"The City With a Heart"
Rico E. Medina, Mayor
Marty Medina, Vice Mayor
Sandy Alvarez, Councilmember, District 1
Tom Hamilton, Councilmember, District 2
Michael Salazar, Councilmember, District 3
AGENDA
SAN BRUNO CITY COUNCIL SPECIAL MEETING
January 14, 2025
6:00 PM
IN PERSON* MEETING LOCATION
San Bruno Recreation & Aquatic Center, Community Room
251 City Park Way
San Bruno, CA 94066
*Please turn off all electronic devices before the start of the meeting to prevent disruptions*
**Zoom Link
https://sanbrunocagov.zoom.us/j/82533702871?
pwd=140koipaEP4bbudztWkiX0HDewrXjR.1
Phone Line: 16465588656
Webinar ID: 825 3370 2871
Webinar Password: 386012
*Broadcast of the meeting is offered via Zoom as a
courtesy to the public.
**No public comment accepted via Zoom.
PUBLIC COMMENT: In person attendees who want to provide public comment, will be asked to fill out a speaker card and turn it into the City Clerk. Public comment may also be emailed to [email protected] . Comments received via email will not be read
aloud during the meeting.
ACCESSIBILITY: In compliance with the Americans with Disabilities Act, individuals requiring special accommodations or modifications to participate in this meeting should contact the City Clerk’s Office 48 hours prior to the meeting at (650) 6167061 or [email protected] .
*Any disclosable public writings related to an open session item on a regular meeting agenda and distributed by the City to at least a majority of the City Council less than 72 hours prior to that meeting are available for public inspection at the City Clerk's Office at City Hall located at 567 El Camino Real, San Bruno, California during normal business hours. In addition, the City may also post such documents on the City’s Website at sanbruno.ca.gov/AgendaCenter .
1. CALL TO ORDER
2. ROLL CALL
3. STUDY SESSION
Public comment will be requested after each topic in this section a. Receive Presentation on Voter Approved 2024 General Obligation Bonds (Measure Q)
4. ADJOURNMENT – The next Regular City Council Meeting will be held on January 14, 2025 at 7:00 pm.
POSTING: I declare a copy of this agenda was posted at City Hall, 567 El Camino Real, San Bruno, among other locations in the city limits of San Bruno, on January 9, 2025, by 6:00 pm. 1 of 8
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City Council Agenda Item
Staff Report
CITY OF SAN BRUNO
DATE: January 14, 2025
TO: Honorable Mayor and Members of the City Council
FROM: Alex D. McIntyre, City Manager
PREPARED BY: Nick Pegueros, Administrative Services Director & CFO SUBJECT: Receive Presentation on Voter Approved 2024 General Obligation Bonds (Measure Q)
BACKGROUND:
As part of the City Council’s 2023 priorities, a Council Ad Hoc Committee (Salazar/Hamilton) and staff researched and presented options for the City Council to consider a revenue measure in the November 2024 general election. The Committee recommended, and the Council approved, the placement of a General Obligation Bond measure known as “Measure Q.” This measure authorizes the City to issue debt for specific project types up to a specified tax rate.
San Bruno voters considered Measure Q, and with 73.09% of the 17,380 votes cast in favor, the measure passed, exceeding the 66.67% approval threshold required by the California Constitution. Unlike Measure G sales tax, which can be used for operations such as public safety, Measure Q Bonds are restricted to capital expenditures in three areas outlined in the ballot question as follows:
Shall City of San Bruno measure be adopted to repair deteriorating storm-drains, preventing failure, flooding, water pollution/ sinkholes; repair potholes/ city streets; upgrade fire stations, improving emergency response, accommodate modern firefighting/ lifesaving emergency medical equipment, function during earthquakes/ natural disasters; authorizing $102,000,000 in bonds, at a tax rate of 3¢ per $100 of assessed value, while bonds are outstanding, initially generating $3,300,000 annually, without funds for administrators/ cannot be taken by the State of California, with citizen oversight/ independent audits? Voter approval of Measure Q on November 5, 2025, provides the City Council with the authority to issue bonds at any point in the future. Further, if the City Council adopts a reimbursement resolution, the City may also begin spending General Funds to kickstart Measure Q projects for later reimbursement from bond proceeds.
DISCUSSION:
Jones Hall, the City’s legal bond counsel, has prepared a brief General Obligation Bonds primer, Attachment 1, for background now that voters have approved Measure Q. During the study session, staff will provide a high-level overview of the process to identify Measure Q projects through the capital improvement program budget, along with an estimation of the 3 of 8
Item 3a.
Honorable Mayor and Members of the City Council
January 14, 2025
resources necessary to deliver projects. Additionally, staff will discuss other policy directions required from the Council over the next several months. At this time, staff are not requesting any direction from the Council.
FISCAL IMPACT:
There is no fiscal impact.
ENVIRONMENTAL IMPACT:
The action is not a project subject to CEQA. City Council’s action is not considered a “Project” per CEQA Guidelines and therefore no further environmental analysis is required.
RECOMMENDATION:
Receive Presentation on Voter Approved 2024 General Obligation Bonds (Measure Q) ALTERNATIVES:
No action required at this time
ATTACHMENTS:
1. Primer on General Obligation Bonds / Measure Q
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475 Sansome Street
Suite 1700
San Francisco, CA 94111
t. 415.391.5780
f. 415.276.2088
To: City of San Bruno
From: Jones Hall (Bond Counsel)
Date: December 17, 2024
Re: Primer on General Obligation Bonds / Measure Q
_________________________________________________
O
verview
W
hat Are General Obligation (GO) Bonds?
