HomeMy WebLinkAbout1999-02-23 - AGENDA REPORTS - TEFRA HEARING L M OPTICAL (2)AGENDA REPORT
City Manager Approv
Item to be presented by: Step Stark
PUBLIC HEARING
DATE: February 23, 1999
SUBJECT: TEFRA HEARING FOR L&M OPTICAL
RESOLUTION NO. 99-32, AUTHORIZING AND APPROVING
CALIFORNIA STATEWIDE COMMUNITY DEVELOPMENT
AUTHORITY (CSCDA) TO ISSUE INDUSTRIAL DEVELOPMENT
BONDS FOR AN AMOUNT NOT TO EXCEED $8,000,000
DEPARTMENT: Administrative Services
RECOMMENDED ACTION
City Council adopt Resolution No. 99-32, authorizing and approving the California
Statewide Community Development Authority (CSCDA) to issue Industrial Development
Bonds for an amount not to exceed $8,000,000, on behalf of L&M Optical Disc West, LLC.
BACKGROUND
CSCDA is a joint power authority sponsored by the League of California Cities and the
California State Association of Counties. Currently, over 173 cities and 47 counties are
members of CSCDA, including the City of Santa Clarita.
CSCDA has an Industrial Development Bond Program, which has issued over $330 million
of Industrial Development Bonds (IDB) for over 100 companies throughout the State.
Under this program, specific criteria must be met in order for a company to qualify for
issuance IDBS. This criteria includes:
• The company must be able to represent that as a result of the issuance of the IDBS, the
company will be able to create one new job for every $50,000 borrowed.
• Must process, manufacture, or produce a tangible product.
• Must be located in the State of California and be able to demonstrate the ability to
support the debt service payments with respect to the bonds.
RESOLUTION NO. 99-32
February 23, 1999 - Page 2
L&M Optical is a manufacturing company, which will furnish CD/DVD replication services
to the music, computer software development, film, and other industries. L&M Optical
would like to buy and renovate an existing facility in the Industrial Center. This
manufacturing facility is planned to be fully operational within six months of issuing bonds.
As a result of the bond issue, L&M Optical is projected to create 165 new jobs over a two-
year period. These jobs range from management positions to unskilled positions. They
expect to hire the workforce locally.
The City is holding a Tax Equity and Fiscal Responsibility Act (TEFRA) hearing for CSCDA
in order to satisfy the public hearing approval requirement of Section 147 (f) of the Internal
Revenue Code of 1986. This hearing is also required by CSCDA before they will issue
bonds in any jurisdiction. In essence, this hearing and the approval of the City Council are
required in order for CSCDA to issue bonds within the City's jurisdiction. At no time will
the City be at risk for the repayment of these bonds. The only participation required of the
City is holding the TEFRA hearing.
FISCAL IMPACT
There is no fiscal impact to the City. The City will not be involved with the issuance of
bonds or be at risk for repayment.
ALTERNATIVE ACTION
The City Council could chose not to adopt the Resolution, approving the issuance of bonds.
In this case, CSCDA would not issue the bonds.
ATTACHMENT
Resolution No. 99-32
SS:KS:hds
..w x.99-92
CITY OF SANTA CIARITA
NOTICE OF PUBLIC HEARING WITH RESPECT TO THE PROPOSED ISSUANCE
OF INDUSTRIAL DEVELOPMENT REVENUE BONDS IN THE AMOUNT NOT TO
EXCEED $8,000,000. CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY WILL BE TIE ISSUER OF THE BONDS
PUBLIC NOTICE IS HEREBY GIVEN:
The City of Santa Clarita, California (the "City"), will hold a public hearing with respect to the proposed
issuance of industrial development revenue bonds in an amount not to exceed $8,000,000 (the "Bach").
California Statewide Communities Development Authority will be the issuer of the Bonds. Proceeds of
the Bonds are to be loaned to IAM Optical Disc West, LLC or an affiliate, successor or assign thereof
(the "Borrower") pursuant to a Loan Agreement to finance the acquisition, construction, rehabilitation and
improvement of property, including real and personal property, to be used as, or as a part ot; a
manufacturing facility (the "Project") for the manufacturing of compact discs and digital video discs and
related products. The Project will be located at 24834 Avenue Rockefeller, Santa Clarita, California
91355, and will be owned by the Borrower.
The hearing will be held by the City Council of the City of Santa Clarita in the City Hall Council
Chambers, 23920 Valencia Boulevard, First Floor, Santa Clarita, California, 91355, on February 23,
1999, at 6:30 p.m.
The Bonds will he paid entirely from repayments by the Borrower under the Loan Agreement. Neither
the faith and credit nor any taxing power of the City, the Issuer, the State of California (the "State") or any
other political corporation, subdivision or agency of the State is pledged to the payment of the principal of
or premium, if any, or interest on the Bonds, nor shall the City, the State or any other political
corporation, subdivision or agency of the State be liable or obligated to pay the principal of or premium, if
any, or interest on the Bonds.
The public hearing is intended to comply with the public approval requirements of Section 147(f) of the
Internal Revenue Code of 1986.
Those wishing to comment on the proposed nature and location of the Project and the financing of the
Project with the proceeds of the Bonds may appear and be heard on this matter at the time of the hearing.
Further information mads be obtained by contacting the City Cleric's office, Santa Clarita City Hall, 23920
Valencia. Boulevard, 3` Floor, Santa Clarita, California 91355.
Dated: February 9, 1999.
Publish Date: February 9, 1999.
Sharon Dawson, CMC
City Clerk