City of Culver City, California
Agenda Item Report
Meeting Date: 09/12/11 Item Number: PH-1
CITY COUNCIL AGENDA ITEM: PUBLIC HEARING - Adoption of a Resolution
Approving the Issuance of Tax Exempt Bonds by California Municipal Finance
Authority for The HELP Group 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 (9/08/11); (Newspaper)
Notice printed in Culver City News (8/25/11); (Email) The HELP Group representatives
(09/08/11).
Department Approval:
Jeff Muir (09/07/11)
City Attorney Approval:
Carol Schwab (by H. Baker) (09/07/11)
Chief Financial Officer Approval:
Jeff Muir (09/07/11)
City Manager Approval:
John M. Nachbar (09/08/11)
RECOMMENDATION:
Staff recommends the City Council 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 approve the issuance of bonds by
California Municipal Financing Agency for the benefit of The HELP Group to refund
existing debt.
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 adopted a resolution authorizing the City Manager to
execute a Joint Powers Agreement with California Municipal Finance Authority
(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.
The HELP Group requested that the CMFA serve as the municipal issuer of an
aggregate principal amount not to exceed $26,000,000 of tax-exempt revenue bonds
relating to the financing and refinancing of projects for New School for Child
Development, Project Six, Summit View School, The Help Group Child and Family
Center and The Help Group West (collectively doing business as The Help Group)
(the “Corporations”).
DISCUSSION:
Due to the historically low rates currently available, The HELP Group is interested in
lowering their debt service costs by refunding some of their outstanding bonds. The
CMFA has agreed to work with The HELP Group to issue the bonds. However, as
the local public entity with geographic jurisdiction, the City Council is requested to
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. The HELP Group), and the City will have no financial, legal, or moral
obligation, nor 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
The HELP Group.
In light of the foregoing, and in order to assist The HELP Group in lowering their
operating costs, staff recommends that the City Council conduct the TEFRA Hearing
and adopt the resolution in favor of the issuance of the bonds by the CMFA.
City of Culver City, California
Agenda Item Report
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 HELP Group will be
the beneficiary of the Foundation’s 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, and
improvement of certain facilities for the benefit of The HELP Group
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 New School for Child
Development, Project Six, Summit View School, The Help Group Child and
Family Center and The Help Group West (collectively doing business as The
Help Group); 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: September 12, 2011
AGENDA ITEM: Adopt a Resolution Approving the Issuance of Tax Exempt
Bonds by California Municipal Finance Authority for The
HELP Group to Refund Existing Debt.
ATTACHMENTS
Pages
1. Proposed Resolution w/ Exhibit A ...................................... 1 - 7
EXHIBIT A
NOTICE OF PUBLIC HEARING
PUBLIC NOTICE IS HEREBY GIVEN that on Monday, September 12, 2011, at or about
7:00 P.M., a public hearing will be held as required by section 147(f) of the Internal Revenue
Code of 1986, by the City Council of the City of Culver City, California (the “City”), in the Mike
Balkman Council Chambers, 9770 Culver Boulevard, Culver City, California, with respect to the
proposed issuance by the California Municipal Finance Authority of revenue bonds in an
amount not to exceed $26,000,000 (the “Bonds”) relating to the financing and refinancing of
projects for New School for Child Development, Project Six, Summit View School, The Help
Group Child and Family Center and The Help Group West (collectively doing business as The
Help Group) (the “Corporations”).
The Bonds will be issued in part to:
(a) provide for the current refunding of the outstanding the outstanding California
Health Facilities Financing Authority Insured Health Facility Revenue Bonds (The H.E.L.P.
