Agenda Item: 2
CITY OF SANTA CLARITA
AGENDA REPORT
PUBLIC HEARINGS
CITY MANAGER APPROVAL:
DATE: August 26, 2025
SUBJECT: THE MASTER'S UNIVERSITY AND SEMINARY TAX EQUITY
AND FISCAL RESPONSIBILITY ACT (TEFRA) HEARING
DEPARTMENT: City Manager's Office
PRESENTER: Michael Villegas
RECOMMENDED ACTION
City Council conduct a public hearing and adopt a Tax Equity and Financial Responsibility Act resolution approving the issuance of tax-exempt obligations by the California Municipal Finance Authority in an aggregate amount not to exceed $65 million.
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 by assisting 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. To date, over 350 municipalities, including the City of Santa Clarita (City), have become members of CMFA.
The City received a request from CMFA and The Master’s University and Seminary (TMU) to conduct a public hearing under, and in accordance with, Section 147(f) of the Internal Revenue Code, in order for CMFA to issue tax-exempt revenue bonds (Bonds) in an aggregate principal amount not to exceed $65 million for TMU, a nonprofit religious corporation duly organized and existing under the laws of the State of California and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986.
The Master’s University and Seminary has requested that the CMFA participate in the issuance of one or more series of revenue bonds in an aggregate principal amount not to exceed $65 million to be applied as follows: (i)(a) approximately $21 million to refinance the costs to purchase and modestly improve certain single-family residential properties located within the 21600 block of Cleardale Street, between 24806 and 24864 of Meadview Avenue, within the
21700 block of Oak Orchard Road, within the 21300 and 21600 blocks of Placerita Canyon Road, and between 21900 and 22040 of Placerita Canyon Road, between 21705 and 21759, and 21804 and 21926 of Placeritos Boulevard, and within the 24700 block of Quigley Canyon Road, all of which were previously acquired for temporary housing of TMU students, (b) approximately $7.2 million to refinance the costs to purchase, improve and equip an apartment complex located at 22710 8th Street, and (c) approximately $10 million to finance the acquisition, improvement, and equipping of one or more apartment complexes located within one-half mile of the 22710 8th Street complex all located within the territorial limits of the City; (ii) approximately $13 million to finance or refinance the acquisition, construction, improvement, renovation, and equipping of certain educational facilities and amenities including capital improvements and expenditures to academic, student support, and related facilities on the TMU main campus generally located at 21726 Placerita Canyon Road, Santa Clarita, California (collectively the “Projects”); (iii) to finance capitalized interest on the Bonds; and (iv) to pay costs of issuance with respect to the Bonds.
The aforementioned residential properties and apartment complexes are expected to be used as campus housing for faculty, staff, and temporary student housing primarily for upperclassmen enrolled at TMU. Proceeds of the Bonds will not be used to acquire additional single-family residential housing within the Placerita Canyon area of the City. The facilities so financed and refinanced, consisting of the Projects, will be used for exempt educational purposes of TMU, and will be owned and operated by, and used by, TMU or a related subsidiary. The Projects will be used in a manner consistent with the current TMU Master Plan and any amendment to such plan that is approved by the City.
The Bonds would be tax-exempt private activity bonds for purposes of the Internal Revenue Code and, as such, require the approval of the elected body of the governmental entity having jurisdiction over the area where the Project to be financed is located. The approval and adoption of the resolution authorizing the issuance of the Bonds will not require the City to be financially obligated, liable, or provide any financing. The City’s credit and bond ratings are not at risk by adopting this resolution and no City revenues are at risk by this bond issuance.
In order for the CMFA to issue Bonds, the City must conduct a public hearing, allowing members of the public to comment on the proposed Project and the Bonds, and approve the CMFA’s issuance of Bonds on behalf of the proposed financing. Although CMFA, not the City, will be the issuer of the Bonds for the Project, the financing cannot proceed without the City, as the governmental entity having jurisdiction over the site, approving the Bonds.
The Master’s University and Seminary selected CMFA as the financing agency. As a result of TMU selecting CMFA, the City will receive a one-time issuance fee paid by the CMFA.
Participation by the City will not impact its appropriations limits or constitute any type of indebtedness. Specifically, approval and adoption of the resolution authorizing the issuance of the Bonds will not require the City to be financially obligated, liable, or provide any financing for any of the cost mentioned above. In addition, the City's credit, bond ratings, and revenues are not at risk whatsoever by adopting this resolution or bond issuance.
Once the City holds the required public hearing and adopts the required resolution following the public hearing, no other participation by the City will be required in any capacity.
Approval pursuant to this resolution does not constitute any other approval by any commission or agency of the City with respect to any other City regulatory or other requirements, such as planning approval, permit or other action necessary, in connection with the Project.
ALTERNATIVE ACTION
1. City Council not agree to approve the issuance of bonds by CMFA for TMU.
2. Other action as determined by City Council.
FISCAL IMPACT
The City will receive 25 percent of a one-time issuance fee from the California Municipal Finance Authority, which will equate to approximately $13,000 and will be deposited to General Fund miscellaneous revenues (100-462101). The actual amount may vary and will be dependent on the actual closing of the bonds.
ATTACHMENTS
Public Hearing Notice
Resolution