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HomeMy WebLinkAbout75C - PH - TOWN AND COUNTRY MANOR TEFRA REQUESTREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: CLERK OF COUNCIL USE ONLY: MAY 6, 2013 TITLE: PUBLIC HEARING ON ISSUANCE OF TAX EXEMPT BONDS FOR TOWN AND COUNTRY MANOR APPROVED ? As Recommended ? As Amended ? Ordinance on 1st Reading ? Ordinance on 2nd Reading ? Implementing Resolution ? Set Public Hearing For_ f-.. CITY MANA ER RECOMMENDED ACTION CONTINUED TO FILE NUMBER Conduct a Tax Equity and Financial Responsibility Act hearing in consideration of the issuance of tax exempt bond financing by the California Municipal Finance Authority on behalf of Town and Country Manor. 2. Adopt a resolution approving the issuance of revenue bonds by the California Municipal Finance Authority in an amount not to exceed $8,700,000 for the purpose of making a loan to Town and Country Manor to enable repayment in full and retire the Outstanding Bonds. DISCUSSION Town and Country Manor of the Christian and Missionary Alliance, located at 555 East Memory Lane, has requested the assistance of the California Municipal Finance Authority (CMFA). CMFA, which was established in 2004, was formed to assist local governments and non-profit organizations and businesses with the issuance of taxable and tax exempt bonds with the goal to promote economic, cultural, and community development. The City is a member of the CMFA. In October 1990, the City issued Multi-Modal Interchangeable Rate Health Facility Revenue Bonds (Town and Country Manor Project) Series 1990, to finance the construction of a new wing to house additional residential care apartment units, the construction of a new building to house additional skilled nursing facilities, the relocation of existing intermediate care units and creation of assisted living units in the Town and Country Manor's then existing facility, and the refinancing of outstanding indebtedness incurred in connection with its existing project. At this time, the letter of credit is expiring and Town and Country wants to refinance the existing debt to a lower interest rate. However, in order for all or a portion of the Bonds to qualify as tax-exempt bonds, the City of Santa Ana must conduct a Tax Equity and Financial Responsibility Act (TEFRA) hearing which 75C-1 PH TEFRA - Town & Country May 6, 2013 Page 2 provides for the members of the community an opportunity to comment on the use of tax-exempt bonds for the refinancing of the project and adopt a resolution approving the issuance of bonds. The bonds to be issued by the CMFA are the sole responsibility of the Town and Country Manor. The City has no financial or legal liability for the project or repayment of the bonds and does not constitute any type of indebtedness for the City. In addition, Town and Country currently is in site plan review for an expansion of their project. The developer anticipates that the project will start construction in 18-24 months. The expansion of the project will come before the Planning Commission and City Council for approval within the next 12-18 months. FISCAL IMPACT There are no fiscal or economic liabilities or obligations assumed or imposed upon the City of Santa Ana as a result of the public hearing or the adoption of the resolution. it' L-C Sandi Gottlieb Acting Executive Director Community Development Agency SG/SLB/kg Exhibit: 1. Resolution 75C-2 EXHIBIT 1 RESOLUTION NO. 2013- 4.22.13 LES A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING THE ISSUANCE OF REVENUE BONDS BY THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY FOR THE PURPOSE OF REFINANCING THE ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF CERTAIN RETIREMENT, NURSING AND ASSISTED LIVING FACILITIES AT TOWN AND COUNTRY MANOR AND CERTAIN OTHER MATTERS PERTAINING THERETO BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA, AS FOLLOWS: Section 1: The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. Pursuant to Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the "Act"), certain public agencies (the "Members") have entered into a Joint Exercise of Powers Agreement Relating to the California Municipal Finance Authority dated as of January 1, 2004 (the "Agreement") in order to form the California Municipal Finance Authority (the "CMFA"), for the purpose of promoting economic, cultural and community development, and in order to exercise any powers common to the Members, including the issuance of bonds, notes or other evidences of indebtedness. B. The City of Santa Ana, California (the "City"), is a Member of the CMFA. C. The CMFA is authorized to issue and sell revenue bonds for the purpose of refinancing existing debt. D. Town and Country Manor of The Christian and Missionary Alliance, a nonprofit public benefit corporation organized and existing under the laws of the State of California and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986 (the "Borrower"), has requested that the CMFA issue and sell revenue bonds in the maximum principal amount of $8,700,000 (the "Bonds") for the purpose of making a loan to the Borrower to enable the Borrower to refinance the outstanding principal amount of the Multi-Modal Interchangeable Rate Health Facility Revenue Bonds ("Town and Country Manor Project") Series 1990, issued by the City for the purpose of making a loan to the Borrower in order to finance the construction of a new wing to house additional residential care apartment units, the construction of a new building to house additional skilled nursing facilities, the relocation of existing intermediate care units and creation of assisted living units in the Borrower's then existing facility, and the refinancing of the Borrower's outstanding indebtedness incurred in connection with its existing facility, all of which facilities are located at 555 East Memory Lane, Santa Ana, California 92706 (the "Project"), including the cost of issuing the Bonds. 75C-3 4.22.13 LES E. The Borrower has requested the issuance of the Bonds in order to effect savings in interest rate and/or issuance costs to effect significant public benefits pursuant to the Act. F. 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 "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. G. The CMFA has determined that the City Council is the "applicable elected representatives" for purposes of holding such public hearing. H. The CMFA has requested that the City Council approve the issuance of the Bonds by the CMFA in order to satisfy the public approval requirement of Section 147(f) of the Code, the requirements of Section 6586.5 of the Act, and the requirements of Section 4 of the Agreement. 1. 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 CMFA's issuance of the Bonds therefor. J. It is in the public interest and there are significant public benefits from the issuance of the Bonds for the financing of the Project, including demonstrable savings in effective interest rate costs. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL, AS FOLLOWS: Section 2. The City Council hereby approves the issuance of the Bonds by the CMFA and finds the Project will create the significant public benefits set forth in foregoing recitals. 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; (b) by the City Council in accordance with Section 6586.5 of the Act; and (c) by the City Council in accordance with Section 4 of the Agreement. Section 3. The issuance of the Bonds shall be subject to approval by the CMFA of all financing documents relating thereto to which the CMFA is a party. The City shall have no responsibility or liability whatsoever with respect to the Bonds. Section 4. 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 2 75C-4 4.22.13 LES acquisition, rehabilitation or operation of the Project; (iii) make any contribution or advance any funds whatsoever to the CMFA; or (iv) take any further action with respect to the CMFA or its membership therein. Section 5. The executing officer(s), the Clerk of the Council and all other proper officers and officials of the City are hereby authorized and directed to execute such other agreements, documents and certificates, and to perform such other acts and deeds, as may be necessary to effect the purposes of this Resolution and the transactions herein authorized. Section 6. The Clerk shall forward a certified copy of this Resolution to the CMFA in care of its counsel: Ronald E. Lee, Esq. Jones Hall, a Professional Law Corporation 650 California St., 18th Floor San Francisco, CA 94108 Section 7. This resolution shall take effect immediately upon its passage. 3 75C-5 4.22.13LES ADOPTED this day of May, 2013. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho City Attorney By: Lisa E. Storck Assistant City Attorney AYES: Councilmembers: NOES: Councilmembers: ABSTAIN: Councilmembers: NOT PRESENT: Councilmembers: CERTIFICATION OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of Council, do hereby attest to and certify the attached Resolution No. 2013- to be the original resolution adopted by the City Council of the City of Santa Ana on May _, 2013. Date: Clerk of Council City of Santa Ana 4 75C-6