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HomeMy WebLinkAbout75A - PH - ISSUANCE OF OBLIGATIONS FOR OCBFREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JANUARY 17, 2017 TITLE: PUBLIC HEARING FOR THE ISSUANCE OF OBLIGATIONS BY THE CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY FOR THE BENEFIT OF ORANGE COUNTY BAR FOUNDATION (STRATEGIC PLAN NO. 2,4) CITY,MAN GER • r r CLERK OF COUNCIL USE ONLY: _O•:• _"k ❑ As Recommended ❑ As Amended ❑ Ordinance on 151 Reading ❑ Ordinance on 2 "d Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER 1. Conduct a Tax Equity and Financial Responsibility Act hearing in consideration of issuance of tax - exempt obligations by the California Enterprise Development Authority for the purpose of financing facilities located in Santa Ana, California for the benefit of Orange County Bar Foundation, Inc; and 2. Adopt a resolution approving the issuance of the tax - exempt obligations by the California Enterprise Development Authority in an aggregate principal amount not to exceed $2,000,000 for the purpose of financing facilities located in Santa Ana, California for the benefit of Orange County Bar Foundation, Inc. DISCUSSION Orange County Bar Foundation, Inc., a California nonprofit public benefit company (the "Foundation "), has requested that the California Enterprise Development Authority (the "Authority ") issue revenue obligations in the maximum principal amount of $2,000,000 (the "Obligations ") for the purpose of making one or more loans to the Foundation, to enable the Foundation to finance the cost of acquisition, construction, development, renovation, furnishing and equipping facilities located at 1605 E. 17th Street, Santa Ana, California 92706 (the "Facilities "). A portion of the proceeds of the Obligations will be used to pay costs of issuance in connection with the financing. Since 1969, the Foundation has operated a wide range of youth and family oriented programs and remained committed to its mission of keeping at -risk youth in school, healthy, and drug -free through education, counseling, mentoring, and family strengthening. The programs range from diversion programs, Shortstop /Programa and Stop Short of Addiction, to academic and career 75A -1 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 TEFRA Public Hearing for Orange County Bar Foundation January 17, 2017 Page 3 FISCAL IMPACT The City's approval of this financing bears with it no cost or other financial obligation, but serves as a public acknowledgement of the financing and refinancing of the Facilities by the host jurisdiction. Robe C. Corte Deputy City Manager City Manger's Office RC /MM /sb Exhibits: 1. Public Notice 2. TEFRA Resolution 75A -3 75A -4 ORANGE COUNTY REPORTER — SINCE 1921 — 600 W SANTA ANA BLVD, SANTA ANA, CA 92701 Telephone (714) 543 -2027 / Fax(714)542 -6841 ELISABETH LEE KUTAK ROCK 777 S. FIGUEROA ST. SUITE 4550 LOS ANGELES, CA - 90017 PROOF OF PUBLICATION (2015.5 C.C.P.) State of California ) County of ORANGE j ss Notice Type: HRG - NOTICE OF HEARING Ad Description: ORANGE OUNTY BAR FOUNDATION TEFRA NOTICE 2017 I am a citizen of the United States and a resident of the State of California; I am over the age of eighteen years, and not a party to or interested in the above entitled matter. I am the principal clerk of the printer and publisher of the ORANGE COUNTY REPORTER, a newspaper published in the English language in the city of SANTA ANA, county of ORANGE, and adjudged a newspaper of general circulation as defined by the laws of the State of California by the Superior Court of the County of ORANGE, State of California, under date 06/20/1922, Case No. 13421. That the notice, of which the annexed is a printed copy, has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to -wit 12/23/2016 Executed on: 12/23/2016 At Los Angeles, California I certify (or declare) under penalty of perjury that the foregoing is true and correct. Email * A 0 0 0 0 0 4 3 1 3 5 9 7 space for filing stamp only O R #: 2959987 NOTICE OF PUBLIC HEARING plan of finance may either appear in PURSUANT TO SECTION 147(f) person at the time and place indicated OF THE INTERNAL REVENUE CODE above or submit written comments, which OF 1986, AS AMENDED, must be received prior to the Public IN CONNECTION WITH THE Hearing by the Clerk of the City, at City of FINANCING OF FACILITIES Santa Ana, 20 Civic Center Plaza, 8th FROM THE SALE OF TAX- EXEMPT Floor, Santa Ana, California 92701, OBLIGATIONS FOR THE BENEFIT OF ORANGE Date: December 23, 2016 COUNTY BAR FOUNDATION, INC. 12/23/16 OFFICE IS HEREBY GIVEN that at 5:45 OR- 2959987# an and a kitchen along wlth parking. The Borrower will also use a portion of the proceeds of the Obligators to pay certain costs of issuance in connection with the Obligations. The Facilities will be owned and operated by the Borrower in connection with its tax- exempt mission of keeping at -risk youth in school, healthy and drug -free through education, counseling, mentoring, and family strengthening. The Borrower operates several programs to empower youth and families to marks positive choices, building the foundation for a lifetime of opportunity and success. Thase wishing to comment on the issuance of the Obligations, proposed nature and location of the Facilities or the 75A -6 RESOLUTION NO. 2017- xxx RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING THE ISSUANCE OF TAX - EXEMPT OBLIGATIONS BY THE CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $2,000,000 TO FINANCE FACILITIES FOR THE BENEFIT OF THE ORANGE COUNTY BAR FOUNDATION, INC. