Loading...
HomeMy WebLinkAboutD-1 Staff Report - OneLegacy - 2020 TEFRAPUBLIC HEARING/SCHEDULED ITEM D-1 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL VIA: SERGIO GONZALEZ, CITY MANAGER FROM: TALIKA M. JOHNSON, DIRECTOR OF ADMINISTRATIVE SERVICES DATE: JUNE 15, 2020 SUBJECT: PUBLIC HEARING TO ADOPT A RESOLUTION APPROVING THE ISSUANCE OF REVENUE BONDS OR OBLIGATIONS BY THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY FOR THE PURPOSE OF FINANCING THE ACQUISITION, IMPROVEMENT, INSTALLATION, REHABILITATION, EQUIPPING AND FURNISHING OF HEALTHCARE FACILITIES AND CERTAIN OTHER MATTERS RELATING THERETO BACKGROUND: OneLegacy and OneLegacy Foundation, each a California nonprofit public benefit corporation (the “Borrowers”), have requested that the California Municipal Finance Authority, a joint exercise of powers authority and public entity of the State of California (the “Authority”) issue one or more series of tax-exempt revenue obligations in an aggregate principal amount not to exceed $55,000,000 (the “Obligations”). The proceeds of the Obligations will be loaned to the Borrowers for the purpose of financing, refinancing or reimbursing the Borrowers for the costs of acquiring, improving, equipping, installing and furnishing an approximately 98,144 square foot healthcare facility located on a 133,814 square foot parcel of land at 1303 Optical Drive, Azusa, California 91702 (the “Property”) and additional improvements to the Property and appurtenant infrastructure, and paying certain financing costs and costs of issuance in connection with such financing (collectively, the “Project”). To proceed with the issuance of the Obligations, the City of Azusa must conduct a public hearing under the requirements of the Tax and Equity Fiscal Responsibility Act (“TEFRA”) and the Internal Revenue Code of 1986, as amended. Approval of the recommended actions does not result in any financial obligation of the City. RECOMMENDATIONS: Staff recommends the City Council take the following actions: APPROVED CITY COUNCIL 6/15/2020 1) Conduct the public hearing under the requirements of the Tax and Equity Fiscal Responsibility Act (“TEFRA”) and the Internal Revenue Code of 1986, as amended (the “Code”). 2) Adopt Resolution No. 2020-C27 approving the issuance of the Obligations by the Authority for the benefit of the Borrowers, to provide for the financing of the Project, such adoption is solely for the purposes of satisfying the requirements of TEFRA, the Code and the California Government Code Section 6500 et seq. THE BORROWERS: OneLegacy: OneLegacy is a California nonprofit public benefit corporation with a mission of saving and healing lives through the help of organ, eye and tissue donors. OneLegacy is dedicated to serving the communities of greater Los Angeles and surrounding areas through its connections with over 215 hospitals, 11 transplant centers, and population of nearly 20 million people. OneLegacy is accredited and registered with the Department of Health and Human Services, the Public Health Service, the FDA, the State of California Department of Public Health and the State of California Health and Human Services Agency, and is the nation’s largest organ, eye and tissue donor and transplant organization. OneLegacy’s mission is to save and heal lives through the help of donors, comforting the families they serve and inspiring individuals and the community to donate and continue the legacies of donors by giving transplants to individuals in need on the waitlist. OneLegacy’s core values are integrity, compassion, stewardship, diversity and inclusion, collaboration, innovation and excellence, and urgency to save and heal lives. OneLegacy Foundation: OneLegacy Foundation was created in 2011 to support the mission of OneLegacy, the nation’s largest donor organization and trusted steward of the donation process. OneLegacy Foundation’s focus is to educate and inspire people to take action in support of living and deceased donations to heal and save lives, comfort the families that OneLegacy serves, and honor those whose legacies live on. The mission of OneLegacy Foundation is founded on its core values of integrity, fiscal responsibility, fairness, transparency, sensitivity, respect, and inspiring and advancing donation and transplantation through research, public education and honoring donors. In order for all or a portion of the Obligations to qualify as tax-exempt bonds, the City of Azusa must conduct a public hearing (the “TEFRA Hearing”) providing for the members of the community an opportunity to speak in favor of or against the use of tax-exempt bonds or obligations for the financing of the