Agenda Item #16.1
For Council Meeting of: September 29, 2026
CITY OF SANTA ROSA
CITY COUNCIL
TO: MAYOR AND CITY COUNCIL
FROM: MEGAN BASINGER, DIRECTOR
HOUSING AND COMMUNITY SERVICES
SUBJECT: TEFRA PUBLIC HEARING AND REISSUANCE OF TAX-EXEMPT 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
The Housing and Community Services Department recommends that the Council: 1) conduct a public hearing pursuant to Section 147(f) of the Internal Revenue Code of 1986 regarding the proposed issuance of tax-exempt revenue bonds by the California Municipal Finance Authority; and 2) adopt a resolution approving the issuance of the 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, located at 1945 Long Drive. The bonds will be payable solely from revenues and assets provided by the Borrower and will not constitute an indebtedness or obligation of the City. This item has no impact on the current fiscal year budget or the General Fund.
EXECUTIVE SUMMARY
PH Development Group, formerly known as PEP Housing (Sponsor), on behalf of Vigil Light Senior Apartments, L.P. (Borrower), has requested that the California Municipal Finance Authority (CMFA) issue tax-exempt revenue bonds in an aggregate principal amount not to exceed $20 million for Vigil Light Senior Apartments, an existing 49-unit affordable senior rental development located at 1945 Long Drive (Project). Bond proceeds would be used to finance and refinance the acquisition, rehabilitation, development, and equipping of the Project.
The Tax Equity and Fiscal Responsibility Act (TEFRA) established the public approval process now codified in Section 147(f) of the Internal Revenue Code, which requires approval by an applicable elected representative of the governmental unit in which the Project is located, following a public hearing that provides interested persons a reasonable opportunity to comment on the proposed financing and the location and nature of the Project. The City will have no responsibility for repayment of the bonds or any other financial obligation associated with the financing.
GOAL
This item relates to Council Goal #5 - Plan for and Encourage Housing for All and Reduce Homelessness by expanding access to housing opportunities for very low-income households.
BACKGROUND/PRIOR COUNCIL REVIEW
The Project is an existing 49-unit affordable senior rental development consisting of 48 units restricted to very low-income households earning up to 50% of area median income and one unrestricted manager’s unit. The Project is located at 1945 Long Drive, Santa Rosa, CA 95405, APN 181-190-001 and 181-220-046 (Attachment 1).
On April 16, 2024, the Council adopted Resolution No. RES-2024-059 following a public hearing and approved the proposed issuance of tax-exempt revenue bonds by CMFA in an aggregate principal amount not to exceed $20 million for the Project. Under Section 147(f) of the Internal Revenue Code and the applicable Treasury Regulations, public approval of a bond issue is timely only if it occurs within one year before the issue date. Because the bonds were not issued within one year after the Council’s approval, the prior approval is no longer effective for purposes of Section 147(f). CMFA has therefore requested that the Council conduct a new public hearing and provide renewed approval of the proposed bond issuance.
Delays beyond the Sponsor’s control prevented the bonds from being issued within one year after the Council’s prior approval.
ANALYSIS
CMFA is a joint powers authority of which the City is a member. The Borrower has requested that CMFA serve as the conduit issuer of tax-exempt revenue bonds for the Project. The City will not issue the bonds, loan or pledge City funds, or assume responsibility for repayment.
Section 147(f) of the Internal Revenue Code requires approval of the bond issuance by the applicable elected representative of the governmental unit in which the financed facility is located. Before providing that approval, the Council must conduct a public hearing that affords interested persons a reasonable opportunity to express their views regarding the proposed financing and the location and nature of the Project.
The Council previously provided the required approval on April 16, 2024. Because the bonds were not issued within one year after that approval, CMFA has requested that the Council conduct a new public hearing and renew its approval of the proposed issuance. Without renewed approval, the proposed bonds cannot satisfy the public-approval requirement applicable to tax-exempt private activity 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 Council’s action is limited to conducting the federally required public hearing and approving CMFA’s issuance of conduit revenue bonds. The action does not approve the rehabilitation or development of the property, grant any land use entitlement or construction permit, commit City funds or resources to the Project, or limit the City’s discretion regarding any future approval.
Pursuant to CEQA Guidelines Section 15378(b)(5), the recommended action is not a project subject to CEQA because it is an administrative action that will not result in a direct or reasonably foreseeable indirect physical change in the environment. In the alternative, the action is exempt pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that the City’s limited approval of conduit financing will not have a significant effect on the environment. Any future discretionary City approval associated with physical rehabilitation or development of the property will be subject to CEQA review as applicable.
BOARD/COMMISSION/COMMITTEE REVIEW AND RECOMMENDATIONS
Not applicable.
NOTIFICATION
A public hearing notice was published in the Press Democrat on September 18, 2026.
ATTACHMENTS
Attachment 1 – Location Map
Attachment 2 – Request Letter for the TEFRA public hearing Resolution
PRESENTER
Angela Morgan, Program Specialist II
TEFRA PUBLIC HEARING AND REISSUANCE OF TAX-EXEMPT 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 PAGE 3 OF 3