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: WHEREAS, the Orange County Bar Foundation, Inc., a California nonprofit public benefit corporation (the "Borrower "), has requested that the California Enterprise Development Authority, a joint exercise of powers agency established pursuant to the laws of the State of California (the "Authority'), issue its tax - exempt obligations, from time to time pursuant to a plan of finance (the "Obligations "), in an aggregate principal amount not expected to exceed $2,000,000, for the benefit of the Borrower, pursuant to Chapter 5 of Division 7 of Title 1 of the Government Code of the State (commencing with Section 6500) (the "Act'), for the purpose of making one or more loans to the Borrower to finance the cost of acquiring, constructing, installing, improving, equipping and furnishing the real property and improvements located at 1605 E. 17th Street, Santa Ana, California 92706 (collectively, the "Facilities "); and xxx WHEREAS, a portion of the proceeds of the Obligations will be used to pay the costs of issuance in connection with such financing and other related costs; and WHEREAS, the Borrower is an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986 (the "Code ") and will own and operate the Facilities in connection with its mission of keeping at -risk youth in school, healthy and drug -free through education, counseling, mentoring, and family strengthening; and WHEREAS, the issuance of the Obligations must be approved by the governmental unit on behalf of which the Obligations are issued and a governmental unit having jurisdiction over the territorial limits in which the Facilities are located pursuant to the public approval requirement of Section 147(f) of the Code; and WHEREAS, the Facilities are located within the territorial limits of the City of Santa Ana (the "City "), and the City Council of the City (the "City Council ") is the elected legislative body of the City and is the "applicable elected representative" required to approve the issuance of the Obligations under Section 147(f) of the Code; and WHEREAS, the City is an associate member of the Authority; and WHEREAS, the issuance of the Obligations shall be subject to the approval of and execution by the Authority of all financing documents relating thereto to which the Authority is a party; and F, iI,BIT WHEREAS, the Authority and the Borrower have requested the City Council to approve the issuance of the Obligations in order to satisfy the public approval requirements of Section 147(f) of the Code; and WHEREAS, a public hearing was held by the City Council on this 17'" day of January, 2017, at the meeting which commenced at the hour of 5:45 p.m., in the City Hall Council Chamber, 22 Civic Center Plaza, Santa Ana, California 92701, following duly published notice thereof in a newspaper of general circulation in the City of Santa Ana, on December 30, 2016, and all persons desiring to be heard have been heard; and WHEREAS, it is intended that this Resolution shall comply with the public approval requirements of Section 147(f) of the Code; provided, however, that this Resolution is neither intended to nor shall it constitute an approval by the City Council of the Facilities for any other purpose,, including, but not limited to, compliance with the California Environmental Quality Act (California Public Resources Code, Section 21100, et seq.) ( "CEQA "); NOW, THEREFORE, BE IT RESOLVED, that the City Council hereby finds and declares the above recitals are true and correct; and, be it further resolved as follows: Section 1. The City Council hereby finds and determines that all of the recitals are true and correct. The City Council, as the "applicable elected representative" of the governmental unit on behalf of which the Obligations will be issued and having jurisdiction over the area in which the Facilities are located, hereby approves the issuance of the Obligations by the Authority, which Obligations may be tax - exempt and/or taxable as approved by the Authority in its resolution, in an amount not to exceed $2,000,000 to finance the cost of the Facilities. This Resolution shall constitute "issuer" approval and "host" approval of the issuance of the Obligations within the meaning of Section 147(f) of the Code; provided, however, that this Resolution shall not constitute an approval by the City Council of the Facilities for any other purposes, including compliance thereof with CEQA, nor does it constitute an approval of the underlying credit or financial structure of the Obligations. The City shall not bear any responsibility for the issuance of the Obligations, the tax - exempt status of the Obligations, the repayment of the Obligations or any other matter related to the Obligations. Section 2. All actions heretofore taken by the officers, employees and agents of the City with respect to the approval of the issuance of the Obligations are hereby approved, confirmed and ratified, and the officers and employees of the City and their authorized deputies and agents are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all certificates and documents which they or bond counsel may deem necessary or advisable in order to consummate the issuance of the Obligations and otherwise to effectuate the purposes of this Resolution. Section 3. The adoption of this Resolution shall not obligate the City or any department thereof to (a) provide any financing for the Facilities; (b) approve any application or request for or take any other action in connection with any planning approval, permit or 2 75A -8 other action necessary for the acquisition, construction, rehabilitation or operation of the Facilities; or (c) make any contribution or advance any funds whatsoever to the Authority. Section 4. This Resolution shall take effect from and after its adoption. ADOPTED this _ day of January, 2017. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho City Attorgey Ryan C Assista 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. 2017- to be the original resolution adopted by the City Council of the City of Santa Ana on January , 2017. Date: Clerk of Council City of Santa Ana 75A -9 75A -10