under State law of certain remedies; the exercise by the United States of America of the powers delegated to it by the Federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State of California and its governmental bodies in the interest of serving a significant and legitimate public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the Owners of the 2023 Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of delay, limitation or modification of their rights, or reduction or discharge of amounts owed or payments due to Owners of the 2023 Bonds.
Natural Disasters
The Town, like all California communities, may be subject to unpredictable seismic activity, fires, flood, or other natural disasters. Seismic activity represents a potential risk for damage to buildings, roads, bridges, and property within the Town. In addition, land susceptible to seismic activity may be subject to liquefaction during the occurrence of such event. The Town is located within the seismically active San Francisco Bay region, one of the most seismically active zones in the United States. The closest fault line to the Town is the San Andreas Fault, which runs along the western boundary of the Town. The Town is not located within a flood zone.
In recent years, wildfires have caused extensive damage throughout the State. In some instances, entire neighborhoods have been destroyed. Several of the fires that occurred in recent years damaged or destroyed property in areas that were not previously considered to be at risk from such events. Some commentators believe that climate change will lead to even more frequent and more damaging wildfires in the future. Such areas affected by wildfires are more prone to flooding and mudslides that can lead to the destruction of homes. There can be no assurances that wildfires will not occur within the Town. Approximately 70% of the Town is within the Wildland Urban Interface (WUI) zone. Communities like the Town are at a greater risk for wildfire and have taken preventative measures to eliminate hazard and reduce risks. The Town encourages best practice actions for all properties, including defensible space parameters for residences and other buildings, and a comprehensive periodic wildfire abatement inspection program has been instituted for properties within the WUI zone. The Town also partners with Firewise, a community-based fire prevention and education organization that works with residents on fuel reduction projects, and ensures that the community maintains the necessary activities to maintain “Firewise” certification.
A portion of the Town is also in the inundation zone of the Lower Crystal Springs Dam, which is located in the County and owned by the City and County of San Francisco. The California Department of Water Resources, Division of Safety of Dams (“DSOD”) assigns condition assessment ratings to dams within the State, the categories for which are designated as satisfactory, fair, poor, unsatisfactory, and unrated. Based on a condition assessment date of September 1, 2017, DSOD assigned a rating of satisfactory to the Lower Crystal Springs Dam.
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46 In the event of a severe earthquake, fire, flood or other natural disaster, there could be an interruption in the service provided by the Enterprise, resulting in a temporary reduction in the amount of Net Revenues available to pay debt service when due on the 2023 Bonds. The Indenture does not require the Town to maintain earthquake or flood insurance on the Enterprise.
Cybersecurity
As a recipient and provider of personal, private and sensitive information, the Town and its departments face multiple cyber threats including, but not limited to, hacking, viruses, ransomware and other attacks on computers and other sensitive digital networks and systems.
In accordance with its adopted IT Strategic Plan, the Town has established a comprehensive and secure IT environment with 24-hour monitoring to ensure continuity of services. The Town currently utilizes Eaton & Associates (“Eaton”), locally based in San Mateo, California, for IT managed services. In 2021, Eaton conducted a complete Town network environment assessment to identify and prioritize hardware and software updates to bolster security. Since then, physical and virtual servers have been continuously upgraded and monitored in realtime through cloud-based network management software. All traffic to and from the Town’s networks run through a firewall. The Town has not experienced any prolonged network outages or security breaches in the past five years.
Based on directions from the City Council, IT is specifically included as an area of focus in the Town’s Risk Assessment Plan, which is reviewed and updated annually. The IT Risk Assessment Plan identifies potential threats, like natural disasters and cybersecurity/ransomware attacks, and ways to mitigate the risks to critical Town systems should an incident occur. The Town backs up critical data daily. Continuity testing is done annually, and information can usually be recovered within 1-4 hours should there be a network disruption. The Town participates in PLAN Cyber Liability Insurance.
The Town has “IT Acceptable Use, Email Use and Social Media” personnel policies which are presented to employees upon hire. Cybersecurity awareness training is done annually, which includes phishing email tests.
Email services are multifactor authentication enabled, and employees are encouraged to share and save all files through secured network drives. The Town is continuously monitoring industry and local government best practices on educating employees about cybersecurity and potential personnel policy updates.
No assurances can be given that the Town’s security and operational control measures will be successful in guarding against any and each cyber threat and attack. The results of any attack on the Town’s computer and information technology systems could impact its operations and damage the Town’s digital networks and systems, and the costs of remedying any such damage could be substantial.
Climate Change
Numerous scientific studies on global climate change show that, among other effects on the global ecosystem, sea levels will rise, extreme temperatures will become more common and extreme weather events will become more frequent and more intense as a result of increasing global temperatures attributable to atmospheric pollution.
The Fourth National Climate Assessment, published by the U.S. Global Change Research Program in November 2018 (NCA4), finds that rising temperatures, sea level rise, and more frequent and intense extreme weather and climate-related events, as well as changes in average climate conditions, are expected to continue to increasingly disrupt and damage infrastructure, ecosystems, social systems, property, and regional economies and industries that depend on natural resources and favorable climate conditions.
Beyond the direct adverse material effect of global climate change itself, present, pending and possible regulations aimed at curbing the effects of climate change may directly or indirectly materially adversely affect -370-
47 the Enterprise and the ability or willingness of property owners to pay Enterprise-related charges when due. The Town cannot predict the affect climate change, or any related regulations, may have on the Enterprise.
Environmental Regulation
The kind and degree of water and sewer treatment which is effected through the Enterprise is regulated, to a large extent, by the federal government and the State of California. Treatment standards set forth in federal and State law control the operations of the Enterprise and mandate its use of technology. In the event that the federal government, acting through the Environmental Protection Agency, or the State of California, acting through the Department of Health Services, or additional federal or State legislation, should impose stricter water and/or sewer quality standards upon the Enterprise, the Enterprise’s Maintenance and Operations Costs could increase accordingly, and rates and charges would have to be increased to offset those expenses. It is not possible to predict the direction which federal or state regulation will take with respect to drinking water quality or sewage treatment standards, although it is likely that both levels of government will impose more stringent standards with attendant higher costs.
No Obligation to Tax
The obligation of the Town to pay the principal of and interest on the 2023 Bonds does not constitute an obligation of the Town for which the Town is obligated to levy or pledge any form of taxation or for which the Town has levied or pledged any form of taxation. The obligation of the Town to pay principal of and interest on the 2023 Bonds does not constitute a debt or indebtedness of the Town, the State of California, or any of its political subdivisions, within the meaning of any constitutional or statutory debt limitation or restriction.
Teeter Plan Termination
The County implemented its Teeter Plan as an alternate procedure for the distribution of certain property tax and assessment levies on the secured roll. Pursuant to its Teeter Plan, the County has elected to pay to local agencies and taxing areas, including the Town, the full amount of the tax and assessment levies instead of actual tax and assessment collections. In return, the County is entitled to retain all delinquent tax and assessment payments, penalties and interest. While in effect, the County’s Teeter Plan may protect the Owners of the 2023 Bonds from the risk of delinquencies in the payment of revenues collected for the Sewer System of the Enterprise.
The County is entitled, and under certain circumstances could be required to terminate its Teeter Plan with respect to all or part of the local agencies and taxing areas covered thereby. A termination of the Teeter Plan with respect to the Town would eliminate such protection from delinquent Sewer System Revenues. Following such termination, the Sewer System Enterprise could continue to include such amounts on the secured roll, but would only receive actual amounts collected by the County, which would not include any sewer charge delinquencies. Upon such termination, the Town would bear the cost of collection of delinquencies. See “THE ENTERPRISE — The Sewer System,” herein.
Change in Law
The State has experienced budgetary shortfalls in recent Fiscal Years. The Town cannot predict what actions will be taken in the future by the State Legislature and the California Governor to deal with changing State revenues and expenditures, and it is possible that future legislation will impact revenues of local agencies. These developments at the State level will most likely adversely affect local governments. The Town, however, does not currently anticipate that the State’s budget problems will materially adversely impact the operation of the Town’s Enterprise.
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48 Secondary Market for 2023 Bonds
There can be no guarantee that there will be a secondary market for the 2023 Bonds or, if a secondary market exists, that any 2023 Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then-prevailing circumstances. Such prices could be substantially different from the original purchase price.
Federal Tax-Exempt Status of the 2023 Bonds
The Internal Revenue Code of 1986, as amended (the “Code”) imposes a number of requirements that must be satisfied for interest on state and local obligations, such as the 2023 Bonds, to be excludable from gross income for federal income tax purposes. These requirements include limitations on the use of 2023 Bond proceeds, limitations on the investment earnings on 2023 Bond proceeds prior to expenditure, a requirement that certain investment earnings on the 2023 Bond proceeds be paid periodically to the United States and a requirement that the issuers file an information report with the Internal Revenue Service (the “IRS”). The Town has covenanted in certain of the documents referred to herein that it will comply with such requirements. Failure to comply with the requirements stated in the Code and related regulations, rulings and policies may result in the treatment of interest on the 2023 Bonds as taxable, retroactively to the date of issuance of such 2023 Bonds.
IRS Audit of Tax-Exempt Issues
The IRS has initiated an expanded program for the auditing of tax-exempt issues, including both random and targeted audits. It is possible that the 2023 Bonds will be selected for audit by the IRS. It is also possible that the market value of the 2023 Bonds might be affected as a result of such an audit of the 2023 Bonds (or by an audit of similar obligations).
Parity Debt
As described in “SECURITY FOR THE 2023 BONDS – Parity Debt” above, the Indenture permits the Town to issue Parity Debt, its obligations under which would be payable on a parity with the payment of debt service of the 2023 Bonds. In the event of a decline in Net Revenues available to pay debt service on the 2023 Bonds, the existence of Parity Debt could adversely affect the Town’s ability to pay debt service on the 2023 Bonds.
