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HEARING - Planning and Building Department, Economic Development and Administration, Affordable Housing Unit, recommending the Board:
1) Conduct a public hearing under the requirements of the Tax and Equity Fiscal Responsibility Act (“TEFRA”) in connection with the proposed issuance of one (1) or more series of tax-exempt and/or taxable revenue bonds by the California Municipal Finance Authority (“CMFA”), a joint exercise of powers authority and public entity of the State of California, in an amount not-to-exceed $35,000,000, to refinance the acquisition, construction, improvement and equipping of El Dorado Senior Village Apartments I, a senior multifamily rental housing project to be located at 6464 Koki Lane, within the County of El Dorado;
2) Adopt and authorize the Chair to sign Resolution 179-2024 approving the issuance of the Bonds by the CMFA for the benefit of Kingdom Development, Inc. (“Developer”), to provide for the financing of the 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); and
3) Direct the funds received from the CMFA, related to the issuance of the bonds, be deposited in the Affordable Housing Trust Fund special revenue fund.
(District 3)
FUNDING: California Municipal Finance Authority.
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DISCUSSION / BACKGROUND
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 200 municipalities, including El Dorado County (“County”), 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 financings.
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 senior multifamily housing facility located at 6464 Koki Lane in El Dorado (“Project”) will be the sole responsibility of Kingdom Development, Inc. (“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.
The Borrower requested that the CMFA serve as the municipal issuer of the Bonds in an aggregate principal amount not to exceed $35,000,000 (“Bonds”) of tax-exempt revenue bonds. The proceeds of the Bonds will be used to: (1) finance or refinance the acquisition, construction, improvement and equipping of El Dorado Senior Village Apartments I, a senior multifamily rental housing project to be located at 6464 Koki Lane, El Dorado, California; and (2) pay certain expenses incurred in connection with the issuance of the Bonds.
In order for all or a portion of the Bonds to qualify as tax-exempt bonds, the County of El Dorado must conduct a public hearing (“TEFRA Hearing”) providing for the 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. It is recommended by staff that the Board conduct the TEFRA Hearing and adopt the Resolution in favor of the issuance of Bonds to the Borrower by the CMFA.
ALTERNATIVES
The Board could not approve the issuance of bonds.
PRIOR BOARD ACTION:
On June 25, 2024, Legistar File 24-1023, the Board approve the TIF Offset for the Project.
On May 21, 2024, Legistar File 24-0873, the Board approved the submittal of the Permanent Local Housing Allocation Program Competitive Component grant application for the Project.
OTHER DEPARTMENT / AGENCY INVOLVEMENT
County Counsel
CAO RECOMMENDATION
Approve as recommended.
FINANCIAL IMPACT
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 obligations of the County or the State of California but are to be paid for solely from funds provided by the Borrower.
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 El Dorado, it is expected that a portion of issuance fees will be granted by the CMFA to the County, which can be used for any lawful purpose of the County. The CMFA anticipates the County will receive approximately $15,000 and the Planning and Building Department requests the funds be deposited into the Affordable Housing Trust Fund Special Revenue Fund.
CLERK OF THE BOARD FOLLOW UP ACTIONS
1) The Clerk of the Board will obtain the Chair’s signature on two (2) original copies of the Resolution; and
2) The Clerk of the Board will forward two (2) certified copies of the fully executed Resolution to Planning and Building Department, Jennifer Morris, Economic Development & Administration Unit.
STRATEGIC PLAN COMPONENT
N/A
CONTACT
Jennifer Morris, Sr. Administrative Analyst
Planning and Building Department