Title
HEARING - Planning and Building Department, Affordable Housing Unit, recommending the Board consider the following:
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 of 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 $12,000,000, to:
a) Finance or refinance the acquisition, construction, improvement, and equipping of Diamond Village Apartments II, a multifamily rental housing project to be located at 750 Black Rice Road, Placerville, El Dorado County, California; and
b) Pay certain expenses incurred in connection with the issuance of the Bonds.
2) Adopt and authorize the Chair to sign Resolution 054-2026 approving the issuance of the Bonds by the CMFA for the benefit of Diamond Village Apartments II, LP (Borrower), 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) Approve the deposit of the issuance fee paid to the County by CMFA to the Affordable Housing Trust Fund.
(District 3)
FUNDING: California Municipal Finance Authority.
Body
DISCUSSION / BACKGROUND
On August 14, 2018 (Legistar file 18-1133), the Board of Supervisors approved the Diamond Village Apartments Phase I(Phase I), PD 17-0002. Phase I includes 81 one-, two-, and three-bedroom apartments, 48 very-low-income, 32 low-income, and one moderate-income unit reserved for an on-site property manager. Phase I and the off-site road improvements have been completed.
On January 9, 2025 (Legistar file 25-0006), the Planning Commission approved DR24-0008/Diamond Springs Village Apartments - Phase II, an affordable housing development under Senate Bill 35 (SB 35) consisting of four (4) multi-unit residential apartments with a total of 31 units (including one [1] manager's unit) and an office/community room. The project includes one-, two-, and three-bedroom apartments and is income-restricted to households earning 80% or less of the Area Median Income (AMI). Phase II permits have been submitted for plan check review.
The California Municipal Finance Authority (CMFA), established on January 1, 2004, through a Joint Exercise of Powers Agreement (JPA), promotes economic, cultural, and community development across California by financing economic and charitable projects. In October 2014 (Legistar file 14-1369), the Board of Supervisors approved El Dorado County's participation in the JPA (Attachment D). CMFA works with more than 350 local governments, nonprofits, and businesses to issue taxable and tax-exempt bonds that improve the quality of life in the state. Its Board of Directors and representatives bring extensive experience in bond financing to support these efforts.
The Borrower requested and met the CMFA requirements to serve as the municipal issuer of the Bonds in an aggregate principal amount not to exceed $12,000,000 of tax-exempt revenue bonds for Phase II of the Project. The proceeds of the Bonds will be used to: (1) finance or refinance the acquisition, construction, improvement, and equipping of Diamond Village Apartments II, a multifamily rental housing project to be located at 750 Black Rice Road, Placerville, California; and (2) pay certain expenses incurred in connection with the issuance of the Bonds. There is no financial involvement or risk by the County in the issuance of the bonds. The bonds are issued by CMFA for the benefit of the borrower, Diamond Village Apartments II, LP.
To qualify all of the Bonds as tax-exempt under Section 147(f) of the Internal Revenue Code, the County must hold a public TEFRA Hearing to allow community members to comment on the proposed financing. As required in the JPA Agreement, notice of the hearing must be provided in advance, and after it concludes, the governing body of the County must approve the issuance of the Bonds for the Project. Both the issuer (CMFA) and the host government must provide public approval, with the County Board of Supervisors (Board) serving as the host approval authority. If the Board adopts the Resolution, CMFA may issue the Bonds to finance the Project.
Once the bonds are issued, the County will receive a portion of the issuance fee ($6,000), which will be deposited into the Affordable Housing Trust Fund to be used for the purposes of financing studies or the development of a program for the provision of affordable housing in the County, and/or for the construction or other contribution toward creating housing in the County.
ALTERNATIVES
Under the California Municipal Finance Authority Joint Powers Agreement, the local governing body must approve the issuance of bonds. Without this approval, the project will not have the CMFA bonds issued.
PRIOR BOARD ACTION:
August 14, 2018 (Legistar file 18-1133), the Board approved the Diamond Village Phase I.
November 17, 2020 (Legistar file 20-1316), the Board approved a Traffic Impact Mitigation fee offset for Diamond Village Phase I.
January 9, 2025 (Legistar file 25-0006), the Planning Commission approved the Diamond Village Phase II.
OTHER DEPARTMENT / AGENCY INVOLVEMENT
County Counsel
CAO RECOMMENDATION
Adopt the resolution as recommended.
FINANCIAL IMPACT
There is no direct financial impact on the County. 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 the issuance fee attributable to the County, $6,000, will be granted by the CMFA. These funds will be deposited into the Planning and Building Department’s Affordable Housing Trust 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, Affordable Housing Unit, to the attention of Jennifer Morris, Sr. Administrative Analyst.
STRATEGIC PLAN COMPONENT
N/A
CONTACT
Jennifer Morris, Sr. Administrative Analyst
Planning and Building Department