TAX MATTERS
In the opinion of Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, compliance with certain covenants, interest on the 2023 Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Code and is exempt from State of California personal income taxes. Bond Counsel is of the further opinion that interest on the 2023 Bonds is not a specific preference item for purposes of federal alternative minimum tax imposed on individuals and corporations, however, interest is taken into account in determining the annual adjusted financial statement income of certain corporations for the purpose of computing the alternative minimum tax imposed on certain corporations.
The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the 2023 Bonds. The Town has covenanted to comply with certain restrictions designed to ensure that interest on the 2023 Bonds will not be included in federal gross income. Failure to comply with these covenants may result in interest on the 2023 Bonds being included in federal gross income, possibly from the date of original issuance of the 2023 Bonds. The opinion of Bond Counsel assumes compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring (or not occurring) after the -372-
49 date of issuance of the 2023 Bonds may adversely affect the value of, or the tax status of interest on, the 2023 Bonds.
Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the 2023 Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Owners from realizing the full current benefit of the tax status of such interest. For example, legislative proposals are announced from time to time which generally would limit the exclusion from gross income of interest on obligations like the 2023 Bonds to some extent for taxpayers who are individuals and whose income is subject to higher marginal income tax rates.
Other proposals have been made that could significantly reduce the benefit of, or otherwise affect, the exclusion from gross income of interest on obligations like the 2023 Bonds. The introduction or enactment of any such legislative proposals, clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the 2023 Bonds. Prospective purchasers of the 2023 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, and regarding the impact of future legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.
Certain requirements and procedures contained or referred to in the Indenture, the tax certificate, and other relevant documents may be changed and certain actions (including, without limitation, defeasance of the 2023 Bonds) may be taken or omitted under the circumstances and subject to the terms and conditions set forth in such documents. Bond Counsel expresses no opinion as to the exclusion from gross income of interest on any Bond if any such change occurs or action is taken or omitted upon the advice or approval of counsel other than Best Best & Krieger LLP.
The IRS has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the 2023 Bonds will be selected for audit by the IRS. It is also possible that the market value of the 2023 Bonds might be affected as a result of such an audit of the 2023 Bonds (or by an audit of other similar bonds).
Although Bond Counsel is of the opinion that interest on the 2023 Bonds is excluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of interest on, the 2023 Bonds may otherwise affect an Owner’s federal or state tax liability. The nature and extent of these other tax consequences will depend upon the particular tax status of the Bond Owner or the Owner’s other items of income or deduction, and Bond Counsel expresses no opinion regarding any such other tax consequences.
A copy of the proposed form of opinion of Bond Counsel is attached hereto as Appendix D.
CERTAIN LEGAL MATTERS
Best Best & Krieger LLP, Bond Counsel, will render an opinion with respect to the validity of the 2023 Bonds, the form of which opinion is set forth in Appendix D. Bond Counsel has assumed no responsibility for the accuracy, completeness or fairness of the Official Statement. Certain legal matters will also be passed upon for the Town by Best Best & Krieger LLP, as Disclosure Counsel and City Attorney to the Town.
FINANCIAL STATEMENTS
The Town’s comprehensive annual financial report for the Fiscal Year ended June 30, 2022, included in Appendix B, has been audited by Eide Bailly LLP (the “Auditor”). The Auditor was not requested to consent to the inclusion of its report in Appendix B, and it has not undertaken to update its report or to take any action intended or likely to elicit information concerning the accuracy, completeness or fairness of the statements made in the Official Statement, and no opinion is expressed by the Auditor with respect to any event subsequent to the date of its report.
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50 MUNICIPAL ADVISOR
Acacia Financial Group, Inc., Mount Laurel, New Jersey, is employed as Municipal Advisor and Swap Advisor to the Town in connection with the issuance of the 2023 Bonds. The Municipal Advisor does not assume any responsibility for the information, covenants and representations contained in any of the legal documents with respect to the federal income tax status of the 2023 Bonds, or the possible impact of any present, pending, or future actions taken by any legislative or judicial bodies.
The Municipal Advisor has provided the following sentence for inclusion in this Official Statement. The Municipal Advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to the Town and, as applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Municipal Advisor does not guarantee the accuracy or completeness of such information.
RATING
In connection with the issuance and delivery of the 2023 Bonds, S&P Global Ratings (“S&P”) has assigned their municipal bond rating of “[__]” to the 2023 Bonds. Such rating reflects only the view of such organization and any desired explanation of the significance of such rating should be obtained from S&P.
Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that this rating will continue for any given period of time or that this rating will not be revised downward or withdrawn entirely by S&P, if in the judgment of such rating agency, circumstances so warrant. Any such downward revision or withdrawal of any rating obtained may have an adverse effect on the market price of the 2023 Bonds.
Neither the Town nor the Underwriter has undertaken any responsibility either to bring to the attention of the owners of the 2023 Bonds any proposed change in or withdrawal of a rating or to oppose any such proposed revision or withdrawal. See “CONTINUING DISCLOSURE” below and “APPENDIX C - FORM OF CONTINUING DISCLOSURE AGREEMENT” herein regarding covenants of the Town to provide notice of rating changes to EMMA (as defined below).
Any such downward change in or withdrawal of a rating might have an adverse effect on the market price or marketability of the 2023 Bonds.
LITIGATION
There is no controversy or litigation of any nature now pending against the Town (with service of process having been completed), or to the knowledge of its officers, threatened, restraining or enjoining the issuance, sale, execution or delivery of the 2023 Bonds, or contesting the validity of the 2023 Bonds, any proceeds of the Town, the pledge or application of the money or security provided for payment of the 2023 Bonds, or the existence or powers of the Town.
CONTINUING DISCLOSURE
The Town has covenanted for the benefit of owners of the 2023 Bonds to provide certain financial information and operating data relating to the Town and the Enterprise by not later than April 1 of each year following the end of the Town’s fiscal year, commencing with the report for Fiscal Year ending June 30, 2023 (the “Annual Report”) and to provide notices of the occurrence of certain enumerated events. The Annual Report and the notices of enumerated events will be filed by the Dissemination Agent with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system (“EMMA”) or any successor assigned by the Municipal Securities Rulemaking Board or Securities and Exchange Commission. These covenants have been made in order to assist the Underwriter in complying with Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended (the “Rule”). The specific nature of the information to be contained in the -374-
51 Annual Report or the notices of enumerated events by the Town is set forth in “APPENDIX C — FORM OF CONTINUING DISCLOSURE AGREEMENT.”
In the five years preceding the date of this Official Statement, the Town has not been obligated under any undertaking pursuant to the Rule.
UNDERWRITING
The 2023 Bonds are being purchased by Loop Capital Markets LLC (the “Underwriter”). The Underwriter has agreed to purchase the 2023 Bonds at a price of $______________ (being $__________ aggregate principal amount thereof, less Underwriter’s discount of $___________ and plus a net original issue premium of $____________. The purchase agreement relating to the 2023 Bonds provides that the Underwriter will purchase all of the 2023 Bonds if any are purchased. The obligation to make such purchase is subject to certain terms and conditions set forth in such purchase agreement, the approval of certain legal matters by counsel, and certain other conditions.
The Underwriter may offer and sell the 2023 Bonds to certain dealers and others at prices lower or yields greater than the offering prices or yields stated on the inside cover page of the Official Statement. The offering prices or yields may be changed from time to time by the Underwriter. -375-
52 EXECUTION
The execution of this Official Statement and its delivery have been authorized by the City Council of the Town.
TOWN OF HILLSBOROUGH
By:
Authorized Officer
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A-1
APPENDIX A
SUMMARY OF CERTAIN PROVISIONS
OF THE INDENTURE OF TRUST
Certain provisions of the Indenture are summarized below. This summary does not purport to be complete or definitive and is qualified in its entirety by reference to the full terms of the Indenture. -377-
B-1
APPENDIX B
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR FISCAL YEAR ENDED JUNE 30, 2022
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C-1
APPENDIX C
FORM OF THE CONTINUING DISCLOSURE AGREEMENT
THIS CONTINUING DISCLOSURE AGREEMENT (the “Disclosure Agreement”), dated as of [____________ 1, 2023, is executed and delivered by the Town of Hillsborough (the “Town”) and Acacia Financial Group, Inc., as dissemination agent (the “Dissemination Agent”), in connection with the issuance by the Town of $[____] aggregate principal amount of the Town of Hillsborough Revenue Refunding Bonds, Series 2023 (Water and Sewer Projects) (the “Bonds”). The Bonds are being issued pursuant to an Indenture of Trust, dated as of June 1, 2023 (the “Indenture”), by and between the Town and The Bank of New York Mellon Trust Company, N.A., as trustee.
The Town and the Dissemination Agent covenant and agree as follows:
Section 1. Purpose of the Disclosure Agreement.
This Disclosure Agreement is being executed and delivered by the Town and the Dissemination Agent for the benefit of the owners of the Bonds and in order to assist the Participating Underwriters in complying with the Rule.
Section 2. Definitions.
In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the Town pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement.
“Annual Report Date” shall mean the date in each year not later than April 1 following the end of the Town’s fiscal year, the end of which, as of the date of this Disclosure Agreement, is June 30. “Dissemination Agent” shall mean, initially, Acacia Financial Group, Inc., acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent that is so designated in writing by the Town and which has filed with the then current Dissemination Agent a written acceptance of such designation. “Listed Events” shall mean any of the events listed in Section 5(a) of this Disclosure Agreement. “MSRB” shall mean the Municipal Securities Rulemaking Board. “Official Statement” shall mean the Official Statement relating to the Bonds. “Participating Underwriters” shall mean Loop Capital Markets LLC, the original underwriters of the Bonds required to comply with the Rule in connection with the offering of the Bonds. “Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.
Section 3. Provision of Annual Reports.
