FOR THE COUNCIL MEETING OF DECEMBER 17, 2024
COUNCIL AGENDA REPORT
TO: City Council
FROM: City Manager David W. Rowlands
BY: Interim Finance Director Xenia Bradford
SUBJECT: Tax And Equity Fiscal Responsibility Act ( TEFRA) Regarding Centennial Gardens Apartments
Description:
The City Council
1. Conduct a public hearing under the requirements of the Tax and Equity Fiscal Responsibility Act (TEFRA) and the Internal Revenue Code of 1986, as amended; and
2. Consider approving a Resolution for the issuance of Revenue Bonds by the California Statewide Communities Development Authority to provide financing for the acquisition, construction, and development of a multifamily rental housing project generally known as Centennial Gardens Apartments.
Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
RECOMMENDATION:
Adopt a Resolution of the City Council of the City of Santa Maria, California, approving the issuance of exempt facility bonds by the California Statewide Communities Development Authority to provide financing for the acquisition, construction , and development of a 160 -unit multifamily rental housing project generally known as Centennial Gardens Apartments.
BACKGROUND:
Centennial Gardens, LP (the “Borrower”) has requested that the California Statewide Communities Development Authority (“CSCD A”) serve as the municipal issuer of tax - exempt multifamily housing revenue bonds in an aggregate principal amount not to exceed $50,000,000 (the “Bonds”), of which:
(a) the proceeds of the Bonds will be used for the purpose of making a loan to the Borrower, to enable the Borrower to finance the acquisition, construction , and development of a multi-family housing rental project located at South Depot Street and West Battles Road (800-890 West Battles Road), Santa Maria, California (the “Project”), which will be owned by the Borrower.
2 DISCUSSION:
In order for all or a portion of the Bonds to qualify as tax-exempt bonds, the City of Santa Maria (“City”) must conduct a public hearing (the “TEFRA Hearing”) providing 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. Adoption of the Resolution is solely for the purposes of satisfying the requirements of the Tax Equity and Fiscal Responsibility Act (TEFRA), the Internal Revenue Code, and the California Government Code Section 6500 (and the subsequent code sections ). 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 elect ed representative” of the governmental unit hosting the Project must provide its approval of the issuance of the Bonds for the financing of the Project. A public notice was published on December 6, 2024 (Attachment A).
California Statewide Communities Development Authority (CSCDA) The California Statewide Communities Development Authority (CSCDA) is a joint powers authority founded and sponsored by the League of California Cities ("League") and the California State Association of Counties ("CSAC"). The CSCDA was created by the League and CSAC in 1988 to enable local government and eligible private entities access to low -cost, tax -exempt financing for projects that provide a tangible public benefit, contribute to social and economic growth , and improve the overall quality of life in local communities throughout California. The CSCDA is comprised of more than 530 members, including the City of Santa Maria. The CSCDA has issued more than $65 billion through 1,600 plus financings since 1988 and consistently ranks in the top 10 of more than 3,000 nationwide public issuers of tax-exempt debt, as measured by annual issuance amount.
Alternatives
The City Council may decide not to approve the issuance of the Bonds, and the valuable, scarce, affordable housing bond allocation awarded by the State (through CSCDA) would be lost and the project would not move forward.
Fiscal Considerations:
There is no fiscal impact to the City. The Bonds will be issued as limited obligations of the CSCDA, payable solely from reven ues and receipts derived from a loan to be made by the CSCDA to the Borrower with the Bond proceeds. The City bears no liability with respect to the issuance of the Bonds. Further, the City is not a party to any of the financing documents related to the B ond issuance and is not named in any of the disclosure documents describing the Bonds or the proposed financing.
Impact to the Community:
Approving the issuance of the multi-family housing revenue bonds benefits the community by creating new affordable housing and providing a safe, healthy environment for the City’s residents.