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CC - PUBLIC HEARING - (1) Conduct a Public Hearing Pursuant to the Requirements of Tax and Equity Fiscal Responsibility Act and the Internal Revenue Code of 1986, as Amended; (2) Adoption of a Resolution to Approve the Issuance of Revenue Bonds by the California Municipal Finance Authority to Assist in the Financing or Refinancing of the Willows Community School located in Culver City, California; and (3) Approve the Deposit of Approximately $9,000 in Issuance Fees to the General Fund.
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Meeting Date: 06/26/2017
Contact Person/Dept: Jeff Muir, Finance
Phone Number: (310) 253-5865
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: (E-Mail) Meetings and Agendas - City Council (06/21/17)
Department Approval: Jeff Muir, Chief Financial Officer (06/07/17)
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RECOMMENDATION
Staff recommends the City Council:
1. Conduct the public hearing under the requirements of Tax and Equity Fiscal Responsibility Act (TEFRA) and the Internal Revenue Code of 1986, as amended; and
2. Adopt a Resolution approving the issuance of revenue bonds by the California Municipal Finance Authority (CMFA) for the benefit of the Willows Community School, a California nonprofit corporation and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, to provide for tax-exempt financing in an amount not to exceed $25,500,000 for the purpose of financing and refinancing the acquisition, construction, improvement, renovation, furnishing and/or equipping of certain educational and related facilities. Such adoption is solely for the purposes of satisfying the requirements of TEFRA, the Internal Revenue Code and California Government Code Section 6500; and
3. Approve the deposit of approximately $9,000 in issuance fees to the Culver City General Fund.
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 a motion to close the public hearing after all public testimony has been presented; and,
The City Council discusses the item and arrives at its decision.
BACKGROUND/DISCUSSION
The City was asked to conduct a public hearing under the Tax and Equity Fiscal Responsibility Act (“TEFRA”) on June 26, 2017 in connection with the proposed issuance of a tax-exempt loan by the California Municipal Finance Authority (“CMFA”), a joint exercise of powers authority and public entity of the State of California, in an amount not to exceed $25,500,000, (the “Loan”), to assist the Willows Community School in the financing and refinancing of the acquisition, construction, improvement, renovation, furnishing and/or equipping of certain educational and related facilities located in the City of Culver City, California (the "Project").
The Willows Community School, has requested that the California Municipal Finance Authority participate in the issuance of a tax-exempt loan in an aggregate principal amount not to exceed $25,500,000 pursuant to a plan of finance to (1) finance and refinance the 2017 Project, as defined below; (2) refund all of the outstanding California Municipal Finance Authority 2012 Tax-Exempt Loan (Willows Community School) (the “2012 Loan”), issued to finance or refinance the 2012 Project, as defined below; and (3) certain expenses incurred in connection with the Tax-Exempt Loan.
The term “2017 Project” means financing the acquisition, construction, improvement, renovation, furnishing and/or equipping of certain educational and related facilities, including athletic facilities, located on property adjacent to the Borrower’s main campus in the City of Culver City at: 8525 Higuera Street, Culver City, California 90232 and 8520 Warner Drive, Culver City, California 90232.
The term “2012 Project” means financing and refinancing the acquisition, construction, improvement, renovation, furnishing and/or equipping of certain educational facilities, including related administrative and athletic facilities, site improvements, and parking, located on the Borrower’s main campus in the City of Culver City at: 8479, 8487 & 8509 Higuera Street, Culver City, California 90232; and 8476, 8490 & 8510 Warner Drive, Culver City, California 90232.
In order for all or a portion of the Loan to qualify as a tax-exempt loan, the City of Culver City 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 a tax-exempt loan 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 Loan for the financing of the Project.
CALIFORNIA MUNICIPAL FINANCE AUTHORITY:
The CMFA 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 260 municipalities, including the City of Culver City, have become members of CMFA.
The 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.
FISCAL ANALYSIS
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 approximately $9,000 of the issuance fee attributable to the City will be granted by the CMFA to the general fund of the City.
ATTACHMENTS
1. 2017-06-26_ATT_Willows TEFRA Resolution
MOTION
That the City Council:
1. Conduct the public hearing under the requirements of TEFRA and the Internal Revenue Code of 1986, as amended (the “Code”); and
2. Adopt a Resolution approving the issuance of revenue bonds by the California Municipal Finance Authority (CMFA) for the benefit of the Willows Community School, a California nonprofit corporation and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, to provide for tax-exempt financing in an amount not to exceed $25,500,000 for the purpose of financing and refinancing the acquisition, construction, improvement, renovation, furnishing and/or equipping of certain educational and related facilities. Such adoption is solely for the purposes of satisfying the requirements of TEFRA, the Internal Revenue Code and California Government Code Section 6500; and
3. Approve the deposit of approximately $9,000 in issuance fees to the Culver City General Fund.