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PUBLIC HEARING
City of San Bernardino
Request for Council Action
Date: January 15, 2025
To: Honorable Mayor and City Council Members
From: Rochelle Clayton, Acting City Manager;
Gabriel Elliott, Director of Community Development and Housing Department: Community Development & Housing
Subject: Resolution Approving the Issuance of Revenue
Obligations by the California Enterprise Development
Authority through Benevolence Industries Inc., a Federally qualified Health Center Agency within San Bernardino City Limits
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino (“City”) adopt Resolution No. 2025-001 approving the issuance of revenue obligations by the California Enterprise Development Authority (“Authority”) following a public hearing in accordance with the requirements of the Federal Tax Equity and Fiscal Responsibility Act (“TEFRA”) to conduct such a hearing under the authority of the local jurisdiction, and Internal Revenue Code of 1986 as amended (“Code”).
Executive Summary
Benevolence Industries Incorporated (“Borrower”) has requested the Authority facilitate the issuance of revenue obligations (“Obligations”) in an aggregate principal amount not to exceed thirty-seven million dollars ($37,000,000), the proceeds of which are to be loaned to the Borrower for the purpose of (a) financing and/or refinancing the cost of acquisition, construction, renovation, equipping, and furnishing of certain healthcare and ancillary facilities located at various locations; (b) fund a debt service reserve fund, working capital, and capitalized interest with respect to the Obligations; and (c) pay certain costs of issuance and other related costs in connection with the issuance of the Obligations.
Obligations in an aggregate principal amount not to exceed nine million five hundred thousand dollars ($9,500,000) will specifically be used to finance and/or refinance the cost of acquisition, construction, renovation, equipping, and furnishing of certain healthcare and ancillary facilities located at 505-515 North Arrowhead Avenue, San 2 4
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Bernardino, California 92401 (consisting of approximately 58,160 square feet) (“San Bernardino Facility”).
Background
Federal tax law requires the proposed financing be approved by a governmental entity having jurisdiction over the area in which the facility to be financed is located. This requirement is satisfied if the governmental entity: (a) holds a duly noticed public hearing; and (b) at the conclusion of the public hearing, adopts a resolution approving the financing to be undertaken.
The “Authority” is a joint exercise of powers authority (“JPA”) 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 (including to finance and refinance facilities owned and/or leased by organizations described in Section 501(c)(3) of the Code).
The Borrower is a Federally qualified health center offering patient clinical care, patient safety, and education. Since 2005, the Borrower has provided health care and educational programs to the under-served and uninsured in Southern California. The Borrower’s goal is to be a beacon of hope for minorities and economically disadvantaged communities providing community access to medical, dental, and mental health clinics (including adult day health care centers, case management, youth programs, and human immunodeficiency virus/acquired immunodeficiency syndrome prevention and treatment). The Borrower is an organization described in Section 501(c)(3) of the Code and operates the San Bernardino Facility in connection with its mission of providing quality health care and excellent educational programs to the under-served and uninsured in Southern California.
The City has jurisdiction of the Borrower’s San Bernardino Facility.
Discussion
The purpose of the TEFRA hearing is to receive public comment and request approval of the financing as required by the Code. The City Clerk has properly noticed this public hearing and legal counsel has assisted in the preparation of the attached Resolution for approval.
Before the Bonds can be issued as tax-exempt obligations, the City must conduct a public hearing and approve the issuance of the Obligations.
Approval by the Mayor and City Council is to support financing for the San Bernardino Facility.
Financing Plan
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The Authority will act as issuer and perform all of the necessary legal and administrative responsibilities associated with the refinancing evidenced by the Obligations. The Obligations are special limited obligations of the Authority payable solely through the repayment of the loans from the Authority to the Borrower, which repayment by the Borrower is used to pay the principal of and interest on the Obligations. The Obligations issued by the Authority are not an obligation of the City or any member of the Authority. Neither the faith and credit nor the taxing power of the City or State of California (or any other political corporation, subdivision, or agency of the State) is pledged to the payment of the principal of, premium (if any), or interest on the Obligations; nor shall the City or State (or any other political corporation, subdivision, or agency of the State) be liable or obligated to pay the principal of, premium (if any), or interest on the Obligations.
2021-2025 Strategic Targets and Goals
Adopting the Resolution for approval of the issuance by the Authority of tax-exempt revenue bonds, to support the acquisition, construction, renovation, equipping and furnishing of the San Bernardino Facility to be used as a health clinic aligns with Mayor and City Council, Key Target No.: 4 Improved Quality of Life by providing quality healthcare to the community.
Fiscal Impact
There is no fiscal impact to the City for conducting the TEFRA public hearing and adopting a Resolution for the issuance of the tax-exempt Bonds by the authority.
Conclusion
It is recommended that the Mayor and City Council of San Bernardino, California adopt a Resolution approving the issuance of revenue obligations by the Authority following a public hearing in accordance with the requirements of TEFRA and the Code.
Attachments
Attachment 1 - Authorizing Resolution No. 2025-001 - Benevolence Health Centers BHC 2024 TEFRA Resolution (San Bernardino) Attachment 2 – Proof of Public Notice
Ward:
Ward 1
Synopsis of Previous Council Actions:
There are no previous City Council TEFRA actions pertaining to this property.