City of Culver City, California
Agenda Item Report
Meeting Date: 10/25/10 Item Number: PH-1
CITY COUNCIL AGENDA ITEM: PUBLIC HEARING - Adoption of a Resolution
Approving the Issuance of Bonds by the California Municipal Finance Authority for
the Benefit of MWLA, Inc. (dba Turning Point School) to Refund Existing Debt.
Contact Person/Dept.: Nick Kimball,
Senior Management Analyst
Phone Number: 310-253-6013
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [X] Action Item: [] Attachments: [X]
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: (Email) Meetings and Agendas – City Council (10/20/10);
(Newspaper) Notice printed in Culver City News (7/08/09); (Email) Turning Point School
representatives (10/20/10).
Department Approval:
Jeff Muir
City Attorney Approval:
Carol Schwab (by H. Baker) (10/19/10)
Chief Financial Officer Approval:
Jeff Muir (by N. Kimball) (10/20/10)
City Manager Approval:
John M. Nachbar (10/20/10)
RECOMMENDATION:
Staff recommends the City Council conduct the public hearing under the
requirements of the Tax and Equity Fiscal Responsibility Act and the Internal
Revenue Code of 1986, as amended; and approve the issuance of bonds by the
California Municipal Financing Agency for the benefit of MWLA, Inc. (dba Turning
Point School) to provide project financing.
PROCEDURE:
1. Mayor seeks motion from the City Council to receive and file the affidavits of
publication and posting of notices, and correspondence received in response to
the public hearing notices; and,]
2. Mayor calls for a staff report and the City Council Members may pose questions
to staff as desired; and,
3. Mayor seeks a motion to open the public hearing; and,
4. Mayor seeks motion to close the public hearing after all public testimony has
been presented; and,
5. City Council discusses the item and arrives at its decision.
City of Culver City, California
Agenda Item Report
BACKGROUND:
In July 2009, the City Council conducted a public hearing under the requirements of
the Tax and Equity Fiscal Responsibility Act (TEFRA) and the Internal Revenue
Code of 1986, as amended; approved a resolution authorizing the City Manager to
execute a Joint Powers Agreement with the California Municipal Financing Agency
(CMFA); and approved the issuance of bonds by CMFA for the benefit of MWLA,
Inc. (dba Turning Point School) to provide project financing.
By conducting the TEFRA hearing and joining CMFA, the City allowed Turning Point
School to issue approximately $20,000,000 in tax-exempt bonds to refund
$12,000,000 of existing debt and take new proceeds to finance a proposed
expansion to the school. The bonds were issued by CMFA.
CMFA 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 CMFA’s representatives and its Board of
Directors have considerable experience in bond financings.
DISCUSSION:
Due the historically low interest rates currently available, Turning Point School is
interested in lowering their debt service costs by refunding some of their outstanding
bonds. CMFA has once again agreed to work with Turning Point School to issue the
bonds. However, as the local public entity with geographic jurisdiction, the City
Council is being requested conduct a public hearing to satisfy the public approval
requirement of Section 147(f) of the Internal Revenue Code of 1986, as amended.
The purpose of the TEFRA Hearing, as it is commonly referred, is to provide
members of the community an opportunity to speak in favor of or against the use of
tax-exempt bonds for the financing of a proposed project. Following the close of the
TEFRA Hearing, an “applicable elected representative” of the governmental unit
hosting the project (i.e. City of Culver City) must provide its approval of the issuance
of the bonds for the financing of the project.
The bonds to be issued by CMFA for the project will be the sole responsibility of the
borrower (i.e. Turning Point School), and the City will have no financial, legal, or
moral obligation, liability or responsibility for the project or the repayment of the
bonds for the financing of the project. All financing documents with respect to the
issuance of the bonds will contain clear disclaimers that the bonds are not
obligations of the City or the State of California but are to be paid for solely from
funds provided by Turning Point School.
In light of the foregoing, and in order to assist the Turning Point School in lowering
their operating costs, staff recommends that the City Council conduct the TEFRA
Hearing and adopt a resolution in favor of the issuance of the bonds by the CMFA. City of Culver City, California
Agenda Item Report
FISCAL ANALYSIS:
There are no costs associated with membership in the CMFA, and the City will in no
way become exposed to any financial liability by reason of its membership in CMFA.
Outside of holding the TEFRA hearing and adopting the required resolution, no other
participation or activity of the City or the City Council with respect to the issuance of
the Bonds will be required.
