75A - PH - ISSUANCE OF OBLIGATIONS FOR OCBF

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TEFRA Public Hearing for Orange County Bar Foundation January 17, 2017 Page 2 development programs, Higher Education Mentoring and Project SELF, to health education programs, Madres Unidas and Cuidate. The City is an associate member of the Authority, a joint powers agency established by the California Association for Local Economic Development whose purpose is to issue tax - exempt and taxable conduit revenue bonds to fund commercial and industrial development projects within member jurisdictions. The Joint Powers Act, comprising Articles 1, 2, 3 and 4 of Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the Government Code of the State of California and Internal Revenue Code Section 145 provide for the issuance of tax - exempt "private activity" obligations by a conduit governmental issuer on behalf of a 501(c)(3) corporation to finance facilities used, owned and /or operated by such entity. For interest on such private activity obligations to be tax - exempt, Section 147(f) of the Internal Revenue Code requires, among other things, the obligations and the facilities financed thereby must be approved by both the governmental unit which will issue the obligations (in this case, the Authority) and the governmental unit in which the obligation- financed facilities are located (City of Santa Ana). Further, a public hearing, for which reasonable notice has been given, must be held. This hearing and process is referred to as Tax Equity and Financial Responsibility Act ( TEFRA), after the Tax Equity and Fiscal Responsibility Act of 1982. The assets to be financed with the proceeds of the Obligations are located within the jurisdiction of the City. Therefore, the City has been asked to conduct the public hearing, and to approve the Obligations as the host governmental unit. The City has effectuated proper notice of the hearing via publication at least 14 days in advance. The Obligations will be payable solely from amounts received pursuant to the terms and provisions of one or more loan agreements to be executed by the Authority and the Foundation. The City will not be a party to any loan agreement or any other documents in connection with the issuance of the Obligations. The Obligations will not be secured by any form of taxation or by any obligation of either the City or the Authority. Neither will the Obligations represent or constitute a general obligation of either the City or the Authority. As announced in the published notice, the TEFRA hearing is an opportunity for all interested persons to speak or to submit written comments concerning the proposal to issue the Obligations to finance the Facilities. There is no requirement that either the Foundation or the City Council respond to any specific comments made or submitted at the hearing. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #2 — Youth, Education, Recreation, Objective #4 (Partner with groups and organizations to promote education, senior services, job training and development for all Santa Ana residents). 75A -2