COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Rebecca Campbell, Director of Finance
DATE: July 1, 2025
SUBJECT: Adoption of Resolution Approving Issuance of Revenue Bonds Under the Requirements of the Tax and Equity Fiscal Responsibility Act (TEFRA) Public Hearing Regarding Community Health Centers of the Central Coast
Description:
The City Council will consider adopting a Resolution approving the issuance of Revenue Bonds by the California Statewide Communities Development Authority to provide financing regarding the Community Health Centers of Central Coast, Inc. during the public hearing under the requirements of the Tax and Equity Fiscal Responsibility Act (TEFRA) and the Internal Revenue Code of 1986, as amended.
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 Approving the Issuance of Revenue Bonds by the California Municipal Finance Authority in an Aggregate Principal Amount Not to Exceed $47,000,000 for the Refinancing of Certain Outstanding Obligations and Financing of the Acquisition, Design, and Construction of Certain Real Property Located in the City of Santa Maria, to be Utilized by Community Health Centers of the Centr al Coast, Inc., and Certain Other Matters Relating Thereto.
BACKGROUND:
Community Health Centers of the Central Coast, Inc. (the “Borrower”) has requested that the California Statewide Communities Development Authority (“CSCDA”) serve as the municipal issuer of tax-exempt, revenue bonds in an aggregate principal amount not to exceed $47,000,000 (the “Bonds”).
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, const ruction, and development of a 55,000 square foot building being located at 2100 S. Blosser Road, Santa Maria, California, a portion of which building will be operated as a new PACE program facility providing health and mental health services to senior citi zens; renovation of the 2100 S.
Blosser Building ; and to acquire and renovate an approximately 30,000 square foot 2 building located at 1550 E. Main Street, Santa Maria, California for a medical clinic (the “1550 E. Main Street Building”), which will be owned and operated by the Corporation as a medical clinic (primary care, dental, specialists response, and potentially behavioral care services) (the “1550 E. Main Street Project”; and, together with the 2100 S. Blosser Project, the “Project”).
DISCUSSION:
Community Health Centers of the Central Coast, Inc., a California nonprofit public benefit corporation and an organization described in section 501(c)(3) of the Internal Revenue Code of 1986 (the “Corporation”), has requested that the Authority partic ipate in the issuance of revenue bonds in an aggregate principal amount not to exceed $47,000,000 (the “Bonds”), of which:
(a) Approximately $6,000,000 will be used to refinance a loan (the “Loan”) made by Mechanics Bank to the Corporation in 2021, the proceeds of which were used to finance the acquisition of a 55,000 square foot building being located at 2100 S.
Blosser Road, Santa Maria, California, a portion of which building will be operated as a new PACE program facility providing health and mental health services to senior citizens (the “2100 S. Blosser Building”);
(b) Approximately $14,000,000 will be used to renovate the 2100 S. Blosser Building (the “2100 S. Blosser Project”); and
(c) Approximately $16,000,000 will be used to acquire and renovate an approximately 30,000 square foot building located at 1550 E. Main Street, Santa Maria, California (the “1550 E. Main Street Building”), which will be owned and operated by the Corporation as a medical clinic (primary care, dental, specialists response, and potentially behavioral care services) (the “1550 E. Main Street Project”; and, together with the 2100 S. Blosser Project, the “Project”).
In order for all or a portion of the Bonds to qualify as tax-exempt Bonds, the City of Santa Maria must conduct a public hearing providing for 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. 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 elected representative” of the governmental unit hosting the Project must provide its approval of the issuance of the Bonds for the financing of the Project.
California Municipal Finance Authority (CMFA)
The 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 throughout California. To date, over 350 municipalities, including the City of Santa Maria, have become members of CMFA.
The CMFA was formed to assist local governments, non -profit organizations, and businesses with the issuance of taxable and tax -exempt Bonds aimed at improving the 3 standard of living in California. The CMFA’s representatives and its Board of Directors have considerable experience in bond financing.
The Bonds to be issued by the CMFA for the Project will be the sole responsibility of the Borrower, and the City wi ll 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 Bonds of the City or the State of California but are to be paid for solely from funds provided by the Borrower.
Participation by the City in the CMFA will not impact the City’s appropriations limits and will not constitute any type of i ndebtedness by the City. Outside of holding the TEFRA hearing, adopting the required resolution, no other participation or activity of the City or the City Council with respect to the issuance of the Bonds will be required.
FISCAL CONSIDERATIONS:
There is no direct or indirect financial impact to the City as a result of this proposed financing. The CMFA will issue tax -exempt bonds on behalf of the Project. The tax - exempt bonds are payable solely out of the revenues derived by the Borrower from the applicable project. No financial obligations are placed on the City for project financing costs or debt repayment.
The Board of Directors of the California Foundation for Stronger Communities, a California non-profit public benefit corporation (the “Foun dation”), 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 s upport of local charities. With respect to the City of Santa Maria, it is expected that a portion of the issuance fee attributable to the City (estimated to be approximately $11,000) will be granted by the CMFA to the General Fund of the City. Such grant may be used for any lawful purpose of the City.
IMPACT TO THE COMMUNITY:
Approving the issuance of the tax -exempt bonds benefits the community by reducing financing costs to acquire and renovate health care facilities which will allow the borrower to continue to providing quality health care services to the community.
ATTACHMENT(S)
A. Resolution
B. Public Notice Published June 20, 2025