San Mateo County will recoup more than $21 million for its general fund and special districts by participating in a statewide plan for jurisdictions facing money grabs by the state to balance its budget.

As the Nov. 6 deadline to commit approaches, the Board of Supervisors is scheduled Tuesday morning to approve participation in the Proposition 1A Securitization Program. A number of other San Mateo County cities have already committed. The county’s participation is on behalf of itself, the fire protection fund and a number of special districts for which it acts as the governing board.

The estimated funds for the county general fund is $20.7 million, the County Protection Fund is $399,797 and the special districts is approximately $558,249 — a total of $21,656,529.

If the county does not participate in the program, it will not recoup the money taken from the state — along with 2 percent interest — until 2013.

Although Proposition 1A safeguards local property and sales tax, the budget package signed by the governor suspends it because of fiscal necessity and allows the state to borrow 8 percent of that revenue. Rather than wait and scrape by with less revenue, affected cities, counties and districts can participate in the securitization program offered by joint powers authority California Communities. The JPA  issues bonds to participants. The state then repays the bondholders, giving the local cities and counties immediate cash.

Agencies will receive half the proceeds Jan. 15 and the other half May 3, according to the League of California Cities.

County Budget Director Jim Saco previously said the main question for the county about participation is if officials felt they  can do better than 2 percent interest with the money in hand.

The county is not at any risk by participating because all financing costs are borne by the state, the county has no obligation on the bonds and is held harmless if the state does not repay the loans.

Michelle Durand can be reached by e-mail: michelle@smdailyjournal.com or by phone: (650) 344-5200 ext. 102.  

Info box: The San Mateo County Board of Supervisors meets 9 a.m. Tuesday, Nov. 3 in Board Chambers, 400 County Government Center.