GO B onds are a form of municipal debt issued by cities, school districts , and other local agencies in California to finance public capital projects , such as streets/roads , schools, and public safety facilities. They are backed by a dedicated ad valorem property tax, to be levied and collected through the normal County property tax bills in the amount needed each year to pay debt service, which provides an excellent credit to investors and the lowest possible borrowing cost for capital facility projects.
W
hat Is Measure Q?
Measure Q was the City of San Bruno’s GO Bond measure, which was approved by the voters in the City on November 5, 2024, authorizing the issuance of $102 million in GO Bonds for the capital projects described therein. The ballot language is in Appendix A.
W
hat Are the Next Steps for Measure Q?
Now that the voters have approved Measure Q, the City can fine- tune and prioritize the list of eligible projects and then issue GO Bonds in an amount up to the authorized maximum. It is anticipated that the City will issue 3 different series or tranches of bonds, to manage the tax burden on citizens and to efficiently spend the bond proceeds. In connection with the issuance of the bonds, certain accountability measures will be implemented, including formation of citizens’ oversight committee to ensure proper expenditure of the GO Bond proceeds.
K
ey Features of GO Bonds
1. T
ax-Backed Security
o GO bonds are repaid through a dedicated ad valorem property tax levy. o They do not rely on revenue from specific projects or General Fund sources.
2. Voter Approval
o GO bonds require approval from two -thirds (66.67%) of eligible voters under the Ca
lifornia Constitution for most purposes.
o Exceptions include certain school bond measures, which only require 55%.
3. Use of Funds
o Proceeds can only be used for capital projects (e.g., constructing or improvi ng i
nfrastructure) and not operational expenses.
o Projects financed must provide public benefits and meet legal criteria for bond funding.
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ATTACHMENT 1
City of San Bruno
Primer on General Obligation Bonds
December 17, 2024
____________________________________
2 4. Repayment Timeline
o Each series or tranche of GO Bonds is t ypically structured with repayment over 30 years to spread costs across taxpayers who benefit from the improvements. o Multiple series / tranches issued pursuant to a single authorization are typical.
5. Impact on Taxpayers
o Property taxes increase proportionally to service the bond debt. o Tax rates are calculated each year based on assessed values (AV). o Those with higher AVs pay more than lower those with lower AVs.
Process for Authorizing and Issuing GO Bonds
1. Needs Assessment
o Identify projects requiring funding and confirm they qualify under legal bond uses.
2. Public Engagement
o Communicate project benefits and financial impacts to residents to garner support.
o Conduct polling and surveys in the community
3. Bond Authorization
o Place the measure on a ballot for voter approval.
4. Issuance and Sale
o After voter approval, bonds can be issued and sold to investors. o The local agency’s bond counsel, financial advisor and underwriter assist in structuring and marketing the bonds.
5. Post-Issuance Compliance
o The local agency is responsible for semi-annual debt service payments on the bonds, and other post -issuance compliance items such as arbitrage and rebate tracking under IRS rules and continuing disclosure compliance to investors. o A citizens’ oversight committee is typically appointed.
Main Advantages
1. Low-Cost Borrowing:
o Local agencies often obtain lower interest rates than other types of debt, due to the unlimited ad valorem property tax pledge.
o No debt service reserve fund is required, allowing additional funds for projects
2. Equity Across Generations:
o Spreads project costs over time, so future residents contribute. o Especially true when multiple series / tranches are issued.
3. Community Benefits
o Funds critical infrastructure without depleting general funds. o Voters must approve the GO Bonds.
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City of San Bruno
Primer on General Obligation Bonds
December 17, 2024
____________________________________
3 Other Considerations
1. Taxpayer Burden / Equity
o Higher property taxes may face opposition, particularly in communities with rising costs of living.
o Properties with higher AVs pay more each year than properties with low AVs
2. Debt Limits
o California law limits the total GO bond debt a city can carry to 15% of the assessed property value (Article XIII of the State Constitution).
3. Market Conditions
o Interest rates at the time of issuance affect borrowing costs. o Total cost of each GO Bond issuance is not determined until pricing/closing.
4. Accountability
o The city must maintain transparency in fund use and bond repayment.
The foregoing provides a general overview of General Obligation (G.O.) Bonds that may be issued by cities in California, with particular points related to San Bruno’s Measure Q.
More detailed information can be provided by Dave Fama and James A. Wawrzyniak, Jr., Bond Counsel at Jones Hall.
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Exhibit A
EXHIBIT A
CITY OF SAN BRUNO MEASURE Q
75-Word Ballot Measure
Shall City of San Bruno measure be adopted to repair
deteriorating storm-drains, preventing failure, flooding, water pollution/ sinkholes; repair potholes/ city streets; upgrade fire stations, improving emergency response, accommodate
modern firefighting/ lifesaving emergency medical equipment, function during earthquakes/ natural disasters; authorizing $102,000,000 in bonds, at a tax rate of 3¢ per $100 of
assessed value, while bonds are outstanding, initially
generating $3,300,000 annually, without funds for
administrators/ cannot be taken by the State of California, with citizen oversight/ independent audits?
YES
_____
NO
______
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