Project. Prior to such TEFRA Hearing, reasonable notice must be provided to the members of the community. Following the close of the TEFRA Hearing, an “applicable elected representative” of the governmental unit hosting the Project must provide its approval of the issuance of the Obligations for the financing of the Project. CALIFORNIA MUNICIPAL FINANCE AUTHORITY: The California Municipal Finance Authority (“CMFA”) was created on January 1, 2004 pursuant to a joint exercise of powers agreement to promote economic, cultural and community development, through the financing of economic development and charitable activities throughout California. To date, over 300 municipalities, including the City of Azusa, have become members of CMFA. The CMFA was formed to assist local governments, nonprofit public benefit corporations and businesses with the issuance of taxable and tax-exempt bonds or obligations aimed at improving the standard of living in California. The CMFA’s representatives and its Board of Directors have considerable experience in bond financings. The Joint Exercise of Powers Agreement provides that the CMFA is a public entity, separate and apart from each member executing such agreement. The debts, liabilities and obligations of the CMFA do not constitute debts, liabilities or obligations of the members executing such agreement. The Obligations to be issued by the Authority for the Project will be the sole responsibility of the Borrowers, and the City will have no financial, legal, moral obligation, liability or responsibility for the Project or the repayment of the Obligations for the financing of the Project. All financing documents with respect to the issuance of the Obligations will contain clear disclaimers that the Obligations are not obligations of the City or the State of California, but are to be paid for solely from funds provided by the Borrowers. Participation by the City in the CMFA will not impact the City’s appropriations limits and will not constitute any type of indebtedness of the City. Outside of holding the TEFRA hearing and adopting the required resolution, no other participation or activity of the City or the City Council with respect to the issuance of the Obligations will be required. The Board of Directors of the California Foundation for Stronger Communities, a California non- profit public benefit corporation (the “Foundation”), acts as the Board of Directors for the CMFA. Through its conduit issuance activities, the CMFA shares a portion of the issuance fees it receives with its member communities and donates a portion of these issuance fees to the Foundation for the support of local charities. With respect to the City of Azusa, it is expected that 25% of the issuance fee attributable to the City will be granted by the CMFA to the general fund of the City. Such grant may be used for any lawful purpose of the City. FISCAL IMPACT: There is no fiscal impact to the City. The public hearing is a requirement of the financing and is the City’s only involvement. SUMMARY: In light of the foregoing, and in order to support OneLegacy and OneLegacy Foundation, staff recommends that the City conduct the TEFRA Hearing and adopt the resolution in favor of the issuance of the Obligations by the Authority. Prepared by: Reviewed and Approved: Talika M. Johnson Sergio Gonzalez Director of Administrative Services City Manager Attachment: 1) Resolution No. 2020-C27 RESOLUTION NO. 2020-C27 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA APPROVING A PLAN OF FINANCE FOR THE ISSUANCE OF REVENUE BONDS OR OBLIGATIONS BY THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $55,000,000 FOR THE PURPOSE OF FINANCING THE ACQUISITION, IMPROVEMENT, INSTALLATION, REHABILITATION, AND/OR EQUIPPING OF A HEALTHCARE FACILITY FOR THE BENEFIT OF ONELEGACY AND ONELEGACY FOUNDATION, AND CERTAIN OTHER MATTERS RELATING THERETO WHEREAS, pursuant to Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”), certain public agencies, including the City of Azusa (the “Members”) have entered into a Joint Exercise of Powers Agreement Relating to the California Municipal Finance Authority, dated as of January 1, 2004 (the “Agreement”) in order to form the California Municipal Finance Authority (the “Authority”), for the purpose of promoting economic, cultural and community development, and in order to exercise any powers common to the Members, including the issuance of bonds, notes or other evidences of indebtedness; and WHEREAS, OneLegacy and OneLegacy Foundation, both California nonprofit public benefit corporations (the “Borrowers”), have requested that the California Municipal Finance Authority (the “Authority”) issue