CITY OF SAN MATEO
CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 11 Section Name: PUBLIC HEARING Account Number: 10-2021 File ID: 26-11030 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Finance Department
MEETING DATE: April 06, 2026
SUBJECT:
Tax Exempt Financing, The Carey School — Adoption
RECOMMENDATION:
Conduct a Tax Equity and Fiscal Responsibility Act public hearing and adopt a resolution approving the issuance of tax exempt revenue obligations or execution of a loan transaction by the California Enterprise Development Authority for the purpose of financing, refinancing and/or reimbursing the cost of capital improvements to The Carey School, located at 1 Carey School Lane and 2033 La Salle Drive in San Mateo, California.
BACKGROUND:
Under the California Government Code, public agencies may by agreement jointly exercise any power common to an individual public agency. These jointly formed agencies are generically referred to as Joint Powers Authorities (JPA). A number of these JPAs currently exist in California and offer to facilitate tax exempt financing programs to qualifying nonprofit and private-sector projects that provide public benefits to their communities. In order to secure tax exempt financing, there is a requirement that the agency where a financing project is located must be a member of the JPA and conduct a public hearing to approve of the project. This requirement is a provision under the Federal Tax Equity and Fiscal Responsibility Act of 1982 and is commonly referred to as a “TEFRA hearing”.
There is no financial obligation to the City by becoming a JPA member or conducting a public hearing for the project. One of these JPA, the California Association for Local Economic Development (CALED) and its financing arm, the California Enterprise Development Authority (CEDA) have been working with The Carey School to secure financing for improvements to their school facility.
The Carey School, in San Mateo, California has requested that the CEDA issue revenue bonds or execute a loan transaction in a principal amount not to exceed $18,000,000 for the purposes of financing, refinancing and/or reimbursing the cost of acquiring, developing, constructing, installing, equipping and furnishing educational facilities located at (i) 2033 La Salle Drive, San Mateo, California 94403 and (ii) 1 Carey School Lane, San Mateo, California 94403 (collectively, the “Facilities”) and paying certain costs of issuance in connection with such financing. The financing will generally include the refinancing of prior tax-exempt debt and the construction of a new preschool facility.
ANALYSIS
CEDA was created on June 1, 2006, pursuant to a joint exercise of powers agreement to promote economic, cultural, and community development, through the financing of economic development and charitable activities throughout California.
The City of San Mateo became an associate member of CEDA in 2013 to assist St. Matthew’s Episcopal Parish School with its request for tax exempt financing. As such, other for-profit and nonprofit corporations, such as The Carey School, with projects in the City of San Mateo may utilize CEDA’s services as well. As an associate member of CEDA, TEFRA approvals do not require any other actions other than the public hearing and the requisite approval.
CITY OF SAN MATEO
Joint powers authorities have served as issuers in conduit bond issues for many years. In each conduit bond issue: the local agency in which the project is located is required to be a member of the joint powers authority and approve the bond issue and the project for state and federal tax law purposes. The Joint Exercise of Powers Agreement provides that the CEDA is a public entity, separate and apart from each member and associate member executing an associate membership agreement. The debts, liabilities and obligations of the CEDA do not constitute debts, liabilities, or obligations of the members executing such agreement.
BUDGET IMPACT:
There is no fiscal impact to the City. Adoption of the resolution approving the Project and the financing complies with the requirements of Section 147(f) of the Internal Revenue Code. The City of San Mateo does not bear any responsibility for the tax exempt status of the interest with respect to the Loan, the debt service on the Loan nor any other matter related to the Loan.
ENVIRONMENTAL DETERMINATION:
This issuance of tax exempt revenue obligations is not a project subject to CEQA, because it is a government fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. (CEQA Guidelines Section 15378(b)(4).)
NOTICE PROVIDED
All meeting noticing requirements were met. A public hearing notice was published in the San Mateo Daily Journal on March 27, 2026.
ATTACHMENTS
Att 1 – Proposed Resolution
STAFF CONTACT
Abby Veeser, Finance Director
[email protected]
(650) 522-7102