(a) The Town shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing April 1, 2024, provide to MSRB an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Agreement. Not later than fifteen (15) calendar days prior to each such Annual Report Date, the Town shall provide its Annual Report to the Dissemination Agent, if such -379-
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Dissemination Agent is a different entity than the Town. The Annual Report must be submitted in an electronic format as prescribed by MSRB, accompanied by such identifying information as is prescribed by MSRB, and may include by reference other information as provided in Section 4 of this Disclosure Agreement; provided that the audited financial statements of the Town (which include information regarding the funds and accounts of the Town), if any, may be submitted separately from and later than the balance of the Annual Report if they are not available by the applicable Annual Report Date. If the Town’s fiscal year changes, the Town shall provide written notice of such change in the same manner as for a Listed Event under Section 5(c). The Town shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished hereunder. The Dissemination Agent may conclusively rely upon such certification of the Town and shall have no duty or obligation to review such Annual Report.
(b) If the Town is unable to provide to MSRB an Annual Report by the date required in subsection (a), the Town shall, in a timely manner, send to MSRB a notice in substantially the form attached hereto as Exhibit A. Such notice must be submitted in an electronic format as prescribed by MSRB, accompanied by such identifying information as prescribed by MSRB.
(c) The Dissemination Agent shall:
(i) provide any Annual Report received by it to MSRB by the date required in subsection (a); and
(ii) file a report with the Town certifying that the Annual Report has been provided to MSRB pursuant to this Disclosure Agreement, and stating the date the Annual Report was so provided.
Section 4. Content of Annual Reports. The Annual Report shall contain or incorporate by reference the following:
(a) Audited financial statements of the Town, which include information regarding the funds and accounts of the Town, if any, for the most recent fiscal year of the Town then ended. If the audited financial statements are not available by the time the Annual Report is required to be filed, the Annual Report shall contain any unaudited financial statements of the Town in a format similar to the audited financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
Audited financial statements of the Town shall be audited by such auditor as shall then be required or permitted by State law or the Indenture. Audited financial statements shall be prepared in accordance with generally accepted accounting principles as prescribed for governmental units by the Governmental Accounting Standards Board; provided, however, that the Town may from time to time, if required by federal or state legal requirements, modify the basis upon which its financial statements are prepared. In the event that the Town shall modify the basis upon which its financial statements are prepared, the Town shall provide a notice of such modification to MSRB, including a reference to the specific federal or state law or regulation specifically describing the legal requirements for the change in accounting basis.
(b) An update of the information contained in the following tables under the heading “THE ENTERPRISE ” in the Official Statement for the Bonds for the most recent fiscal or calendar year, as applicable, if the information is not included elsewhere in the Annual Report:
1. Table 1 - Water Purchases from SFPUC;
2. Table 3 - Number of Water Meters;
3. Table 4 - Water Rates;
4. Table 5 - Water Service Charge;
5. Table 6 - Water Connection Fees;
6. Table 8 - Water System Annual Revenue;
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7. Table 9 - Active Sewer Customer Accounts;
8. Table 11 - Annual Residential Sewer Rate History;
9. Table 14 - Sewer Service Charge Revenue; and
10. Tables 15A, 15B, and 15C - Operating History of the Water Fund, Sewer Fund, and Combined Enterprise Funds.
Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Town or related public entities, which are available to the public on MSRB’s Internet web site or filed with the Securities and Exchange Commission. The Town shall clearly identify each such other document so included by reference.
Section 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the Town shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds:
(i) principal and interest payment delinquencies;
(ii) non-payment related defaults, if material;
(iii) unscheduled draws on any reserve fund for the Bonds reflecting financial difficulties;
(iv) unscheduled draws on any credit enhancements securing the Bonds reflecting financial difficulties;
(v) substitution of any credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB), or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds;
(vii) modifications to the rights of owners of the Bonds, if material; (viii) Bond calls, if material, and tender offers for the Bonds; (ix) defeasances;
(x) any release, substitution, or sale of property securing repayment of the Bonds, if material;
(xi) rating changes;
(xii) any bankruptcy, insolvency, receivership, or similar event of the Town. This Listed Event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the Town in a proceeding under the Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Town, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Town; -381-
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(xiii) the consummation of a merger, consolidation, or acquisition involving the Town or the sale of all or substantially all of the assets of the Town, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (xiv) appointment of a successor or additional trustee or the change of name of a trustee, if material;
(xv) the incurrence of a financial obligation of the Town, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the Town, any of which affect security holders, if material; and (xvi) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the Town, any of which reflect financial difficulties.
(b) Upon and after the occurrence of a Listed Event listed under subsection (a)(ii), (a)(vii), (a)(viii), (a)(x), (a)(xiii), (a)(xiv), (a)(xv) or (a)(xvi) above, the Town shall as soon as possible determine if such event would be material under applicable federal securities laws. If the Town determines that knowledge of the occurrence of such Listed Event would be material under applicable federal securities laws, the Town shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to subsection (d) below.
(c) Upon and after the occurrence of any Listed Event (other than a Listed Event listed under subsection (a)(ii), (a)(vii), (a)(viii), (a)(x), (a)(xiii), (a)(xiv), (a)(xv) or (a)(xvi) above), the Town shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to subsection (d) below.
(d) If the Dissemination Agent has been instructed by the Town to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occurrence with MSRB not in excess of ten (10) business days after the occurrence of such Listed Event. Such notice must be submitted in an electronic format as prescribed by MSRB, accompanied by such identifying information as prescribed by MSRB.
Notwithstanding the foregoing, notice of a Listed Event described in subsection (a)(viii) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to owners of affected Bonds pursuant to the Indenture. The Town hereby agrees that the undertaking set forth in this Disclosure Agreement is the responsibility of the Town and that the Trustee or the Dissemination Agent shall not be responsible for determining whether the Town’s instructions to the Dissemination Agent under this Section 5 comply with the requirements of the Rule.
Section 6. Termination of Reporting Obligation. The obligations of the Town, the Trustee, and the Dissemination Agent under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption, or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the Town shall give notice of such termination in the same manner as for a Listed Event under Section 5(c).
Section 7. Dissemination Agent. The Town may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign by providing thirty days’ written notice to the Town and the Trustee. The Dissemination Agent shall not be responsible for the content of any report or notice prepared by the Town. The Dissemination Agent shall have no duty to prepare any information report nor shall the Dissemination Agent be responsible for filing any report not provided to it by the Town in a timely manner and in a form suitable for filing.
If at any time there is no designated Dissemination Agent, the Town shall act as Dissemination Agent. -382-
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Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Town and the Dissemination Agent may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, if the Town has received an opinion of counsel knowledgeable in federal securities laws to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule.
Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Town from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Town chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Town shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of the occurrence of a Listed Event.
Section 10. Default. In the event of a failure of the Town to comply with any provision of this Disclosure Agreement, any Owner of a Bond, Participating Underwriters, or Trustee may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Town to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed a default under the Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the Town to comply with this Disclosure Agreement shall be an action to compel performance.
Section 11. Duties, Immunities, and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and the Town agrees to indemnify and save the Dissemination Agent and its officers, directors, employees, and agents, harmless against any loss, expense and liabilities that it may incur arising out of or in the exercise or performance of its duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the Town under this section shall survive resignation or removal of the Dissemination Agent and payment of all of the Bonds. The Dissemination Agent shall not be responsible in any manner for the format or content of any notice or Annual Report prepared by the Town pursuant to this Disclosure Agreement. The Town shall pay the reasonable fees and expenses of the Dissemination Agent for its duties hereunder.
Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Town, the Trustee, the Dissemination Agent, the Participating Underwriters, and Owners from time to time of the Bonds, and shall create no rights in any other person or entity. -383-
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Section 13. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
Date: ____________, 2023
TOWN OF HILLSBOROUGH
By:
ACACIA FINANCIAL GROUP, INC., as
Dissemination Agent
By:
Authorized Officer
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EXHIBIT A
NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Town of Hillsborough
Name of Bond Issue: Town of Hillsborough Revenue Refunding Bonds, Series 2023 (Water and Sewer Projects)
Date of Issuance: ___________, 2023
NOTICE IS HEREBY GIVEN that the Town of Hillsborough (the “Town”) has not provided an Annual Report with respect to the above-named Bonds as required by Section 3 of the Continuing Disclosure Agreement, dated _____, 2023, by and between the Town and Acacia Financial Group, Inc., as dissemination agent. The Town anticipates that the Annual Report will be filed by __________.
Dated: ____________, 2023 TOWN OF HILLSBOROUGH
By:
Its: Authorized Officer
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APPENDIX D
FORM OF OPINION OF BOND COUNSEL
________, 2023
City Council
Town of Hillsborough
1600 Floribunda Avenue
Hillsborough, California 94010
Re: $___________∗ Town of Hillsborough Revenue Refunding Bonds, Series 2023 (Water and Sewer Projects)
Ladies and Gentlemen:
We have reviewed the Constitution and the laws of the State of California and certain proceedings taken by the Town of Hillsborough (the “Town”) in connection with the issuance by the Town of its $________* Revenue Refunding Bonds, Series 2023 (Water and Sewer Projects) (the “Bonds”). The Bonds have been issued under that certain Indenture of Trust, dated as of June 1, 2023 (the “Indenture”), by and between the Town and The Bank of New York Mellon Trust Company, N.A., as trustee and pursuant to the provisions of Article II (commencing with Section 53580) of Chapter 3 of Part I of Division 2 of Title 5 of the California Government Code (the “Refunding Law”). The City Council adopted its resolution approving the issuance of the Bonds on May 8, 2023 (the “Resolution”). The proceeds of the Bonds have been applied by the Town to refinance certain improvements to the Enterprise.
In such connection, we have reviewed the Indenture, the tax certificate of the Town for the Bonds dated the date hereof (the “Tax Certificate”), certificates of the Town and others, and such other documents, opinions and matters to the extent we deemed necessary to render the opinions set forth herein.
