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Supervisors advance authority for San Francisco General and park bond issuance totaling up to $370 million
Summary
The Budget & Finance Committee voted to forward to the full Board a package authorizing sale of up to $305 million in San Francisco General Hospital bonds and up to $65 million in Clean and Safe Neighborhood Park bonds, with the Comptroller pitching combined issuance to lower costs and an expected offering in late February.
The Budget & Finance Committee on Feb. 3 voted to forward to the full Board legislation authorizing the issuance of general obligation bonds to finance improvements at San Francisco General Hospital and neighborhood parks.
Nadia Saye, director of public finance in the Comptroller's Office, told the committee the administration seeks authority for a not-to-exceed $305 million series for San Francisco General Hospital and up to $65 million for Clean and Safe Neighborhood Park bonds. Combining the two sales would produce an aggregate not-to-exceed authorization of $370 million to preserve market flexibility and reduce issuance costs, she said.
Saye said the administration plans to post the official offering document on Feb. 20 and to take the bonds to market with an expected sale in March. Based on current conditions she estimated a conservative all-in interest rate in the mid-4 percent range if the sale were held now, noting prior hybrid financing using Build America Bonds produced a true interest cost near 4.17 percent.
Budget analyst Mr. Rose told the committee his office estimated the local tax impact on a single-family home assessed at $500,000 (after the $7,000 homeowner exemption) at about $98 per year under the proposed authorization, though he cautioned that the payment would decline as previous debt is retired and exact amounts hinge on final sale terms.
The committee did not take a final sale vote; it forwarded Items 1'03 to the full Board with the committee's recommendation. The full Board will consider adoption of the bond resolutions and the ordinance appropriating bond proceeds in subsequent proceedings.
Why it matters: The bonds would fund construction and seismic and safety improvements at the city's trauma hospital and capital projects in city parks. Combined issuance is intended to reduce borrowing costs, but exact rates and total taxpayer impacts will be determined by market conditions and final sale structure.
What's next: The administration expects to post offering documents Feb. 20 and to sell the bonds in March; the full Board must approve the resolutions and appropriation ordinances before sales proceed.
