REPORT TO THE CITY COUNCIL
FROM: SANTINO DANISI, Finance Director/City Controller
Finance Department
BY: PHILLIP HARDCASTLE, Principal Accountant - Debt Administration
Finance Department
SUBJECT
Title
Tax Equity and Financial Responsibility Act (TEFRA) public hearing.
TEFRA HEARING - To hear and consider information concerning the proposed issuance of tax-exempt bonds by California Municipal Finance Authority for the purpose of financing and refinancing The Terraces at San Joaquin Gardens.
1. ***RESOLUTION - Approving the issuance of the California Municipal Finance Authority revenue and refunding bonds, Series 2025 (HumanGood - California Obligated Group) in an aggregate principal amount not to exceed $205,000,000 for the purpose of financing and equipping of the Terraces at San Joaquin Gardens and certain other matters relating thereto. (Subject to Mayor’s Veto)
Body
RECOMMENDATION
Adopt the resolution approving the issuance of the Bonds by the CMFA for the benefit of HumanGood, HumanGood NorCal, HumanGood SoCal or HumanGood Fresno, each a California nonprofit public benefit corporation (the “Borrower”), to provide for the financing of the Project, such adoption is solely for the purposes of satisfying the requirements of TEFRA, the Code and the California Government Code Section 6500 (and following).
EXECUTIVE SUMMARY
A portion of the proceeds of the Bonds will be used to finance expenditures for various renovations to existing infrastructure and upgrades to housing units and amenities at the following continuing care community owned and operated by the Corporation and located in the City of Fresno (the “City”): The Terraces at San Joaquin Gardens located at 5555 North Fresno Street, within Council District 4, Fresno, California, 93710 (the “Project”).
Should the City authorize the issuance of Bonds, the City would have no obligation or liability associated with these facilities or with these obligations.
BACKGROUND
The Borrower, has requested that the Authority undertake a proposed plan of finance to issue and reissue from time to time one or more series of revenue bonds in an amount not to exceed $205,000,000, used to finance and refinance the costs of the acquisition and improvement of several properties throughout California, but as it relates to the City of Fresno, a principal amount not to exceed $55,000,000 will be used to finance expenditures for various renovations to existing infrastructure and upgrades to housing units and amenities at the following continuing care community owned and operated by the Corporation and located in the City of Fresno (the “City”)
An ”applicable elected representative” of the jurisdiction in which the Project is to be located is required to approve the proposed plan of finance for the project under section 147(f) of the Internal Revenue Code of 1986, as amended (the “Code”), and the City Council of Fresno (the “City Council) is the elected legislative body of the City and is an “applicable elected representative” for the purposes of Section 147(f) of the Code
The Authority has requested that the City Council approve the proposed plan of finance in order to satisfy the public approval requirement of Section 147(f) of the Code and the requirements of Section 4 of the Joint Exercise of Powers Agreement Relating to the Authority, dated as of January 1, 2004 (the “Agreement”), among certain local agencies, including the City
The Authority was created on January 1, 2004, pursuant to a joint exercise of powers agreement to promote economic, cultural and community development, through the financing of economic development and charitable activities throughout California. To date, over 350 municipalities, including the City of Fresno, have become members of the Authority.
The Authority was formed to assist local governments, non-profit organizations and businesses with the issuance of taxable and tax-exempt bonds aimed at improving the standard of living in California. The Authority’s representatives and its Board of Directors have considerable experience in bond financings.
In order for all or a portion of the Bonds to qualify as tax-exempt bonds, the City of Fresno must conduct a public hearing (the “TEFRA Hearing”) providing for the members of the community an opportunity to speak in favor of or against the use of tax-exempt bonds for the financing of the Project. Prior to such TEFRA Hearing, reasonable notice must be provided to the members of the community. Following the close of the TEFRA Hearing, an “applicable elected representative” of the governmental unit hosting the Project must provide its approval of the issuance of the Bonds for the financing of the Project.
ENVIRONMENTAL FINDINGS
This item is not a project for purposes of the California Environmental Quality Act (CEQA).
LOCAL PREFERENCE
Local preference was not considered because this resolution does not include a bid or award of a construction or service contract.
FISCAL IMPACT
The City has no obligation or liability associated with the requested financing. The Obligations will not constitute indebtedness or obligation of, and will not involve a pledge of the good faith and credit of the City. The Obligations will be limited obligations of the Authority payable only from loan repayments to be made to the Authority from certain funds and accounts established by or pursuant to the bond indenture(s) under which the Obligations will be issued. The Authority has no taxing power and the issuance of the Obligations will not obligate the State of California or any political subdivision of the State to levy or pledge any form of taxation for the Obligations or to make any appropriation for the payment of the Obligations.
Attachment: Resolution