The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other events come to our attention after the date hereof. Accordingly, this opinion speaks only as of its date and is not intended to, and may not, be relied upon in connection with any such actions, events or matters. Our engagement with respect to the Bonds has concluded with their issuance, and we disclaim any obligation to update this letter. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) and the due and legal execution and delivery thereof by, and validity against, any parties other than the Town. We have assumed, without undertaking to verify, the accuracy of the factual matters represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions, referred to in the second paragraph hereof. Furthermore, we have assumed compliance with all covenants and agreements contained in the Indenture and the Tax Certificate, including (without limitation) covenants and agreements compliance with which is necessary to ensure that future actions, omissions or events will not cause interest on the Bonds to be included in gross income for federal income tax purposes. We call attention to the fact that the rights and obligations under the Bonds, the Indenture and the Tax Certificate and their enforceability may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases, and to the limitations on legal remedies against cities and their subordinate entities in the State of California. We express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of ∗ Preliminary, subject to change.
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venue, waiver or severability provisions contained in the documents mentioned in the preceding sentence. Finally, we undertake no responsibility for the accuracy, completeness or fairness of the Official Statement or other offering materials relating to the Bonds and express no opinion with respect thereto.
All terms not defined herein have the meaning ascribed to those terms in the Indenture.
Based upon the foregoing, we are of the opinion, under existing law, that:
1. The Bonds have been duly and validly authorized by the Town and are legal, valid, and binding limited obligations of the Town. The Bonds are secured and payable solely from sources provided therefor in the Indenture.
2. The Indenture has been duly authorized by the Town, and constitutes the valid and legally binding obligation of the Town enforceable against the Town in accordance with its terms, as such enforcement may be limited by bankruptcy, insolvency, moratorium, transfer or conveyance or other laws affecting creditors’ rights generally, or by the exercise of judicial discretion in accordance with general principles of equity or otherwise in appropriate cases; provided, however, that we express no opinion with respect to any indemnification, contribution, choice of law or waiver provisions contained therein.
3. The Indenture creates a valid pledge of that which the Indenture purports to pledge, subject to the provisions of the Indenture, except to the extent that the enforceability of the Indenture may be limited by moratorium, bankruptcy, reorganization, fraudulent conveyance or transfer, insolvency or other laws affecting creditors’ rights generally, or by the exercise of judicial discretion in accordance with general principles of equity or otherwise in appropriate cases.
4. Under existing statutes, regulations, rulings and court decisions, the interest on the Bonds is excluded from gross income for purposes of federal income taxation. Interest on the Bonds is not a specific preference item for purposes of the federal alternative minimum tax imposed on individual and corporations, however, interest on the Bonds is taken into account in determining the annual adjusted financial statement income of certain corporations for the purpose of computing the alternative minimum tax imposed on certain corporations.
Although the interest on the Bonds is excluded from gross income for purposes of federal income taxation, the accrual or receipt of interest on the Bonds, or any portion thereof, may otherwise affect the federal income tax liability of the recipient. The extent of these other tax consequences will depend on the recipient’s particular tax status or other items of income or deduction. We express no opinion regarding any such consequences.
5. Interest on the Bonds is exempt from State of California personal income tax.
Respectfully submitted,
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APPENDIX E
DTC AND THE BOOK-ENTRY ONLY SYSTEM
The description that follows of the procedures and recordkeeping with respect to beneficial ownership interests in the Bonds, payment of principal of, premium, if any, and interest on the Bonds to Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interests in the Bonds, and other related transactions by and between DTC, Participants and Beneficial Owners, is based on information furnished by DTC which the Town believes to be reliable, but the Town does not take responsibility for the completeness or accuracy thereof. The Town cannot and does not give any assurances that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners either (a) payments of principal, premium, if any, and interest with respect to the Bonds or (b) certificates representing ownership interests in or other confirmation of ownership interests in the Bonds, or that they will so do on a timely basis or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Official Statement. The current “Rules” applicable to DTC are on file with the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants are on file with DTC.
The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the Bonds.
The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered bond will be issued for each maturity (and each individual yield in the case of bifurcated maturities) of the Bonds, in the aggregate principal amount of such issue, and will be deposited with DTC.
DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+.
The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com; provided that nothing contained in such website is incorporated into this Official Statement.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing -388-
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their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Indenture. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit will agree to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
Redemption notices will be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Town as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Town or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Trustee, or the Town, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Town or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
The Town may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, bond certificates will be printed and delivered to DTC.
NEITHER THE TOWN NOR THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR
OBLIGATION TO DTC PARTICIPANTS, INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS WITH
RESPECT TO THE PAYMENTS OR THE PROVIDING OF NOTICE TO DTC PARTICIPANTS, INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS OR THE SELECTION OF BONDS FOR REDEMPTION. -389-
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DTC (or a successor securities depository) may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the Town. The Town, in its sole discretion and without the consent of any other person, may terminate the services of DTC (or a successor securities depository) with respect to the Bonds. The Town undertakes no obligation to investigate matters that would enable the Town to make such a determination. In the event that the book-entry system is discontinued as described above, the requirements of the Indenture will apply.
THE TOWN AND THE UNDERWRITER CANNOT AND DO NOT GIVE ANY ASSURANCES
THAT DTC, THE PARTICIPANTS OR OTHERS WILL DISTRIBUTE PAYMENTS OF PRINCIPAL,
INTEREST OR PREMIUM, IF ANY, WITH RESPECT TO THE BONDS PAID TO DTC OR ITS NOMINEE
AS THE REGISTERED OWNER, OR WILL DISTRIBUTE ANY REDEMPTION NOTICES OR OTHER
NOTICES, TO THE BENEFICIAL OWNERS, OR THAT THEY WILL DO SO ON A TIMELY BASIS OR WILL SERVE AND ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. THE
AGENCY AND THE UNDERWRITER ARE NOT RESPONSIBLE OR LIABLE FOR THE FAILURE OF DTC
OR ANY PARTICIPANT TO MAKE ANY PAYMENT OR GIVE ANY NOTICE TO A BENEFICIAL OWNER WITH RESPECT TO THE BONDS OR AN ERROR OR DELAY RELATING THERETO.
The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Town deems reliable, but the Town takes no responsibility for the accuracy thereof.
DTC may discontinue providing its services as securities depository with respect to the bond certificates at any time by giving reasonable notice to the Town or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, Bonds are required to be printed and delivered as described in the Indenture.
The Town may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bonds will be printed and delivered as described in the Indenture and payment of interest to each Owner who owns of record $1,000,000 or more in aggregate principal amount of Bonds may be made to such Owner by wire transfer to such wire address within the United States that such Owner may request in writing for all Interest Payment Dates following the 15th day after the Trustee’s receipt of such request.
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APPENDIX F
GENERAL INFORMATION ABOUT THE
TOWN OF HILLSBOROUGH AND SAN MATEO COUNTY
The following information concerning the Town of Hillsborough (the “Town”) and San Mateo County (the “County”) is included only for the purpose of supplying general information regarding the service area of the Enterprise. The 2023 Bonds are payable solely from the sources described herein (see “SECURITY FOR THE BONDS”). The 2023 Bonds are not a debt of the Town, the County, the State of California (the “State”) or any of its political subdivisions, and neither the Town, the County, the State nor any of its political subdivisions is liable therefor.
General Information
The Town was incorporated on May 5, 1910 and is located on the San Francisco Peninsula in the County of San Mateo, approximately 15 miles south of San Francisco. The Town is bordered by the City of San Mateo on the south and east, the City of Burlingame on the north and east, and Interstate Highway 280 on the west. As of January 1, 2022, the Town had a population of 11,443 and had a certified assessed valuation for Fiscal Year 2022-23 of approximately $12.48 billion (the 2023 Bonds are not secured by taxes).
The County is located on the California coast and borders the City and County of San Francisco on the north, Santa Clara and Santa Cruz Counties on the south, and Alameda County on the east. The County is a major employment base, including in the technology, pharmaceutical and biotech areas, and is also accessible to the San Francisco and Silicon Valley via Interstate 280 or U.S. Highway 101. The County has an approximate total area of 741 square miles, of which 448 square miles is land and 293 square miles is water. It is the third-smallest county in California by land area.
The County was formed in 1856 after San Francisco County, one of the state's 18 original counties since California's statehood in 1850, was split apart. Until 1856, San Francisco's city limits extended west to Divisadero Street and Castro Street, and south to 20th Street. In response to the lawlessness and vigilantism that escalated rapidly between 1855 and 1856, the California government decided to divide the county. A straight line was then drawn across the tip of the San Francisco Peninsula just north of San Bruno Mountain; everything south of the line became the new San Mateo County.
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Population
The following table lists population estimates for the Town, the County and the State of California for the last five calendar years, as of January 1.
TOWN OF HILLSBOROUGH, SAN MATEO COUNTY AND STATE OF CALIFORNIA Population Estimates
Calendar Years 2018 through 2022 as of January 1
2018 2019 2020 2021 2022
Atherton 6,948 6,950 6,942 6,806 6,718
Belmont 26,898 26,808 26,669 27,587 27,203
Brisbane 4,654 4,642 4,621 4,789 4,721
Burlingame 30,318 30,224 30,068 30,699 30,283
Colma 1,476 1,496 1,678 1,391 1,370
Daly City 109,088 109,102 108,767 103,930 102,875
East Palo Alto 30,747 30,716 30,630 29,423 28,963
Foster City 32,746 33,221 33,025 33,325 33,056
Half Moon Bay 12,423 12,444 12,404 11,462 11,308
Hillsborough 11,486 11,444 11,442 11,110 11,018
Menlo Park 35,398 35,279 35,120 33,509 33,034
Millbrae 22,975 22,874 22,742 22,807 22,512
Pacifica 38,632 38,470 38,267 38,088 37,533
Portola Valley 4,614 4,607 4,598 4,355 4,289
Redwood City 84,943 85,686 86,444 81,771 82,344
San Bruno 45,442 45,391 45,392 43,169 42,656
San Carlos 29,713 29,644 30,067 30,207 29,837
San Mateo 103,412 103,140 102,766 104,719 103,779
South San Francisco 67,193 67,070 67,730 65,090 64,492
Woodside 5,670 5,647 5,670 5,271 5,212
Balance Of County 66,151 66,305 66,019 62,088 61,459
County Total 770,927 771,160 771,061 751,596 744,662
__________________________
Source: State Department of Finance estimates (as of January 1).
