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HomeMy WebLinkAbout2012-09-25 - AGENDA REPORTS - REVENUE BONDS EINSTEIN ACADEMY (2)Agenda Item: CITY OF SANTA CLARITA AGENDA REPORT PUBLIC HEARING City Manager Approval: Item to be presented by: Casey Bingham DATE: September 25, 2012 SUBJECT: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA APPROVING THE ISSUANCE OF REVENUE BONDS BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY FOR ALBERT EINSTEIN ACADEMY DEPARTMENT: City Attorney's Office RECOMMENDED ACTION City Council conduct a public hearing and adopt a resolution approving the issuance of revenue bonds by the California Statewide Communities Development Authority (CSCDA) for Albert Einstein Academy. BACKGROUND The California Statewide Communities Development Authority (CSCDA) is a joint exercise of powers authority created under the California Joint Powers Act (California Government Code Section 6500 and following) (the "Act"). Pursuant to the Act and an Amended and Restated Joint Powers Agreement among a number of cities, counties and special districts within the State of California (the "Agreement"), the CSCDA is authorized to issue revenue bonds for the benefit of conduit borrowers. The CSCDA issues bonds on behalf of the CSCDA's members in whose geographical jurisdiction the projects are to be located, in this case, the City of Santa Clarita (City). Since the Albert Einstein Academy is located within the territorial limits of the City, the Santa Clarita City Council is the applicable elected representative required by Section 147(f) of the Internal Revenue Code of 1986 to hold a public hearing and approve the issuance of the tax-exempt revenue bonds. Therefore, CSCDA has requested that the City Council approve the issuance of the tax-exempt revenue bonds by CSCDA with a resolution in order to satisfy the public approval requirements of Section 147(f) of the Internal Revenue Code. Thereafter, pursuant to applicable state law, the bonds are issued as limited obligations of the CSCDA, not of the City, payable solely out of the revenues and receipts derived from the applicable project. The adoption of the resolution will not require the City to be financially obligated nor liable, nor provide any financing for the project at Albert Einstein Academy. The City's credit and bond ratings are not at risk by adopting this resolution. No City revenues are even considered or remotely at risk by this bond issuance. Albert Einstein Academy currently operates as a middle school teaching students from 7th to 9th grade. City staff has been in contact with representatives of the William S. Hart Union High School District regarding this bond issuance and they did not express any concerns. The City Attorney's Office and City's Bond Counsel have approved the Council resolution language approving the issuance of revenue bonds by CSCDA for Albert Einstein Academy. The City has received a request from the CSCDA to conduct a public hearing as required by the Internal Revenue Code in order to issue tax-exempt revenue bonds in an aggregate amount not to exceed $5.5 million. The proceeds of this bond will be used for the acquisition, improvement, and equipping of the Albert Einstein Academy campus located at 28141 Kelly Johnson Parkway in Santa Clarita, California. City staff recommends the City Council adopt a resolution approving the issuance of revenue bonds by the California Statewide Communities Development Authority (CSCDA) for Albert Einstein Academy. ALTERNATIVE ACTIONS 1. The City Council not approve the issuance of the bonds by the California Statewide Communities Development Authority (CSCDA) for the Albert Einstein Academy project to be financed. 2. Other direction as determined by the City Council. FISCAL IMPACT No additional resources are needed to adopt this resolution. ATTACHMENTS Resolution Public Notice RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA APPROVING THE ISSUANCE OF REVENUE BONDS BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY FOR THE PURPOSE OF FINANCING THE COSTS OF ACQUISITION, IMPROVEMENT AND EQUIPPING OF CERTAIN CHARTER SCHOOL EDUCATIONAL FACILITIES AND CERTAIN OTHER MATTERS RELATING THERETO WHEREAS, the California Statewide Communities Development Authority (the "Authority") is authorized pursuant to Title 1, Division 7, Chapter 5 of the Government Code of the State of California and the terms of an Amended and Restated Joint Exercise of Powers Agreement, dated as of June 1, 1988 (the "Agreement"), among certain local agencies throughout the State of California, including the City of Santa Clarita, California (the "City"), to issue revenue bonds and other forms of indebtedness to promote economic development within the State of California; and WHEREAS, AEALAS, Inc., a California nonprofit public benefit corporation (the "Borrower") has requested that the Authority issue revenue bonds in one or more series in a maximum aggregate principal amount of $5,500,000 (the "Bonds"). A portion of the proceeds of the Bonds will be used to finance and refinance the costs of the acquisition, improvement and equipping of certain charter school educational