City of Culver City, California
Agenda Item Report
Meeting Date: 07/02/12 Item Number: PH-1
CITY COUNCIL AGENDA ITEM: PUBLIC HEARING - Adoption of a Resolution
Approving the Issuance of Tax Exempt Bonds by the California Municipal Finance
Authority for The Willows Community School to Finance and Refinance
Educational Facilities.
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 (6/28/12); (Newspaper)
Notice printed in Culver City News (6/14/12); (Email) The Willows Community School
representatives (06/27/12).
Department Approval:
Jeff Muir (06/26/12)
City Attorney Approval:
Carol Schwab (by H. Baker) (06/25/12)
Chief Financial Officer Approval:
Jeff Muir (06/26/12)
City Manager Approval:
John M. Nachbar (06/27/12)
RECOMMENDATION:
Staff recommends the City Council conduct a 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
Finance Authority for the benefit of The Willows Community School to provide
project financing.
PROCEDURE:
1. The 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. The Mayor calls for a staff report and the City Council Members may pose
questions to staff as desired; and,
3. The Mayor seeks a motion to open the public hearing; and,
4. The Mayor seeks motion to close the public hearing after all public testimony has
been presented; and,
5. The 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 joined the California Municipal Finance Authority
(CMFA) by approving a resolution authorizing the City Manager to execute a Joint
Powers Agreement with CMFA. CMFA is a Joint Powers Authority that 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.
The Willows Community School contacted CMFA and has requested that they serve
as the municipal issuer of tax-exempt revenue bonds in an aggregate principal
amount not to exceed $17,000,000. Proceeds from the proposed bond issue will be
used to finance and refinance the acquisition, construction, improvement and
equipping of certain educational facilities, including related administrative and
athletic facilities, site improvements, and parking for the benefit of The Willows
Community School (the “Borrower”).
CMFA has agreed to work with The Willows Community School to issue tax exempt
bonds. However, as the local public entity with geographic jurisdiction, Culver City 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 City has held a number of TEFRA hearings over the last few years, including
hearings for Turning Point School and The HELP Group.
DISCUSSION:
The bonds to be issued by CMFA for the project will be the sole responsibility of the
borrower (i.e. The Willows Community 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 either the City or the State of California, but are to be paid for solely
from funds provided by The Willows Community School.
In light of the foregoing, and in order to assist The Willows Community School in
keeping their operating costs as low as possible, staff recommends that the City City of Culver City, California
Agenda Item Report
conduct the TEFRA Hearing and adopt the resolution in favor of the issuance of the
bonds by the CMFA.
FISCAL ANALYSIS:
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.
Such grant may be used for any lawful purpose of the City. The Willows Community
School will be the beneficiary of the Foundations charitable donation through a 25%
reduction in issuance fees.
ATTACHMENTS:
1. Resolution approving the issuance of revenue bonds by the Authority for
the purpose of financing and refinancing the acquisition, construction,
improvement and equipping of certain educational facilities for the benefit
of The Willows Community School.
MOTION:
That the City Council:
1. Adopt a resolution approving the issuance of revenue bonds by the Authority
for the purpose of financing and refinancing facilities for The Willows
Community 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: July 2, 2012
AGENDA ITEM: Adoption of a Resolution Approving the Issuance of Tax
Exempt Bonds by the California Municipal Finance Authority
for The Willows Community School to Finance and Refinance
Educational Facilities.
ATTACHMENTS
Pages
1. Proposed Resolution ........................................................... 1 - 3
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1 RESOLUTION NO. 2012-R
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WHEREAS, The Willows Community School, a California nonprofit public
benefit corporation and an organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended (the "Borrower"), has requested that the California
Municipal Finance Authority (the "Authority") participate in the issuance of one or more
series of revenue bonds in an aggregate principal amount not to exceed $17,000,000 (the
"Bonds") to finance and refinance the acquisition, construction, improvement and equipping
of certain educational facilities, including related administrative and athletic facilities, site
improvements, and parking, located 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; (collectively, the "Project"), to be owned and operated by the
Borrower and located within the City of Culver City (the "City"); and (2) pay costs of
issuance and certain interest with respect to the Bonds; and
WHEREAS, pursuant to Section 147(f) of the Internal Revenue Code of 1986
(the "Code"), the issuance of the Bonds by the Authority must be approved by the City
because the Project is to be located within the territorial limits of the City; and
WHEREAS, the City Council of the City (the "City Council") is the elected
legislative body of the City and is one of the "applicable elected representatives" required
to approve the issuance of the Bonds under Section 147(f) of the Code; and
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CULVER
CITY, CALIFORNIA, APPROVING THE ISSUANCE OF THE
CALIFORNIA MUNICIPAL FINANCE AUTHORITY REVENUE BONDS
(THE WILLOWS COMMUNITY SCHOOL), SERIES 2012, IN AN
AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $17,000,000
FOR THE PURPOSE OF FINANCING AND REFINANCING THE
ACQUISITION, CONSTRUCTION, IMPROVEMENT AND EQUIPPING
OF EDUCATIONAL, ADMINISTRATIVE AND ATHLETIC FACILITIES
AND CERTAIN OTHER MATTERS RELATING THERETO. I WHEREAS, the Authority has requested that the City Council approve the
2 issuance of the Bonds by the Authority in order to satisfy the public approval requirement
3 of Section 147(f) of the Code and the requirements of Section 4 of the Joint Exercise of
4 Powers Agreement Relating to the California Municipal Finance Authority, dated as of
5 January 1, 2004 (the "Agreement"), among certain local agencies, including the City; and
6 WHEREAS, pursuant to Section 147(f) of the Code, the City Council has,
7 following notice duly given, held a public hearing regarding the issuance of the Bonds, and
8 now desires to approve the issuance of the Bonds by the Authority.
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NOW, THEREFORE, the City Council of the City of Culver City, California,
10 DOES HEREBY RESOLVE as follows:
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1. The foregoing recitals are true and correct.
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2. The City Council hereby approves the issuance of the Bonds by the
13 Authority. It is the purpose and intent of the City Council that this resolution constitute
14 approval of the issuance of the Bonds by the Authority for the purposes of: (a) Section
15 147(f) of the Code, by the applicable elected representative of the governmental unit
16 having jurisdiction over the area in which the Project is to be located, in accordance with
17 said Section 147(f), and (b) Section 4 of the Agreement.
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3. The issuance of the Bonds shall be subject to approval of the Authority
19 of all financing documents relating thereto to which the Authority is a party. The City shall
20 have no responsibility or liability whatsoever with respect to repayment or administration of
21 the Bonds.
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4. The adoption of this Resolution shall not obligate the City or any
23 department thereof to (i) provide any financing with respect to the Project; (ii) approve any
24 application or request for or take any other action in connection with any planning approval,
25 permit or other action necessary with respect to the Project; (iii) make any contribution or
26 advance any funds whatsoever to the Authority; or (iv) take any further action with respect
27 to the Authority or its membership therein.
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-2- ANDREW WEISSMAN , MAYOR
City of Culver City, California
ATTEST:
MARTIN R. COLE, City Clerk
Al2-00514
A. SCHWAB, City Attorney
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5. The officers of the City are hereby authorized and directed, jointly and
2 severally, to do any and all things and to execute and deliver any and all documents which
3 they deem necessary or advisable in order to carry out, give effect to and comply with the
4 terms and intent of this resolution and the financing transaction approved hereby.
5 6. This Resolution shall take effect immediately upon its adoption.
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APPROVED and ADOPTED this day of 2012.
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