Employment and Industry
The unemployment rate in the San Francisco-Redwood City-South San Francisco Metropolitan Division (“MD”) was 2.0% in December 2022, down from a revised 2.3% in November 2022, and below the year ago estimate of 2.9%. This compares with an unadjusted unemployment rate of 3.7% for California and 3.3% for the nation during the same period. The unemployment rate was 2.0% in San Francisco County, and 1.9% in San Mateo County.
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The table below list employment by industry group for San Francisco and San Mateo Counties for the years 2017 to 2021.
SAN FRANCISCO-REDWOOD CITY-SOUTH SAN FRANCISCO MD
(SAN FRANCISCO AND SAN MATEO COUNTIES)
Civilian Labor Force, Employment and Unemployment
(March 2021 Benchmark)
2017 2018 2019 2020 2021
Civilian Labor Force(1) 1,008,000 1,017,500 1,037,700 995,900 977,200 Employment 979,200 993,600 1,015,200 920,600 929,900
Unemployment 28,800 23,900 22,500 75,300 47,200
Unemployment Rate 2.9% 2.3% 2.2% 7.6% 4.8%
Wage and Salary Employment:
(2)
Agriculture 1,900 1,700 1,700 1,600 1,700
Mining and Logging 100 100 200 200 200
Construction 39,800 42,400 44,400 42,600 41,100
Manufacturing 41,300 40,900 41,100 37,900 37,200
Wholesale Trade 25,000 25,200 24,500 21,700 21,400
Retail Trade 82,100 81,400 79,500 68,200 67,700
Transportation, Warehousing, Utilities 44,200 47,700 51,200 46,100 46,000 Information 76,400 85,200 97,500 105,300 112,200
Finance and Insurance 59,300 60,900 62,200 61,900 62,600 Real Estate and Rental and Leasing 21,600 22,200 23,800 21,000 20,400 Professional and Business Services 271,800 282,700 293,900 282,900 283,800 Educational and Health Services 136,000 138,900 146,100 142,100 145,800 Leisure and Hospitality 142,400 143,600 147,500 90,100 91,300 Other Services 41,100 41,400 41,500 32,500 33,600
Federal Government 17,600 16,900 16,600 17,000 16,200
State Government 36,100 37,000 37,900 38,300 40,500
Local Government 76,200 77,500 77,100 73,300 72,500
Total, All Industries(3) 1,112,700 1,145,800 1,186,500 1,082,500 1,094,200 __________________________
(1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Totals may not add due to rounding.
Source: State of California Employment Development Department. -393-
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Major Employers
The table below lists the major employers in the County as of January 2023, in alphabetical order.
SAN MATEO COUNTY
Major Employers
Employer Name Location Industry
Bart Daly City Station Daly City Transit Lines
Box Inc Redwood City Prepackaged Software
Electric Charging Station Menlo Park Research Service
Electronic Arts Inc Redwood City Game Designers (mfrs)
Fisher Investments San Mateo Investment Management
Fisher Investments Woodside Investment Management
Forced Dump Debris Box Svc Burlingame Garbage Collection Franklin Resources Inc San Mateo Asset Management
Genentech Inc San Francisco Biotechnology Products & Services Gilead Sciences Inc Foster City Biological Products (mfrs) Kaiser Permanente Redwood City Redwood City Hospitals
Kaiser Permanente South San Francisco South San Francisco Hospitals Lsa Global Redwood City Training Consultants
Meta Platforms Inc Menlo Park Social Media
Mills-Peninsula Medical Ctr Burlingame Hospitals
Palo Alto VA Hosp Med Ctr Menlo Park Government-Specialty Hosp Ex Psychiatric Plateau Systems San Mateo Computer Software
San Francisco Intl Airport-SFO San Francisco Airports
San Mateo County Behavior San Mateo Government Offices-County San Mateo County Tax Collector Redwood City Tax Return Preparation & Filing San Mateo Medical Ctr San Mateo Hospitals
Sciex LLC Redwood City Scientific Apparatus & Instruments-Mfrs SRI International Menlo Park Engineers-Research
Visa Inc Foster City Credit Card & Other Credit Plans
Youtube LLC San Bruno Online Services
__________________________
Source: State of California Employment Development Department, extracted from the America's Labor Market Information System (ALMIS) Employer Database, 2023 1st Edition.
Effective Buying Income
“Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after-tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor’s income, rental income (which includes imputed rental income of owner-occupants of non-farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance). Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.” -394-
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The following table summarizes the total effective buying income for the County, the State and the United States for the period 2019 through 2023.
SAN MATEO COUNTY,
STATE OF CALIFORNIA AND UNITED STATES
Effective Buying Income
As of January 1, 2019 through 2023
Year Area
Total Effective
Buying Income
(000s Omitted)
Median Household
Effective
Buying Income
2019
San Mateo County $ 39,578,320 $93,319
California 1,183,264,399 62,637
United States 9,017,967,563 52,841
2020
San Mateo County 40,511,605 96,614
California 1,243,564,816 65,870
United States 9,487,165,436 55,303
2021
San Mateo County 43,397,132 102,641
California 1,290,894,604 67,956
United States 9,809,944,764 56,790
2022
San Mateo County 48,351,364 120,425
California 1,452,426,153 77,058
United States 11,208,582,541 64,448
2023
San Mateo County 46,729,979 123,273
California 1,461,799,662 77,175
United States 11,454,846,397 65,326 __________________________ Source: Claritas, LLC.
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Commercial Activity
Summaries of historic taxable sales within the Town and the County during the past five years in which data is available are shown in the following tables.
TOWN OF HILLSBOROUGH
Taxable Sales
Local Sales and Use Tax
FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22
Quarter 1 $22,256 $23,965 $43,227 $30,615 $35,602
Quarter 2 21,470 32,036 33,386 32,406 38,356
Quarter 3 28,687 25,792 29,861 42,494 53,722
Quarter 4 21,994 23,155 30,051 36,902 44,228
TOTAL $94,406 $104,947 $136,525 $142,417 $171,909
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Source: The Town of Hillsborough
Total taxable sales during the first three quarters of calendar year 2022 in the Town were reported to be $130,448.64, a 13.4% increase over the total taxable sales of $114,998.29 reported during the first three quarters of calendar year 2021. The Town consists of predominately single-family residential homes, with minimal commercial activities.
SAN MATEO COUNTY
Taxable Transactions
Number of Permits and Valuation of Taxable Transactions (Dollars in Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2017 12,744 $10,949,848 21,534 $16,552,584
2018 12,802 11,674,214 22,554 17,547,097
2019 12,817 11,989,035 22,908 18,168,258
2020 13,350 10,542,136 23,985 15,940,068
2021 11,947 12,709,017 21,396 19,494,222
__________________________
Source: State Department of Tax and Fee Administration.
Total taxable sales during the first three quarters of calendar year 2022 in the County were reported to be $16,023,647,954, a 14.77% increase over the total taxable sales of $13,961,263,892 reported during the first three quarters of calendar year 2021.
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Construction Activity
Provided below are the building permits and valuations for the Town and the County for calendar years 2017 through 2021. The Town consists of primarily residential homes.
TOWN OF HILLSBOROUGH
Total Building Permit Valuations
Permit Valuation
2017 2018 2019 2020 2021
New Single-family $4,751,250 $4,796,125 $6,373,500 $5,662,250 $2,333,875 New Multi-family $0.00 $0.00 $0.00 $0.00 $0.00
Res. Alterations/Additions $70,623,376 $60,564,882 $61,426,967 $50,498,579 $83,155,046 Total Residential $75,374,626 $65,361,007 $67,800,467 $56,160,829 $85,488,921 New Commercial $0.00 $0.00 $0.00 $0.00 $0.00
New Industrial $0.00 $0.00 $0.00 $0.00 $0.00
New Other $0.00 $0.00 $0.00 $0.00 $0.00
Com. Alterations/Additions $0.00 $0.00 $0.00 $0.00 $0.00 Total Nonresidential $0.00 $0.00 $0.00 $0.00 $0.00
New Dwelling Units
Single Family 3 3 5 3 1
Multiple Family/ADU 16 4 19 20 55
TOTAL 19 7 24 23 56
__________________________
Source: Construction Industry Research Board, Building Permit Summary.
SAN MATEO COUNTY
Total Building Permit Valuations
(Valuations in Thousands)
Permit Valuation
2017 2018 2019 2020 2021
New Single-family $338,186.5 $330,908.0 $486,257.4 $273,328.3 $371,580.0 New Multi-family 210,996.5 195,226.4 322,896.6 154,590.5 223,839.7 Res. Alterations/Additions 503,351.5 424,804.7 365,784.7 310,315.5 282,684.2 Total Residential $1,052,534.5 $950,939.1 $1,174,938.7 $738,234.3 $878,103.9 New Commercial $1,207,218.1 $1,505,602.0 $737,402.4 $391,778.1 $305,651.8 New Industrial 500.0 0.0 0.0 0.0 0.0
New Other 135,392.7 77,503.7 63,741.5 64,772.4 149,595.8 Com. Alterations/Additions 1,047,885.6 972,646.5 618,727.3 923,425.0 534,973.7 Total Nonresidential $2,390,996.4 $1,050,150.2 $1,419,871.2 $1,379,975.5 $990,221.3 New Dwelling Units
Single Family 411 443 497 548 657
Multiple Family 1,169 1,036 1,049 439 638
TOTAL 1,580 1,479 1,546 987 1,285
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Source: Construction Industry Research Board, Building Permit Summary. -397-
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Transportation
San Francisco International Airport (“SFO”), the “Gateway to the Pacific,” is a world-class airport serving tens of millions of domestic and international passengers annually. One of the world’s 30 busiest airports, SFO is committed to setting the standard for the airport transportation industry. This includes being a leader in safety and security, customer service and satisfaction, community relations, environmental commitment, quality of facilities, and financial and economic vitality. SFO was the first major U.S. airport to achieve 100 percent fully automated and integrated baggage screening. Efficient operations ensure that passenger screening wait times are among the shortest in the nation.