one or more series of tax-exempt revenue obligations in an aggregate principal amount not to exceed $55,000,000 (the “Obligations”), the proceeds of which will be loaned to the Borrowers for the purpose of (a) financing, refinancing or reimbursing the Borrowers for the costs of acquiring, improving, equipping and furnishing (i) an approximately 98,144 square foot healthcare facility located on a 133,814 square foot parcel of land at 1303 Optical Drive, Azusa, California 91702 (the “Property”) and (ii) additional improvements to the Property and appurtenant infrastructure (collectively, the “Facilities”) and (b) paying certain financing costs and costs of issuance in connection with such financing (collectively, the “Project”); and WHEREAS, in order for the interest on the Obligations to be tax-exempt, Section 147(f) of the Internal Revenue Code of 1986, as amended (the “Code”), requires that an “applicable elected representative” of the governmental unit on behalf of which the Obligations are issued, and the governmental unit the geographic jurisdiction of which contains the facilities to be financed with the proceeds of the Obligations, hold a public hearing on the issuance of the Obligations and approve the issuance of the Obligations following such hearing; and WHEREAS, the Project is located within the territorial limits of the City, and the Authority has determined that the City Council is an “applicable elected representative” for purposes of holding such hearing; and WHEREAS, the Authority has requested that the City Council approve the issuance of the Obligations by the Authority in order to satisfy the public approval requirement of Section 147(f) of the Code and, the requirements of Section 4 of the Agreement; and Attachment 1 WHEREAS, notice of such public hearing has been duly given as required by the Code and Section 6586.5 of the Government Code of the State of California, and this City Council has heretofore held such public hearing at which all interested persons were given an opportunity to be heard on all matters relative to the financing or refinancing of the Project and the Authority’s issuance of the Obligations therefor; and WHEREAS, it is in the public interest and for the public benefit that the City approve the issuance of the Obligations by the Authority for the aforesaid purposes; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Azusa as follows: SECTION 1. The foregoing resolutions are true and correct. SECTION 2. The City Council hereby approves the issuance of the Obligations by the Authority. It is the purpose and intent of the City Council that this resolution constitute approval of the issuance of the Obligations (a) by the “applicable elected representative” of the governmental unit having jurisdiction over the area in which the Project is located and the governmental unit on behalf of which the Obligations are issued in accordance with Section 147(f) of the Code and (b) by the City Council in accordance with Section 4 of the Agreement. SECTION 3. The issuance of the Obligations shall be subject to the approval of the Authority of all financing documents relating thereto to which the Authority is a party. The City shall have no responsibility or liability whatsoever with respect to the Obligations SECTION 4. The adoption of this Resolution shall not obligate the City or any department thereof to (i) provide any financing to acquire, construct, improve and equip the Project or any refinancing of the Project; (ii) approve any application or request for or take any other action in connection with any planning approval, permit or other action necessary for the acquisition, construction, rehabilitation or operation of the Project; (iii) make any contribution or advance any funds whatsoever to the Authority; or (iv) take any further action with respect to the Authority or its membership therein SECTION 5. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this resolution and the financing transaction approved hereby. SECTION 6. This resolution shall take effect immediately upon its adoption. PASSED, APPROVED and ADOPTED this 15th day of June, 2020. Robert Gonzales Mayor ATTEST: Jeffrey Lawrence Cornejo, Jr. City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES )ss. CITY OF AZUSA ) I HEREBY CERTIFY that the foregoing Resolution No. 2020-C27 was duly adopted by the City Council of the City of Azusa at a regular meeting thereof, held on the 15th day of June 2020, by the following vote of the Council: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: Jeffrey Lawrence Cornejo, Jr. City Clerk APPROVED AS TO FORM: Best Best & Krieger, LLP City Attorney