ADMINISTRATIVE REPORT
MEETING DATE: February 12, 2025 AGENDA CATEGORY: Consent Calendar Public Hearings TO: Honorable Mayor and City Council
FROM: Jennifer M. Byers, Economic and Community Development Director DATE: January 27, 2025
SUBJECT: Tax Equity and Fiscal Responsibility Act Hearing on Behalf of the Housing Authority of the County of Kern (Ward 3).
1. Conduct a public hearing as required by Section 147(f) of the Internal Revenue Code of 1986 to receive comments relating to the plan of finance for the issuance by the Housing Authority of Kern of Multifamily Housing Revenue Bonds in an amount not to exceed $12,000,000 of the Authority’s Revenue Bonds (Bonds) for the purpose of financing rental housing projects.
2. Adopt Resolution approving the plan of finance for the issuance by the Housing Authority of Kern of Multifamily Housing Revenue Bonds in an amount not to exceed $12,000,000 for the construction of a 51-unit affordable housing complex located on APN: 132-010-29 in Bakersfield California and certain other matters relating thereto.
3. Indemnification Agreement between the City of Bakersfield (City) and the Housing Authority of the County of Kern.
RECOMMENDATION:
Staff recommends Council conduct a public hearing, adopt the resolution and approve the Indemnification Agreement.
BACKGROUND:
The City of Bakersfield received a request from the Housing Authority of the County of Kern (Housing Authority) to conduct a public hearing, as required by the Internal Revenue Code, in order to issue, pursuant to a plan of finance, of one or more series of its tax-exempt bonds, notes, or other evidence of indebtedness in an amount not to exceed $12,000,0000 (the “Bonds”) 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”), the proceeds of which will be used to make a loan to a to-be-formed limited partnership with Golden Empire Affordable Housing, Inc to facilitate the construction, installation and equipping of 51 unit affordable rental housing known as Niles Street Apartments, to be located on APN:
132-010-29, a site on the north side of Niles Street approximately 800 feet east of Valencia Drive within the City of Bakersfield, California (the “Project”).
The Bonds will be tax-exempt private activity bonds for the purposes of the Internal Revenue Code and, as such, require the approval of the elected body of the governmental entity having jurisdiction over the location where the project to be financed is located. The City will not be under any obligation to repay the Bonds.
In order for the Housing Authority to issue the Bonds, the City must conduct a public hearing allowing members of the public to comment on the proposed Project, and approve the Housing Authority’s
issuance of the Bonds. Although the Housing Authority (not the City) will be the issuer of the Bonds for the Project, the financing cannot proceed without the City approving the issuance of the Bonds.
The Housing Authority will issue the Bonds for the benefit of the Project. No financial obligations are placed on the City for the costs of the Project or the repayment of the Bonds.
There is no direct or indirect financial impact to the City of Bakersfield as a result of this proposed financing. The Bonds are payable solely out of the revenues derived by the Borrower from the Project.
FISCAL IMPACT:
No Fiscal Impact
COUNCIL GOAL:
Safety and Resilience
ATTACHMENTS:
1. Resolution
2. Indemnification Agreement