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HomeMy WebLinkAbout2005-09-27 - AGENDA REPORTS - CHILD FAMILY CENTER BONDS (2)Is v4c; SUBJECT: Agenda Item: -I CITY OF SANTA CLARITA AGENDA REPORT City Manager Approval: Item to be presented by: September 27, 2005 Darren Hemindez' RESOLUTION APPROVING THE ISSUANCE OF BONDS BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY FOR CHILD & FAMILY CENTER DEPARTMENT: Administrative Services RECOMMENDED ACTION Following a public hearing, City Council adopt a resolution approving the issuance of bonds by the California Statewide Communities Development Authority for Child & Family Center. BACKGROUND The City has received a request from the California Statewide Communities Development Authority (the "Authority") to conduct a public hearing as required by the Internal Revenue Code in order to issue tax-exempt revenue bonds (the "Bonds") in an aggregate amount not to exceed $6 million on behalf of Child & Family Center (the "Borrower"). The Borrower will use the proceeds of the Bonds to refinance existing debt, and finance the expansion of its current facilities located at 21545 Centre Pointe Parkway in the City of Santa Clarita (the "Project"). Child & Family Center's refinance of the existing loan will result in an overall cost savings to the Borrower. Established in 1976, the Child & Family Center provides mental health, substance abuse, and educational support services to children and adults in the Santa Clarita Valley. It is the only community health clinic in the Santa Clarita Valley. In 2001, through the issuance of $2.8 million in bonds issued by the Authority, the Center completed construction of a 26,000 square -foot building to house its operations. A list of the Center's services include: 1) preschool/daycare programs for poverty and low-income families; 2) delinquency prevention services contracted by the Los Angeles County Adopted: G_%0-05-119 Probation Department; 3) substance abuse prevention and treatment services funded by the Los Angeles County Department of Alcohol and Drug Administration; 4) substance abuse early intervention contracted by William S. Hart School District; and 5) school-based mental health services provided at local elementary and secondary schools. Discussion/Analysis The Bonds would be tax-exempt private activity bonds for the purposes of the Internal Revenue Code and, as such, require the approval of the elected body of the governmental entity having jurisdiction over the area where the project to be financed is located. The City will not be under any obligation to repay the bond indebtedness. In order for the Authority to issue such Bonds, the City must 1) conduct a public hearing allowing members of the pubic to comment on the proposed Project, and 2) approve of the Authority's issuance of Bonds on behalf of the proposed financing. Although the authority (not the City) will be the issuer of the tax-exempt revenue bonds for the Project, the financing cannot proceed without the City becoming a member of the Authority and, as the governmental entity having jurisdiction over the site, approving of the Authority's issuance of indebtedness. The Authority is a Calfornia joint excercise of powers authority, organized and existing under the laws of the State of California (specifically, California Governmental Code Section 6500 and following), and is sponsored by the League of California Cities and the California State Association of Counties. Under the California Government Code, cities and counties are authorized to form by agreement a governmental entity that combines the powers of such entities to perform certain governmental functions specifically outlined in the Agreement. With respect to the Authority, over 450 California cities, counties, and special districts have entered into and executed the Agreement to become a member of the Authority. The Authority is authorized to assist in the financing of 501(c) (3) nonprofit projects. ALTERNATIVE ACTIONS Other action as determined by Council. FISCAL IMPACT There is no direct or indirect financial impact to the City of Santa Clarita as a result of this proposed financing. The Authority will issue tax-exempt revenue bonds on behalf of the Project. The tax-exempt revenue bonds are payable solely out of the revenues derived by the Borrower. No financial obligations are placed on the City for project financing costs or debt repayment. ATTACHMENTS Resolution NOTICE OF PUBLIC HEARING NOTICE IS HEREBY GIVEN that at 6:00 p.m. on September 27, 2005, at the Santa Clarita City Hall, Council Chambers, 23920 Valencia Blvd., 1st Floor, Santa Clarita, California, the Council of the City of Santa Clarita, California (the "City"), will conduct a public hearing concerning the issuance by California Statewide Communities Development Authority (the "Issuer") of its tax-exempt obligations in an aggregate principal amount not expected to exceed $6,000,000 (the "Obligations"). Proceeds of the Obligations are to be made available to Child & Family Center, a nonprofit public benefit corporation described in Section 501(c)(3) of the Internal Revenue Code of 1986, or an affiliate (the `Borrower"), to (i) to prepay all of the outstanding principal amount of the Issuer's 501(c)(3) Land, Building and Equipment Program Note (Child & Family Center Project), Series 2000-12 (the "Series 2000 Note"), the proceeds of which were used to finance the acquisition, construction, rehabilitation and improvement of real and personal property used as a part of the Borrower's community mental health clinic providing counseling, substance abuse services, treatment, education and therapy of emotional and behavioral problems for children and families, which is owned and used by the Borrower and located at 21545 Centre Pointe Parkway, Santa Clarita, California, (ii) to finance the acquisition, construction, rehabilitation and improvement of an expansion of such community mental health clinic, and (iii) to pay related expenses of issuing the Obligations. Neither the faith and credit nor any taxing power of the City, the Authority, 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 with respect to the Obligations, nor shall the County, 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 Obligations. The public hearing is intended to comply with the public approval requirements of Section 147(t) of the Internal Revenue Code of 1986. Those wishing to comment on the Obligations or on the nature and location of the facilities to be financed or refinanced may either appear in person at the time and place indicated above or submit written comments, which must be received prior to the public hearing, by contacting the City Clerk's Office, Santa Clarita City Hall, 23920 Valencia Blvd., #304, Santa Clarita, California. Dated: September 7, 2005. Sharon L. Dawson, CMC City Clerk