The Port of Redwood City is also located in the County. The Port has a deep-water channel and handles bulk cargo including lumber and scrap metal.
The County is connected to downtown San Francisco, SFO, and the East Bay by the San Francisco Bay Area Rapid Transit (“BART”) system, with the closest BART station in the City of Millbrae (where BART also connects with Caltrain).
The County is also served by Caltrain, a commuter rail service between Gilroy and San Francisco, running along the Southern Pacific right-of-way, with stations near the Town. -398-
TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
OLD BUSINESS
CITY COUNCIL MEETING
MAY 08, 2023
AGENDA STAFF REPORT
ITEM SUBJECT: RESOLUTION ADOPTING THE 2023 SALARY SCHEDULE FOR THE TOWN OF HILLSBOROUGH PURSUANT TO CEQA GUIDELINE 15378
SUMMARY: An updated salary schedule reflecting contractual obligations effective in January 2023 was presented at the January 9, 2023 City Council meeting and approved. Staff discovered a mathematical error in the Communications Manager position salary calculation and the salary schedule was revised and approved by the City Council on February 13, 2023.
Staff has now discovered an error in the Public Works Assistant Superintendent position salary.
The attached salary schedule has been corrected and is submitted for City Council approval.
The California Public Employees Retirement System requires the pay scheduled to be adopted at a public meeting of the governing body.
FISCAL IMPACT: There is no fiscal impact associated with the adoption of this resolution.
ENVIRONMENTAL ISSUES: The proposed action is exempt from environmental review pursuant to the California Environmental Quality Act (CEQA) Guidelines sections 15378(b)(2) and 15378(b)(5) as ongoing administrative or organizational activities that will not result in direct or indirect physical changes in the environment.
ATTACHMENTS:
1. Resolution
2. Salary Schedule
PREPARED BY: Jan Cooke, Acting City Manager
RECOMMENDATION: Adopt the resolution adopting the revised 2023 Salary Schedule for the Town of Hillsborough pursuant to CEQA guideline 15378.
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13 RESOLUTION NO. 23-
RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH ADOPTING THE 2023 SALARY SCHEDULE FOR TOWN OF HILLSBOROUGH PURSUANT TO CEQA GUIDELINE 15378
WHEREAS, the Town of Hillsborough has established compensation rates for all positions in the Town of Hillsborough; and
WHEREAS, California Public Employees Retirement System requires a salary schedule to be adopted by the governing body of the agency at a public meeting; and
WHEREAS, the salary schedule was adopted by the City Council at the January 9, 2023 City Council meeting; and
WHEREAS, an error was discovered in the salary schedule in the Communications Manager position salary schedule and a revised salary schedule was adopted at the February 13, 2023 City Council meeting; and WHEREAS, an additional error was discovered in the Public Works Superintendent position salary calculation; and
WHEREAS, the error has been corrected and the revised salary schedule is submitted for approval by the City Council.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the Town of Hillsborough adopts the Salary Schedule with changes effective for the positions noted effective January 2, 2023.
Mayor of the Town of Hillsborough
Attest: City Clerk
This resolution was adopted by the City Council of the Town of Hillsborough at its regular meeting held on the 8th day of May 2023, by the following vote of the members thereof:
AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
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ATTACHMENT 1
Merit positions
salary effective date Step A B C D E MOU
Accountant Bi-weekly 3,903 4,098 4,303 4,518 4,744 Unrep 1/2/2023 Monthly 8,456 8,879 9,323 9,789 10,279
Annually 101,475 106,549 111,877 117,470 123,344
Accounting Technician Bi-weekly 3,101 3,256 3,419 3,590 3,769 PW&C 1/2/2023 Monthly 6,719 7,055 7,408 7,778 8,166
Annually 80,626 84,656 88,894 93,340 97,994
Administrative Assistant Bi-weekly 2,768 2,906 3,051 3,204 3,364 PW&C 1/2/2023 Monthly 5,997 6,296 6,611 6,942 7,289
Annually 71,968 75,556 79,326 83,304 87,464
Assistant City Manager Bi-weekly 7,516 7,892 8,287 8,701 9,137 Unrep 1/2/2023 Monthly 16,285 17,099 17,955 18,852 19,796
Annually 195,416 205,192 215,462 226,226 237,550
Assistant Director of Building & Planning Bi-weekly 6,296 6,611 6,942 7,289 7,653 Unrep 1/2/2023 Monthly 13,641 14,324 15,041 15,793 16,582
Annually 163,696 171,886 180,492 189,514 198,978
Assistant Director of Finance Bi-weekly 5,401 5,671 5,955 6,253 6,566 Unrep 1/2/2023 Monthly 11,702 12,287 12,903 13,548 14,226
Annually 140,426 147,446 154,830 162,578 170,716
Assistant Engineer I Bi-weekly 3,579 3,758 3,946 4,143 4,350 Unrep 1/2/2023 Monthly 7,755 8,142 8,550 8,977 9,425
Annually 93,054 97,708 102,596 107,718 113,100
Assistant Engineer II Bi-weekly 3,946 4,143 4,350 4,568 4,796 Unrep 1/2/2023 Monthly 8,550 8,977 9,425 9,897 7,890
Annually 102,596 107,718 113,100 118,768 124,696
Assistant Planner Bi-weekly 3,670 3,853 4,046 4,248 4,461 Unrep 1/2/2023 Monthly 7,952 8,348 8,766 9,204 9,665
Annually 95,420 100,178 105,196 110,448 115,983
Associate Civil Engineer Bi-weekly 4,665 4,898 5,143 5,400 5,670 Unrep 1/2/2023 Monthly 10,108 10,612 11,143 11,700 12,285
Annually 121,290 127,348 133,718 140,400 147,420
Associate Planner Bi-weekly 4,220 4,431 4,653 4,886 5,130 Unrep 1/2/2023 Monthly 9,143 9,601 10,082 10,586 11,115
Annually 109,720 115,206 120,978 127,036 133,380
Budget Analyst Bi-weekly 4,293 4,508 4,733 4,970 5,218 Unrep 1/2/2023 Monthly 9,302 9,767 10,255 10,768 11,306
Annually 111,618 117,208 123,058 129,220 135,668
Town of Hillsborough Salary Schedule
Adopted 5/08/2023
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ATTACHMENT 2
Building Attendant Hourly 15.50 20.00 Unrep
1/3/2022
Building Inspector I Bi-weekly 3,530 3,698 3,883 4,077 4,281 PW&C 1/2/2023 Monthly 7,648 8,012 8,413 8,834 9,276
Annually 91,780 96,148 100,958 106,002 111,306
Building Inspector II Bi-weekly 3,883 4,077 4,281 4,495 4,720 PW&C 1/2/2023 Monthly 8,413 8,834 9,276 9,739 10,227
Annually 100,958 106,002 111,306 116,870 122,720
Building Official Bi-weekly 5,336 5,603 5,883 6,177 6,486 Unrep 1/2/2023 Monthly 11,561 12,140 12,747 13,384 14,053
Annually 138,736 145,678 152,958 160,602 168,636
Building and Planning Technician I Bi-weekly 2,768 2,906 3,051 3,204 3,365 PW&C 1/2/2023 Monthly 5,997 6,296 6,611 6,942 7,290
Annually 71,968 75,556 79,326 83,304 87,478
Building and Planning Technician II Bi-weekly 3,045 3,197 3,357 3,525 3,701 PW&C 1/2/2023 Monthly 6,598 6,927 7,274 7,638 8,019
Annually 79,170 83,122 87,282 91,650 96,226
Chief Building Official Bi-weekly 5,870 6,163 6,471 6,795 7,135 Unrep 1/2/2023 Monthly 12,718 13,353 14,021 14,723 15,458
Annually 152,620 160,238 168,246 176,670 185,500
Chief of Police Bi-weekly 8,076 8,480 8,904 9,349 9,816 Unrep 1/2/2023 Monthly 17,498 18,373 19,292 20,256 21,268
Annually 209,976 220,480 231,504 243,074 255,216
City Clerk Bi-weekly 4,827 5,068 5,321 5,587 5,866 Unrep 1/2/2023 Monthly 10,459 10,981 11,529 12,105 12,710
Annually 125,502 131,768 138,346 145,262 152,516
City Manager Bi-weekly 10,507 Unrep
1/2/2023 Monthly 22,765
Annually 273,182
Code Enforcement Officer I Bi-weekly 3,362 3,530 3,706 3,891 4,086 Police 1/2/2023 Monthly 7,284 7,648 8,030 8,431 8,853
Annually 87,412 91,780 96,356 101,166 106,236
Code Enforcement Officer II Bi-weekly 3,706 3,891 4,086 4,290 4,505 Police 1/2/2023 Monthly 8,030 8,431 8,853 9,295 9,761
Annually 96,356 101,166 106,236 111,540 117,130