Additionally, the Board of Directors of the California Foundation for Stronger
Communities, a California non-profit public benefit corporation (the “Foundation”),
acts as the Board of Directors for the CMFA. Through its conduit issuance activities,
the CMFA shares a portion of the issuance fees it receives with its member
communities and donates a portion of these issuance fees to the Foundation for the
support of local charities. With respect to the City of Culver City, it is expected that
25% of the issuance fee will be granted by the CMFA to the City’s General Fund
(estimated to be approximately $9,000). Such grant may be used for any lawful
purpose of the City. MWLA, Inc. (dba Turning Point School) will be the beneficiary
of the Foundation’s charitable donation through a 25% reduction in issuance fees.
ATTACHMENTS:
1. Proposed Resolution w/ Exhibit A
MOTION:
That the City Council:
1. Adopt a resolution approving the issuance of revenue bonds by the CMFA for
the purpose of financing and refinancing the acquisition, construction, and
improvement of certain facilities for the benefit of MWLA, Inc (dba Turning
Point School); and,
2. Authorize the City Attorney to review/prepare the necessary documents; and,
3. Authorize the City Manager to execute such documents on behalf of the City.
MEETING DATE: October 25, 2010
AGENDA ITEM: Adopt the Resolution Approving the Issuance of Bonds by
California Municipal Finance Authority for the Benefit of
MWLA, Inc. (dba Turning Point School) to Refund Existing
Debt.
ATTACHMENTS
Pages
1. Proposed Resolution w/ Exhibit A ...................................... 1 - 4
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RESOLUTION NO. 2010-R ______
RESOLUTION APPROVING THE ISSUANCE OF REVENUE BONDS
BY THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY FOR THE
PURPOSE OF REFINANCING THE ACQUISITION, CONSTRUCTION
AND IMPROVEMENT OF CERTAIN FACILITIES FOR THE BENEFIT
OF MWLA, INC. (DBA THE TURNING POINT SCHOOL).
WHEREAS, pursuant to Chapter 5 of Division 7 of Title 1 of the Government
Code of the State of California, certain public agencies have entered into a Joint Exercise
of Powers Agreement Relating to the California Municipal Finance Authority, effective as of
January 1, 2004 (the “Agreement”), in order to form the California Municipal Finance
Authority (the “Authority”), for the purpose of promoting economic, cultural and community
development, and in order to exercise any powers common to the Authority’s members,
including the issuance of bonds, notes or other evidence of indebtedness; and
WHEREAS, the City of Culver City, California (the “City”), has determined that
it is in the public interest and for the public benefit that it become, and has become, a
member of the Authority in order to facilitate the promotion of economic, cultural and
community development activities in the City, including the financing of City projects by the
Authority; and
WHEREAS, MWLA, Inc. (dba The Turning Point School), a nonprofit
corporation organized and existing under the laws of the State of California (the “Borrower”)
has requested that the Authority issue and sell revenue bonds in the maximum principal
amount of $18,500,000 (the “Bonds”) for the purpose of making a loan to the Borrower, to
enable the Borrower to finance or refinance the costs of the acquisition, construction and
improvement of the facilities described in the public hearing notice attached hereto as
Exhibit “A” and incorporated herein by this reference (the “Project”); and
WHEREAS, in order for the interest on the Bonds to be tax-exempt, Section
147(f) of the Internal Revenue Code of 1986, as amended (the “Code”), requires that an
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“applicable elected representative” of the governmental unit, the geographic jurisdiction of
which contains the site of facilities to be financed with the proceeds of the Bonds, hold a
public hearing on the issuance of the Bonds and approve the issuance of the Bonds
following such hearing; and
WHEREAS, the Authority has determined that the City Council is an
“applicable elected representative” for purposes of holding such hearing; and
WHEREAS, the Authority has requested that the City Council approve the
issuance of the Bonds by the Authority in order to satisfy the public approval requirement of
Section 147(f) of the Code and the requirements of Section 4 of the Agreement; and
WHEREAS, notice of such public hearing has been duly given as required by
the Code, and this City Council has heretofore held such public hearing at which all
interested persons were given an opportunity to be heard on all matters relative to the
financing or refinancing of the Project and the Authority’s issuance of the Bonds therefore;
and
WHEREAS, it is in the public interest and for the public benefit that the City
Council approve the issuance of the Bonds by the Authority for the aforesaid purposes.