Group), 1998 Series A, the proceeds of which were used to:
(i) refinance obligations incurred by the New School for Child Development and
Project Six relating to the acquisition of the following facilities: (A) Corwin Group
Home, 10055 Mason Avenue, Chatsworth, CA; (B) Lomita Group Home, 325 North
Lomita, Burbank, CA; (C) Meyer Group Home, 1447 North Meyer Street, Burbank, CA;
(D) Apartment Building I, 13110 Burbank Boulevard, Van Nuys, CA; (E) Apartment
Building II, 13116 Burbank Boulevard, Van Nuys, CA; (F) Apartment Building III, 13120
Burbank Boulevard, Van Nuys, CA; (G) Apartment Buildings IV and V, 13100-06
Burbank Boulevard, Van Nuys, CA; (H) 5529 Ethel Avenue, Sherman Oaks, CA; (I) 5533
Ethel Avenue, Sherman Oaks, CA; and (J) 5543 Ethel Avenue, Sherman Oaks, CA,
(ii) acquire and renovate four buildings on approximately 2.4 acres of land at
6421-6455 Coldwater Canyon Avenue, Los Angeles (North Hollywood), CA, to
accommodate special education and therapeutic facilities for children and adolescents
with learning disabilities and related special needs, including classrooms, therapy
offices and general administrative offices, to be owned and operated by Summit View
School, and
(iii) refund the California Health Facilities Financing Authority Insured Health
Facility Revenue Bonds (The H.E.L.P. Group), 1991 Series A, dated as of August 1, 1991,
issued to finance the following projects: (A) construction of a two-story, approximately
24,000 square foot building, located at 13130 Burbank Boulevard, Sherman Oaks, CA, to
house classrooms, therapy offices, and administrative offices, (B) remodeling of the
existing main facility for school, therapy and/or administrative facilities, located at
13130 Burbank Boulevard, Sherman Oaks, CA, and (C) construction of an approximately
16,000 square feet school, therapy/administrative facility and a 6,000-plus square foot
multi-purpose center, parking and storage facilities, located at 13130 Burbank
Boulevard, Sherman Oaks, CA; and
6
(b) provide for the current refunding of the outstanding California Health Facilities
Financing Authority Insured Health Facility Revenue Bonds (The H.E.L.P. Group), 2000 Series
A, the proceeds of which were used to:
(i) acquire and renovate an approximately 61,000 square foot hospital located at
12101 Washington Boulevard, Culver City, California,
(ii) acquire and renovate an approximately 23,000 square foot medical building
located at 12099 Washington Boulevard, Culver City, California,
(iii) acquire and renovate an approximately 20,100 square foot medical
arts/pharmacy located at 12095 Washington Boulevard, Culver City, California, and
(iv) acquire and renovate an approximately 4,000 square foot strip center located
at 12163 Washington Boulevard, Culver City, California.
All facilities are owned by the Corporations and used in connection with their non-
public schools and mental health centers for children with learning disabilities.
The Bonds will not be deemed to constitute a debt or liability of the City, the State of
California (the “State”) or any political subdivision thereof, other than the Authority, but will be
payable solely from the funds provided therefor. The Authority will not be obligated to pay the
principal of the Bonds, or the redemption premium, if any, or interest thereon, except from
funds provided from loan repayments by the Corporations. Neither the faith and credit nor
taxing power of the City, the State or any political subdivision thereof, including the Authority,
will be pledged to the payment of the principal or redemption premium, if any, or interest on
the Bonds. The issuance of the Bonds will not directly, indirectly or contingently obligate the
City, the State or any political subdivision thereof to levy or to pledge any form of taxation or to
make any appropriation for their payment. The Authority has no taxing power.
Those wishing to comment on the proposed financing and the nature and location of the
Projects may either appear in person at the public hearing or submit written comments, which
must be received by the City prior to the hearing. Additional information concerning the above
matter and written comments should be sent to the Office of the City Clerk, City of Culver City,
City of Culver City, City Hall, 9770 Culver Boulevard, Culver City, CA. 90232; Phone: (310)253-
5851; Fax: (310) 253-5380; or via the City’s website, www.culvercity.org.
The City is conducting the public hearing as an accommodation to the Corporations. The
City will not be the issuer of the Bonds and takes no responsibility for the Bond financing.
Date: August 25, 2011
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