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Communications Manager Bi-weekly 4,929 5,175 5,434 5,706 5,991 Unrep 1/2/2023 Monthly 10,680 11,213 11,774 12,363 12,981
Annually 128,154 134,550 141,284 148,356 155,766
Communications Officer I Bi-weekly 3,303 3,460 3,633 3,815 4,006 Police 1/2/2023 Monthly 7,157 7,497 7,872 8,266 8,680
Annually 85,878 89,960 94,458 99,190 104,156
Communications Officer II Bi-weekly 3,633 3,815 4,006 4,206 4,416 Police 1/2/2023 Monthly 7,872 8,266 8,680 9,113 9,568
Annually 94,458 99,190 104,156 109,356 114,816
Community Service Officer Bi-weekly 2,690 2,824 2,965 3,113 3,269 Police 1/2/2023 Monthly 5,828 6,119 6,424 6,745 7,083
Annually 69,940 73,424 77,090 80,938 84,994
Deputy Director of Public Works Bi-weekly 5,833 6,125 6,431 6,753 7,091 Unrep 1/2/2023 Monthly 12,638 13,271 13,934 14,632 15,364
Annually 151,658 159,250 167,206 175,578 184,366
Director of Building and Planning Bi-weekly 7,488 7,862 8,255 8,668 9,101 Unrep 1/2/2023 Monthly 16,224 17,034 17,886 18,781 19,719
Annually 194,688 204,412 214,630 225,368 236,626
Director of Finance Bi-weekly 7,488 7,862 8,255 8,668 9,101 Unrep 1/2/2023 Monthly 16,224 17,034 17,886 18,781 19,719
Annually 194,688 204,412 214,630 225,368 236,626
Director of Public Works - City Engineer Bi-weekly 8,002 8,402 8,822 9,263 9,726 Unrep 1/2/2023 Monthly 17,338 18,204 19,114 20,070 21,073
Annually 208,052 218,452 229,372 240,838 252,876
GIS Coordinator Bi-weekly 4,062 4,265 4,478 4,702 4,937 Unrep 1/2/2023 Monthly 8,800 9,240 9,702 10,187 10,697
Annually 105,604 110,884 116,428 122,250 128,362
GIS Technician Bi-weekly 3,692 3,877 4,071 4,274 4,488 Unrep 1/2/2023 Monthly 8,000 8,400 8,820 9,261 9,724
Annually 96,003 100,804 105,844 111,136 116,693
HR Manager Bi-weekly 5,130 5,386 5,655 5,938 6,235 Unrep 1/2/2023 Monthly 11,115 11,670 12,253 12,866 13,509
Annually 133,380 140,036 147,030 154,388 162,110
Lead Communications Officer Bi-weekly 3,815 4,006 4,206 4,416 4,637 Police 1/2/2023 Monthly 8,266 8,680 9,113 9,568 10,046
Annually 99,190 104,156 109,356 114,816 120,557
Lead Facilities Worker Bi-weekly 3,427 3,598 3,778 3,967 4,165 PW&C 1/2/2023 Monthly 7,425 7,796 8,186 8,595 9,024
Annually 89,102 93,548 98,228 103,142 108,290
Lead Maintenance Worker Bi-weekly 3,264 3,427 3,598 3,778 3,967 PW&C 1/2/2023 Monthly 7,072 7,425 7,796 8,186 8,595
Annually 84,864 89,102 93,548 98,228 103,142
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Maintenance Worker I Bi-weekly 2,515 2,635 2,767 2,905 3,050 PW&C 1/2/2023 Monthly 5,449 5,709 5,995 6,294 6,608
Annually 65,390 68,510 71,942 75,530 79,300
Maintenance Worker II Bi-weekly 2,767 2,905 3,050 3,202 3,362 PW&C 1/2/2023 Monthly 5,995 6,294 6,608 6,938 7,284
Annually 71,942 75,530 79,300 83,252 87,412
Management Analyst I Bi-weekly 3,764 3,952 4,150 4,358 4,575 Unrep 1/2/2023 Monthly 8,155 8,563 8,992 9,442 9,914
Annually 97,864 102,752 107,900 113,308 118,962
Management Analyst II Bi-weekly 4,141 4,348 4,565 4,793 5,033 Unrep 1/2/2023 Monthly 8,972 9,421 9,891 10,385 10,905
Annually 107,666 113,048 118,690 124,618 130,858
Management Assistant Bi-weekly 3,421 3,592 3,772 3,961 4,159 Unrep 1/2/2023 Monthly 7,412 7,783 8,173 8,582 9,011
Annually 88,946 93,392 98,072 102,986 108,134
Office Assistant Bi-weekly 2,535 2,662 2,795 2,935 3,082 PW&C 1/2/2023 Monthly 5,493 5,768 6,056 6,359 6,678
Annually 65,910 69,212 72,670 76,310 80,132
Planning Manager Bi-weekly 5,710 5,996 6,296 6,611 6,942 Unrep 1/2/2023 Monthly 12,372 12,991 13,641 14,324 15,041
Annually 148,460 155,896 163,696 171,886 180,492
Police Captain Bi-weekly 7,087 7,441 7,813 8,204 8,614 Unrep 1/2/2023 Monthly 15,355 16,122 16,928 17,775 18,664
Annually 184,262 193,466 203,138 213,304 223,964
Police Corporal Bi-weekly 4,570 4,798 5,038 5,290 5,555 Police 1/2/2023 Monthly 9,902 10,396 10,916 11,462 12,036
Annually 118,820 124,748 130,988 137,540 144,430
Police Lieutenant Bi-weekly 6,031 6,333 6,650 6,983 7,332 Unrep 1/2/2023 Monthly 13,067 13,722 14,408 15,130 15,886
Annually 156,806 164,658 172,900 181,558 190,632
Police Officer Bi-weekly 4,326 4,542 4,769 5,007 5,257 Police 1/2/2023 Monthly 9,373 9,841 10,333 10,849 11,390
Annually 112,476 118,092 123,994 130,182 136,682
Police Officer Trainee Bi-weekly 3,471 Police
1/2/2023 Monthly 7,521
Annually 90,246
Police Sergeant Bi-weekly 5,272 5,536 5,813 6,104 6,409 Police 1/2/2023 Monthly 11,423 11,995 12,595 13,225 13,886
Annually 137,072 143,936 151,138 158,704 166,634
Property Officer Bi-weekly 2,959 3,107 3,262 3,425 3,596 Police 1/2/2023 Monthly 6,411 6,732 7,068 7,421 7,791
Annually 76,934 80,782 84,812 89,050 93,493
Public Works Asst. Superintendent Bi-weekly 4,673 4,907 5,152 5,410 5,681 PW Supe 1/2/2023 Monthly 10,125 10,632 11,163 11,722 12,309
Annually 121,498 127,582 133,952 140,660 147,706
Public Works Inspector I Bi-weekly 3,264 3,427 3,598 3,778 3,967 PW&C 1/2/2023 Monthly 7,072 7,425 7,796 8,186 8,595
Annually 84,864 89,102 93,548 98,228 103,142
-404-
Public Works Inspector II Bi-weekly 3,590 3,770 3,958 4,156 4,364 PW&C 1/2/2023 Monthly 7,778 8,168 8,576 9,005 9,455
Annually 93,340 98,020 102,908 108,056 113,456
Public Works Superintendent Bi-weekly 5,921 6,217 6,528 6,854 7,197 Unrep 1/2/2023 Monthly 12,829 13,470 14,144 14,850 15,594
Annually 153,946 161,642 169,728 178,204 187,122
Public Works Supervisor Bi-weekly 4,237 4,449 4,671 4,905 5,150 PW Supe 1/2/2023 Monthly 9,180 9,640 10,121 10,628 11,158
Annually 110,162 115,674 121,446 127,530 133,900
Records Clerk II Bi-weekly 3,225 3,386 3,555 3,733 3,920 Police 1/2/2023 Monthly 6,988 7,336 7,703 8,088 8,493
Annually 83,850 88,036 92,430 97,058 101,920
Records Supervisor Bi-weekly 3,548 3,725 3,911 4,107 4,312 Police 1/2/2023 Monthly 7,687 8,071 8,474 8,899 9,343
Annually 92,248 96,850 101,686 106,782 112,112
Senior Accountant Bi-weekly 4,293 4,508 4,733 4,970 5,218 Unrep 1/2/2023 Monthly 9,302 9,767 10,255 10,768 11,306
Annually 111,618 117,208 123,058 129,220 135,668
Senior Accounting Technician Bi-weekly 3,410 3,581 3,760 3,948 4,146 PW&C 1/2/2023 Monthly 7,388 7,759 8,147 8,554 8,983
Annually 88,660 93,106 97,760 102,648 107,793
Senior Building and Planning Technician Bi-weekly 3,501 3,676 3,860 4,053 4,256 PW&C 1/2/2023 Monthly 7,586 7,965 8,363 8,782 9,222
Annually 91,026 95,576 100,360 105,378 110,660
Senior Building Inspector/Plan Checker Bi-weekly 4,380 4,599 4,829 5,070 5,323 PW&C 1/2/2023 Monthly 9,490 9,965 10,463 10,985 11,533
Annually 113,880 119,574 125,554 131,820 138,398
Senior Civil Engineer Bi-weekly 5,364 5,632 5,914 6,210 6,520 Unrep 1/2/2023 Monthly 11,622 12,203 12,814 13,455 14,127
Annually 139,464 146,432 153,764 161,460 169,520
Senior Management Analyst Bi-weekly 4,762 5,000 5,250 5,512 5,788 Unrep 1/2/2023 Monthly 10,318 10,833 11,375 11,943 12,541
Annually 123,812 130,000 136,500 143,312 150,487
Senior Planner Bi-weekly 4,853 5,096 5,351 5,619 5,900 Unrep 1/2/2023 Monthly 10,515 11,041 11,594 12,175 12,782
Annually 126,178 132,496 139,126 146,094 153,387
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Hourly positions
1/3/2022
Laborer - Temporary Hourly 30.00 40.00
Intern I - Temporary Hourly 20.00 30.00
Intern II - Temporary Hourly 25.00 35.00
Intern III - Temporary Hourly 30.00 40.00
Clerical - Temporary Hourly 15.50 35.00
Technician - Temporary Hourly 30.00 40.00
Communications Officer - Temporary Hourly 55
-406-
TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
14 OLD BUSINESS
CITY COUNCIL MEETING
MAY 08, 2023
AGENDA STAFF REPORT
ITEM SUBJECT: DISCUSS AND CONFIRM DIRECTION ON TOBIN CLARK WALKING TRAIL SUMMARY: This agenda item is for the City Council to confirm direction to staff on the Tobin Clark Trail.
