Property value drop spurs need for 'Plan B'

"We have enough money to finish the projects we’ve already begun,” said board President Stephen Rogers.

The conversation is really about the different borrowing methods the board could use to finish the remaining projects, he said.

Those options will include various scenarios for tax projections.

Assistant Superintendent of Business Services Elizabeth McManus explained the assessed property values in the county are traditionally stable with moderate increases. Now those numbers are expected to dip for only this year.

"Recent information published by the San Mateo County Assessor’s Office exhibited a 2.89 percent decline in the district’s assessed valuation for the 2010-11 year. This decline is the first for the district in over three decades,” according to a district staff report.

A small amount of growth is expected in the following years. The board will simply revisit its plans with the new information, McManus said.

"All we can really do is look at the averages from five years, 10 years, 15 and 20 years and then decide how we want to proceed,” McManus said.

Other considerations do come into play. For example, the construction market has allowed the district to already add more to the projects being finished. A new special education classroom at Hillsdale High School, for example, will soon serve to teach students skills needed to live on their own. Also, the district has applied for $25 million in government construction loans, a plan in which the federal government would cover the tax on those funds. Should San Mateo Union be chosen in the lottery for those funds, it would greatly improve the situation, McManus said.

Measure M will cover numerous projects at the various schools like updating field facilities, remodeling gyms and classrooms, removing arsenic-tainted dirt from Burlingame High School and remodeling the San Mateo Performing Arts Center. In January, the board tweaked plans for Measure M funds to include a $31.5 million solar project to be placed at six campuses.

Various options in approaching the future will be presented Thursday, Jan. 6 by the district’s bond financial team, which includes three financial advisors, two underwriters and bond counsel.

In the meantime, the board will vote to authorize the issuance of general obligation bond anticipation notes not to exceed $65 million to be repaid by Measure M.

Measure M has created much work for district officials over the years.

Shortly after its approval, the board postponed using funds after controversy over the finances — particularly in regards to a contract with Skanska, a fire hired to oversee construction — came to light. In April 2007, the district cut ties with the company and restarted the planning process. After an eight-month hiatus, the board began hiring companies to begin construction.

In 2008, district officials realized flawed bond language limited the debt to 25-year bonds. The district successfully petitioned the San Mateo County Board of Supervisors to amend the bond language to allow for both 25-year and 40-year bonds. The change extended taxpayers payments up to an additional 15 years — from 2037 to 2052 — but allowed the district to finish the original renovation plans.

The board meets 7 p.m. Thursday, Jan. 6 at the San Mateo Adult Resource and Technology Center, 789 E. Poplar Ave. in San Mateo.

Heather Murtagh can be reached by e-mail: heather@smdailyjournal.com or by phone: (650) 344-5200 ext. 105.