facilities known as the Albert Einstein Academy for Letters, Arts and Sciences. The facilities may include but are not limited to classrooms, multi-purpose rooms, administration spaces, libraries, restrooms, outdoor areas and parking areas, located at 28141 Kelly Johnson Parkway, Santa Clarita, California (the "Project"). The Project will be owned and operated by the Borrower; and WHEREAS, pursuant to Section 147(f) of the Internal Revenue Code of 1986 (the "Code"), prior to their issuance, the Bonds are required to be approved by the "applicable elected representative" of the governmental unit on whose behalf the Bonds are expected to be issued and by a governmental unit having jurisdiction over the entire area in which any facility financed by the Bonds is to be located, after a public hearing held following reasonable public notice; and WHEREAS, the facilities to be financed are located within the territorial limits of the City; and WHEREAS, the members of the City Council are the applicable elected representatives of the City; and WHEREAS, there has been published, at least 14 days prior to the date hereof, in a newspaper of general circulation within the City of Santa Clarita, a notice that a public hearing regarding the Bonds would be held on the date hereof, and WHEREAS, such public hearing was conducted on this date by the City Council, at which time an opportunity was provided to interested parties to present arguments both for and against the issuance of the Bonds; and z WHEREAS, it is intended that this resolution shall constitute the approval of the issuance of the Bonds and the Project required by Section 147(f) of the Code and Section 9 of the Agreement, as applicable. NOW THEREFORE, the City Council of the City of Santa Clarita does hereby resolve as follows: SECTION 1. The City Council hereby finds and determines that the foregoing recitals are true and correct. SECTION 2. The City Council hereby approves the issuance of the Bonds by the Authority and the Project to be financed thereby. This approval is solely for the purposes of Section 147(f) of the Code and Section 9 of the Agreement. The City shall not have any liability or responsibility for the issuance of the Bonds or payment of principal or interest on the Bonds, the Bonds shall not constitute an obligation or indebtedness of the City and the assets and revenues of the City are not being pledged as security for the payment of principal or interest on the Bonds. SECTION 3. The issuance and delivery of the Bonds shall be subject to the approval of and execution by the Authority of all financing documents relating thereto to which the Authority is a party and is subject to the sale of the Bonds by the Authority. SECTION 4. The City Clerk of the City shall forward a certified copy of this Resolution and a copy of the affidavit of publication of the notice of public hearing to: Eugene Clark -Herrera, Esq. Orrick, Herrington & Sutcliffe LLP 405 Howard Street San Francisco, California 94105 SECTION 5. This resolution shall take effect immediately upon its adoption. PASSED, APPROVED, AND ADOPTED this day of 2012. MAYOR ATTEST: INTERIM CITY CLERK DATE: M, STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARITA ) I, Armine Chaparyan, Interim City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the day of 2012, by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: INTERIM CITY CLERK W Public Hearing Notice Published 9/11/12 in The Signal newspaper 1 NOTICE OF PUBLIC HEARING WITH RE- SPECT TO THE ISSUANCE OF BONDS BY THE CAUFORNIA STATEWHLE COMMU- NITIES DEVELOPMENT AUTHORITY FOR THE PURPOSE OF FINANCING FACILITIES FOR THE BENEFIT OF ALBERT EINSTEIN ACADEMY FOR LETTERS, ARTS AND SCI- ENCES NOTICE IS HEREBY GIVEN that a puWk hearing will be held on SeVtember 25. wm,aa .rva., ..'a. .00, I;anNrt12. as redulrad M' Section 147(f) Of the lateme( Revenue Cade of 198B.to consider the pro - dead Issmunca, ro- dead'fssonnce by the California Statewide CommurWN Devekpmont Authority of its reverwe bands In a mmdmum aggre- gate principal amount of.S6,500,ODO the Bonds) for the benefit of Albert EFsVin Academy for Legers, Arts and Sciences Ohe 8omowar'. A potion olIthe Proceeds of the Bonds win be used te finsnce or refinance a portion of the caste of the acquisition, coasUuc- tion, improvemerd and equipping of certain charter school educatknef fatuities Known as Albert Einstein Academy far Letters, Arts and Sciences located at 26141 Kelly Johnson Parkway, Sarre clanta, California 91355 (the "Project). Any proceeds of the Bonds not allocated to the Project will he used to (a] pay Interest on the Bonds, th) aware issuance of the Bonds or (c) .a debt service reserve fund for the Bondy The Project will he owned by the Borrower or One er more affilales of the Barrawei and operated by the Borrower. Interestedpersons wlsR'mg k eaProee their views on the Luuence of the Bands, Of an nat theure Or location of the Project, may ei. ther appear in Person at the fine and place indicated above, or submit written cm mente. which must be received one day poor to the puNe hearing Or Mt. Jon Pen- amr, Cali omie Statewide Cammunitles d