Background
The Town desires to undertake a trail restoration and enhancement project that would provide a recreational trail to the public in areas within the Town’s property. The proposed Tobin Clark Walking Trail Restoration Project (“Project”) would consist of approximately 5,500 linear feet of trail, extending from near Brooke Court to near the Children’s center at the College of San Mateo (“CSM”). Other pathway access points can be considered in a pending design. There is an existing, unmaintained trail that varies in width and material. Minor grading and small retaining walls would be necessary to provide a level trail with natural material and a consistent trail width of about ten feet for maintenance vehicle access. The restored trail would be limited to pedestrian foot traffic only. The Project would also include native drought resistant landscaping for privacy screening to nearby homes, benches, and signage. Minor repairs to existing storm drain systems that cross under the trail and erosion will be necessary to prevent erosion on the trail.
A state grant totaling $178k was received for the project with a 25% match by the Town. The total project cost estimate will be available after the design stage of the project. In order to complete the design phase of the project, a Request for Proposal (RFP) for design services was conducted and the agreement was awarded to BKF engineers at the January 9, 2023 City Council meeting for a total cost of $116,678.00. It is anticipated that the grant would be used to cover the cost of the construction project, and the initial design cost would be borne by the Town. The grant requires that construction be completed no later than June 30, 2024.
The discussion with this agenda item will include a review of the trail project footprint in connection with the conceptual footprint of the potential Tobin Clark multi family housing project. Upon receiving the information, staff seeks direction from City Council on reconfirming their direction to commence the design phase of the project.
FISCAL IMPACT: There is no fiscal impact associated with this agenda item.
ENVIRONMENTAL ISSUES: The action is categorically exempt from the California Environmental Quality Act according to Section 15301 of the California Code of Regulations.
ATTACHMENTS: None
-407-
Agenda Staff Report - Hillsborough City Council
May 8, 2023
PREPARED BY: Paul Willis, Director of Public Works
RECOMMENDATION: Discuss and confirm direction on the Tobin Clark Trail project. -408-
TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
15 NEW BUSINESS
CITY COUNCIL MEETING
MAY 08, 2023
AGENDA STAFF REPORT
ITEM SUBJECT: RESOLUTION AUTHORIZING SEWER SERVICE CHARGES EFFECTIVE JULY 1, 2023 PURSUANT TO CEQA GUIDELINE 15378
SUMMARY: This resolution authorizes sewer service charges for residential and non-residential customers, effective July 1, 2023. An Equivalent Dwelling Unit (EDU) represents the wastewater flow and loadings of a typical single family residence. Residential customers have one EDU.
Equivalent EDUs are assigned to non-residential customers based on average winter water use from the prior three years and State Water Resources Control Board (SWRCB) wastewater strength guidelines.
The proposed change has been published as a public notice in the San Mateo Daily Journal on April 26, 2023, as required by Government Code Section 66018 following publication requirements set forth in Government Code Section 6062a.
This resolution will authorize implementing a $153.00 (4%) increase in the annual residential sewer service charge from $3,832.00 to $3,985.00 for fiscal year 2023-2024 effective July 1, 2023.
Non-residential accounts will be charged based on the equivalent dwelling unit formula and the average winter water use during the fiscal years 2020-21, 2021-22 and 2022-23. Starting in FY 2017-18, staff used a method conducting additional analysis on commercial winter water use to reflect indoor water usage through Advanced Metering Infrastructure (AMI) tools. Variances from the 4% rate increase are the result of changes in the average water usage.
FISCAL IMPACT: Additional revenues associated with this action are reflected in the Proposed Budget for FY 2023-24.
ENVIRONMENTAL ISSUES: The proposed action is exempt from environmental review pursuant to the California Environmental Quality Act (CEQA) Guidelines sections 15378(b)(2) and 15378(b)(5) as ongoing administrative or organizational activities that will not result in direct or indirect physical changes in the environment.
ATTACHMENTS: Resolution
PREPARED BY: Richard Santiago, Assistant Finance Director RECOMMENDATION: Adopt the resolution authorizing sewer service charges for FY 2023-24 effective July 1, 2023.
-409-
RESOLUTION NO. 23-
RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH AUTHORIZING SEWER SERVICE CHARGES EFFECTIVE JULY 1, 2023 WHEREAS, on June 14, 2021, the Town of Hillsborough (“Town”) City Council adopted Resolution No. 21-55 adopting maximum rates for sewer service charges for a five-year period; and
WHEREAS, the Town may charge rates at or below the adopted maximum rates in the intervening years; and
WHEREAS, the non-residential sewer rates will be based on the number of Equivalent Dwelling Units (EDU) using the three-year average winter water use; and WHEREAS, the proposed fees and charges for the year fiscal 2023-24, if adopted, would be effective July 1, 2023, until amended; and
WHEREAS, the actions taken pursuant to this Resolution do not constitute an “increase” to any fee or charge subject to article XIII D, section 6 of the California Constitution, because they are being adjusted in accordance with a pre-approved formula; and
WHEREAS, fees and charges adjusted pursuant hereto do not exceed the cost of the service for which they are imposed; and
WHEREAS, the Financial Advisory Committee, the City Council and the public have been presented in an open and noticed public meeting, all of the details of the proposed changes to the sewer service charges and the water and sewer connection fees.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the Town of Hillsborough hereby authorizes sewer service for the fiscal year 2023-24, effective July 1, 2023, as follows:
Sewer Annual Service Fees
Adopted
fiscal year
2022-2023
Proposed
fiscal year
2023-2024
Residential (Equivalent Dwelling Unit) $3,832 $3,985
Hillsborough Racquet Club $1,150 $2,203
Caltrans Rest Stop $19,928 $21,122
Crystal Springs Uplands School $18,012 $17,535
Burlingame Country Club $80,480 $78,909
Crystal Springs Golf Club $24,527 $21,521
Hillsborough City School District $37,941 $40,251
Nueva School $3,832 $3,985
-410-
This resolution shall be printed and posted upon the authorized official bulletin boards of the Town of Hillsborough.
Mayor of the Town of Hillsborough
Attest: City Clerk
This resolution was adopted by the City Council of the Town of Hillsborough at its regular meeting held on the 8th day of May 2023, by the following vote of the members thereof:
AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
-411-
TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
16 NEW BUSINESS
CITY COUNCIL MEETING
MAY 08, 2023
AGENDA STAFF REPORT
ITEM SUBJECT: APPOINTMENT OF DOUG DAVIS AS INTERIM CITY MANAGER PURSUANT TO CEQA GUIDELINE 15378
SUMMARY: City Manager Ann Ritzma's last day as a Town employee was April 26, 2023.
At a special City Council meeting on April 17, 2023, the City Council appointed Finance Director Jan Cooke as Acting City Manager.
At a special City Council meeting on April 26, 2023, the City Council discussed potential interim candidate names in closed session and the City Council directed the Mayor to speak with the preferred interim candidate. The City Council is now being asked tonight to appoint Doug Davis as Interim City Manager effective May 9, 2023 while the City Council conducts a permanent City Manager recruitment.
FISCAL IMPACT: There is minimal financial impact associated with the City Council’s decision to appoint an Interim City Manager.
ENVIRONMENTAL ISSUES: The proposed action is exempt from environmental review pursuant to the California Environmental Quality Act (CEQA) Guidelines sections 15378(b)(2) and 15378(b)(5) as ongoing administrative or organizational activities that will not result in direct or indirect physical changes in the environment.
ATTACHMENTS: None
PREPARED BY: Christopher J. Diaz, City Attorney
RECOMMENDATION: Appoint Doug Davis as Interim City Manager effective May 9, 2023. -411- -41
TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
17 NEW BUSINESS
CITY COUNCIL MEETING
MAY 08, 2023
AGENDA STAFF REPORT
ITEM SUBJECT: DISCUSS AND PROVIDE DIRECTION ON CITY MANAGER RECRUITMENT PURSUANT TO CEQA GUIDELINE 15378
SUMMARY: City Manager Ann Ritzma’s last day as a Town employee was April 26, 2023, leaving a vacancy for the City Manager position.
On April 26, 2023, the City Council discussed and provided direction on conducting a recruitment to select the next City Manager.
To start the recruitment process for a replacement, staff will be seeking input from the City Council on the following:
• Desired qualifications and attributes for the selection of the new City Manager after the recruitment process;
• Structure of the recruitment; and
• Timeline on the recruitment based on the processes desired.
FISCAL IMPACT: There is some financial impact to the Town on conducting internal administration, which will be overseen by the outsourced Human Resources team. The Town will make use of its existing Human Resources consulting team, It’s Personnel, which charges an hourly rate for their services.
ENVIRONMENTAL ISSUES: The City Council’s action in discussing and providing direction on a City Manager recruitment is exempt from environmental review pursuant to the California Environmental Quality Act (CEQA) pursuant to CEQA Guideline 15378 as this activity is more akin to an organizational or administrative activity with no impact on the environment.
ATTACHMENTS: None
PREPARED BY:
Christopher J. Diaz, City Attorney; Rebecca Burnside, Human Resources Consultant RECOMMENDATION: Discuss and provide direction on the City Manager recruitment. -413-
TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
18 INFORMATIONAL
CITY COUNCIL MEETING
MAY 08, 2023
AGENDA STAFF REPORT
ITEM SUBJECT: ACTING CITY MANAGER'S UPDATE
SUMMARY: The Acting City Manager will provide an informational update related to Town projects, events and activities of interest to the community.
FISCAL IMPACT: There is no fiscal impact associated with this agenda item.
ENVIRONMENTAL ISSUES: This informational item is exempt from environmental review pursuant to the California Environmental Quality Act (CEQA) guidelines sections 15378(b)(2) and 15378(b)(5) as ongoing administrative or organizational activities that will not result in direct or indirect physical changes in the environment.
ATTACHMENTS: None
PREPARED BY: Jan Cooke, Acting City Manager
RECOMMENDATION: For information only; no action required. -415-