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Subcommittee forwards $42M certificates-of-participation proposal for street and Laguna Honda improvements
Summary
The committee forwarded an ordinance authorizing up to $42 million in certificates of participation to finance street improvements and related projects, shifting a previously contemplated gas-tax-funded structure to a general-fund lease approach for more favorable borrowing terms; the budget analyst generally concurred but noted policy implications.
The committee considered an ordinance that would authorize certificates of participation (COPs) in an aggregate principal amount not to exceed $42 million to finance certain street improvements and related projects, with the Laguna Honda property discussed as potential collateral in a supplemental transaction.
Staff said the financing was structured as a general-fund lease to obtain a better borrowing rate after market changes affected gas-tax COPs; DPW staff said gas-tax funds average about $17 million a year for operations and street cleaning, but recent credit and state payment uncertainties made a gas-tax COP less attractive. The budget analyst concurred with the approach as a financing device while cautioning that shifting from gas-tax to general fund resources is a policy choice and may affect future general-fund obligations.
The committee voted to forward the ordinance to the full Board with recommendation for further consideration.