NOW, THEREFORE, the City Council of the City of Culver City, DOES
HEREBY RESOLVE AS FOLLOWS:
SECTION 1. The City Council hereby approves the issuance of the Bonds by
the Authority. It is the purpose and intent of the City Council that this Resolution constitute
approval of the issuance of the Bonds (a) by the “applicable elected representative” of the
governmental unit having jurisdiction over the area in which the Project is located in
accordance with Section 147(f) of the Code and (b) by the City Council in accordance with
Section 4 of the Agreement.
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SECTION 2. The issuance of the Bonds shall be subject to the approval of
the Authority of all financing documents relating thereto to which the Authority is a party.
The City shall have no responsibility or liability whatsoever with respect to the Bonds.
SECTION 3. The adoption of this Resolution shall not obligate the City or any
department thereof to (i) provide any financing to acquire or construct the Project or any
refinancing of the Project; (ii) approve any application or request for or take any other
action in connection with any planning approval, permit or other action necessary for the
acquisition, rehabilitation or operation of the Project; (iii) make any contribution or advance
any funds whatsoever to the Authority; or (iv) take any further action with respect to the
Authority or its membership therein.
SECTION 4. The City Manager, or his or her designee, is hereby authorized
and directed to execute such other agreements, documents and certificates, and to perform
such other acts and deeds, as may be necessary or convenient to effect the purposes of
this Resolution and the transactions herein authorized.
SECTION 5. This resolution shall take effect immediately upon its passage.
APPROVED AND ADOPTED this ____ day of _______ 2010.
CHRISTOPHER ARMENTA, Mayor
City of Culver City, California
ATTEST: APPROVED AS TO FORM:
MARTIN R. COLE, City Clerk CAROL A. SCHWAB, City Attorney
A10-00370 EXHIBIT A
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that on Monday, October 25, 2010, a public hearing as
required by Section 147(f) of the Internal Revenue Code of 1986 (the “Code”) will be held with
respect to the proposed issuance by the California Municipal Finance Authority (the “Authority”)
of its revenue bonds in one or more series in an amount not to exceed $18,500,000 (the
“Bonds”). The proceeds of the Bonds will be used to refund the Authority’s Variable Rate
Demand Revenue Bonds (Turning Point School) Series 2009 originally issued to finance (1) the
renovation, construction and equipping of educational facilities of the Corporation including but
not limited to new classrooms and a theater in an existing 61,000 square-foot building, and
additional parking spaces on real property adjacent to the Corporation’s existing educational
facilities and other improvements to educational facilities for use as part of the Corporation’s
primary, elementary and middle school campuses, and (2) the refunding of $12,000,000 original
principal amount of the California Statewide Communities Development Authority Revenue
Bonds (Turningpoint) Series 2001, the proceeds of which financed educational facilities at the
Corporation’s existing campus (the proposed improvements and the improvements financed with
the proceeds of the 2001 Bonds are collectively referred to as the “Project”).
The Project is located at 8780 National Boulevard, Culver City, County of Los Angeles,
California, 90232 at the southeast corner of National Boulevard and Wesley Street. The Project
will be owned and operated by MWLA, Inc. (dba Turning Point School), an organization
described in Section 501(c)(3) of the Code, as amended. The Corporation owns, or leases
pursuant to a ground lease, all of the real estate on which the Project is to be located.
The hearing will commence at 7:00 o’clock p.m., or as soon thereafter as the matter can
be heard and will be held in the Mike Balkman Council Chambers at Culver City City Hall, 9770
Culver Boulevard, Culver City, California 90232. Interested persons wishing to express their
views on the issuance of the Bonds or on the nature and location of the Project may attend the
public hearing or, prior to the time of the hearing, submit written comments.
The Bonds and the obligation to pay principal of and interest thereon and any redemption
premium with respect thereto do not constitute indebtedness or an obligation of the Authority,
the State of California or any political subdivision thereof, within the meaning of any
constitutional or statutory debt limitation, or a charge against the general credit or taxing powers
of any of them. The Bonds shall be a limited obligation of the Authority, payable solely from
certain revenues duly pledged therefor and generally representing amounts paid by
the Corporation.
Additional information concerning the above matter may be obtained from and written
comments should be addressed to Martin Cole, Assistant City Manager/City Clerk, City of
Culver City, 9770 Culver Boulevard, Culver City, California 90232.
Published in the Culver City News on October 7, 2010.