Agenda Item #16.2
For Council Meeting of: April 16, 2024
CITY OF SANTA ROSA
CITY COUNCIL
TO: MAYOR AND CITY COUNCIL
FROM: MEGAN BASINGER, DIRECTOR, HOUSING AND COMMUNITY SERVICES
HOUSING AND COMMUNITY SERVICES
SUBJECT: TEFRA PUBLIC HEARING AND ISSUANCE OF REVENUE BONDS BY THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $20 MILLION FOR VIGIL LIGHT SENIOR APARTMENTS – 1945 LONG DRIVE AGENDA ACTION: RESOLUTION
RECOMMENDATION
It is recommended by the Housing and Community Services Department that the Council: 1) conduct a public hearing under the requirements of the Tax Equity and Fiscal Responsibility Act and the Internal Revenue Code of 1986, as amended; and 2) by resolution, approve the issuance of tax exempt multifamily housing revenue bonds by the California Municipal Finance Authority in an aggregate principal amount not to exceed $20 million to finance and refinance the acquisition, rehabilitation, development, and equipping of Vigil Light Senior Apartments, 1945 Long Drive within the City of Santa Rosa.
EXECUTIVE SUMMARY
Vigil Light Senior Apartments L.P., a California limited liability partnership (“Borrower”), has selected the California Municipal Finance Authority (“CMFA”), a joint-powers authority of which the City is a member, to be the issuer of multifamily housing revenue bonds for Vigil Light Senior Apartments, 49 rental units, located at 1945 Long Drive (“Project”), in an aggregate principal amount not to exceed $20 million to finance and refinance the acquisition, rehabilitation, development, and equipping of the Project, and has requested that the City Council conduct a public hearing in accordance with the Tax Equity and Fiscal Responsibility Act (“TEFRA”) and Internal Revenue Code of 1986, as amended. A public hearing is required to provide a reasonable opportunity for interested individuals to express their views, orally or in writing, on the proposed issue of bonds and the location and nature of the proposed project to be financed. All financial obligations of the bond issuance are the responsibility of the Borrower, including without limitation the obligation to repay the Bonds and the obligations to acquire, rehabilitate and operate the Project.
BACKGROUND
Vigil Light Senior Apartments is an existing 49-unit affordable rental development consisting of very low-income units for households with incomes up to 50% of Area Median Income. One unrestricted unit is reserved for the resident manager. The Project is located at 1945 Long Drive, Santa Rosa, CA 95405, APN 181-190-001 and 181-220-046 (Attachment 1).
The rehabilitation of the units in this Project is exempt from environmental review pursuant to the California Environmental Quality Act (“CEQA”) Government Code Section 15301.
The Project completed an Environmental Review and is categorically excluded subject to Section 58.5 of the National Environmental Policy Act of 1969 (“NEPA”).
The Borrower selected CMFA to issue the bonds and requested that the City Council conduct a TEFRA public hearing. CMFA is a joint powers agency that promotes economic, cultural and community development, through the financing of economic development and charitable activities, including the issuance of taxable and tax-exempt bonds aimed at improving the standard of living throughout California. The bond proceeds in the aggregate principal amount of $20,000,000 will be used to finance or refinance the acquisition, rehabilitation, development, and equipping of the Project. The City Council approved joining CMFA as an additional member on January 1, 2004.
PRIOR CITY COUNCIL REVIEW
Not applicable.
ANALYSIS
The issuance of tax exempt, private activity bonds must be approved by the jurisdiction the project is located following a public hearing in accordance with Internal Revenue Code requirements. A TEFRA public hearing provides a reasonable opportunity for interested individuals to express their views, orally or in writing, on the proposed issuance of bonds and the location and nature of the proposed project to be financed.
Pursuant to Section 147(f) of the Code and 26 Code of Federal Regulations Section 1.147(f)-1, a project must obtain bond financing within one year of public approval.
Without the approval or the TEFRA public hearing, the project cannot be financed with tax-exempt bonds.
FISCAL IMPACT
Approval of this action does not have a fiscal impact on the General Fund. The bonds and the obligation to pay principal and interest and any redemption premium will not constitute indebtedness or an obligation of the City. The City will not have any obligation to repay the bonds or to acquire, rehabilitate, develop, equip or operate the Project.
Financing documents with respect to the issuance of the bonds will contain clear disclaimers that the bonds are not obligations of the City but are to be paid for solely from funds provided by the Borrower. All financial obligations for the bonds and all fees and costs associated with the bonds will be the sole responsibility of the Borrower.
ENVIRONMENTAL IMPACT
The project has been reviewed in compliance with the California Environmental Quality Act (CEQA) and the rehabilitation of the units in this Project is exempt from environmental review pursuant to CEQA Guidelines Section 15301.
The Project completed an Environmental Review and is categorically excluded subject to Section 58.5 of the National Environmental Policy Act of 1969 (“NEPA”).
BOARD/COMMISSION/COMMITTEE REVIEW AND RECOMMENDATIONS
Not applicable.
NOTIFICATION
A public hearing notice was published in the Press Democrat on April 5, 2024.
ATTACHMENTS
Attachment 1 – Locational Graphic
Attachment 2 – Request Letter for the TEFRA public hearing Resolution
PRESENTER
Angela Morgan, [email protected]
TEFRA PUBLIC HEARING AND ISSUANCE OF REVENUE BONDS BY THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $20 MILLION FOR VIGIL LIGHT SENIOR APATMENTS – 1945 LONG DRIVE PAGE 3 OF 3