Committee Advances $45M Lease-Revenue Bond Ordinance for Park Projects, Pauses Vote Pending Legal Clarification

The Government Audit and Oversight Committee advanced an ordinance authorizing the issuance and sale of lease-revenue bonds, not to exceed $45 million, to finance a set of park and recreation projects while pausing final action until legal questions about collateral were answered.

Unidentified finance staff outlined the proposal, saying gross proceeds are expected to be about $43 million and estimating a true interest cost around 4.8%. The staff noted that projects financed include a Chinese recreation center, Larsen-Sava Pool, Hamilton Recreation Center, a four-site synthetic-turf fields initiative and Franklin Square Playground. Mary Hobson (Rec & Park staff, first referenced SEG 037) said those projects will benefit from the financing but would not themselves serve as the security for the bonds because they will be under construction at issuance.

Supervisor Daley questioned whether Rec & Park land could be used as collateral when the City Charter forbids sale of those lands; the deputy city attorney (Kenner) replied that under the bond documents a trustee would step in and operate park facilities in the event of default but that the assets would remain city property and must be operated as park facilities. The trustee was identified as U.S. Bank National.

Given that legal explanation, the committee asked the City Attorney’s Office to confirm details and postponed final consideration until staff could return with a written opinion. On the motion to send the item forward as a committee report, the roll call showed Alleola Pier aye, Daley no, and Ellsberg aye, moving the ordinance forward with recommendation.

The committee also asked staff to complete title and valuation reports for the list of ten properties proposed as collateral and directed the budget analyst and City Attorney to follow up with legal and financial clarifications before final Board action.