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Time Set # 26.
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| Board of Supervisors |
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| Subject |
| Hold a public hearing under the requirements of the Tax Equity and Fiscal Responsibility Act and adopt a resolution approving California Municipal Finance Authority Bond Issuance. (No general fund impact) (Nunes) (Note: Members of the community may attend the meeting in person only so they can access Zoom for this item) |
| Recommended Action |
- Conduct a public hearing under the requirements of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the Internal Revenue Code of 1986, as amended (the "Code"); and
- Adopt resolution approving the issuance of the Bonds by the California Municipal Finance Authority for the benefit of CHF-Davis II, L.L.C., to provide for the financing of a student housing facility project, such adoption is solely for the purposes of satisfying the requirements of TEFRA, the Code and the California Government Code Section 6500 (and following).
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| Strategic Plan Goal(s) |
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Thriving Residents |
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| Reason for Recommended Action/Background |
CHF-Davis II, L.L.C., a limited liability company (the “Borrower”) whose sole member is Collegiate Housing Foundation, a non-profit corporation organized and existing under the laws of the State of Alabama, requested that the California Municipal Finance Authority (CMFA) serve as the municipal issuer of Bonds in an aggregate principal amount not to exceed $333,000,000. The proceeds of the Bonds will be used for the construction, improvement and equipping of an approximately 613-unit student housing facility and other related and appurtenant facilities, including but not limited to two community centers, a maintenance building, and associated service and support spaces (together, the “Project”). The Project is intended to provide housing for students attending the University of California at Davis. The Project site is located on an approximately 19-acre project site in the University’s Orchard Park neighborhood. The site is bounded by Highway 113 to the west, Russell Boulevard to the north, Orchard Park Drive to the east and Orchard Park Circle to the south and also includes a small parcel on the west side of Highway 113.
In order for all or a portion of the Bonds to qualify as tax-exempt Bonds, the County of Yolo must conduct a Tax Equity and Fiscal Responsibility Act (TEFRA) public hearing 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 the Project. Prior to such TEFRA Hearing, reasonable notice must be provided to the members of the community. Following the close of the TEFRA Hearing, an applicable elected representative of the governmental unit hosting the Project must provide its approval of the issuance of the Bonds for the financing of the Project.
California Municipal Finance Authority
The California Municipal Finance Authority (CMFA) was created on January 1, 2004 pursuant to a joint exercise of powers agreement to promote economic, cultural and community development, through the financing of economic development and charitable activities throughout California. To date, over 300 municipalities, including the County of Yolo, have become members of CMFA.
The 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 financing.
The Joint Exercise of Powers Agreement provides that the CMFA is a public entity, separate and apart from each member executing such agreement. The debts, liabilities and Bonds of the CMFA do not constitute debts, liabilities or Bonds of the members executing such agreement.
The Bonds to be issued by the CMFA for the Project will be the sole responsibility of the Borrower, and the County will have no financial, legal, 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 Bonds of the County or the State of California but are to be paid for solely from funds provided by the Borrower.
Participation by the County in the CMFA will not impact the County's appropriations limits and will not constitute any type of indebtedness by the County. Outside of holding the TEFRA hearing, adopting the required resolution, no other participation or activity of the County or the County Supervisors with respect to the issuance of the Bonds will be required.
Financial Considerations
There is no direct or indirect financial impact to the County of Yolo as a result of this proposed financing. The Authority will issue tax-exempt bonds on behalf of the Project. The tax-exempt bonds are payable solely out of the revenues derived by the Borrower form the applicable project. No financial obligations are placed on the County for project financing costs or debt repayment.
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 County of Yolo, it is expected that 25% of the issuance fee will be granted by the CMFA to the general fund of the County. Such grant may be used for any lawful purpose of the County. The Borrower will be the beneficiary of the CMFA's charitable donation through a 25% reduction in issuance fees.
In light of the foregoing, and in order to support student housing, staff recommends that the County conduct the TEFRA Hearing and adopt the resolution in favor of the issuance of the Bonds by the CMFA. |
| Collaborations (including Board advisory groups and external partner agencies) |
| California Municipal Finance Authority, UC Davis, CHF-Davis I, L.L.C |
| Competitive Bid Process |
| N/A |
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| Fiscal Impact |
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| Source of Funds for this Expenditure |
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