| | | | | | | | ![](https://rocklin.novusagenda.com/AgendaWeb/ImageLibrary.ashx?path=ROOT%252fImageLibrary%252frocklinlogo.jpg) | City Council
Staff Report
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Subject: | Issuance of Revenue Bonds by the California Municipal Finance Authority in an Aggregate Principal Amount Not to Exceed $70,000,000 to Finance and Refinance a 288-Unit Multifamily Housing Facility (Terracina at Whitney Ranch) for the Benefit of Rocklin 688, L.P., a California Limited Partnership, or Another Entity Created by USA Properties, Inc. (or an Affiliate), and Certain Other Matters Relating Thereto |
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| Date: | March 22, 2022 |
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| Submitted By: | Ted Williams, Accounting Supervisor |
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| Department: | Administrative Services - Finance |
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| | | | | | | | Staff Recommendation: | Adopt a Resolution of the City Council of the City of Rocklin Approving the Issuance of Revenue Bonds by the California Municipal Finance Authority in an Aggregate Principal Amount Not to Exceed $70,000,000 to Finance and Refinance a 288-Unit Multifamily Housing Facility for the Benefit of Rocklin 688, L.P., a California Limited Partnership, or Another Entity Created by USA Properties, Inc. (or an Affiliate), and Certain Other Matters Relating Thereto |
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| | | | | | | | BACKGROUND: | The City is being asked to adopt a resolution that would approve the issuance of tax-exempt and taxable revenue bonds by the California Municipal Finance Authority (CMFA) in one or more series in a maximum aggregate principal amount of $70,000,000 (the Bonds) to finance and refinance the acquisition, construction, improvement and equipping of a 288-unit multifamily rental housing facility for low-income households (the Project) to be owned and operated by the USA Properties, Inc. (the Sponsor), on behalf of Rocklin 688, L.P., a California limited partnership, or another entity created by the Sponsor or an affiliate of the Sponsor (the Borrower). The Project, Terracina at Whitney Ranch, is located at 801 through 808 (inclusive), 810, 812, 814, 816 and 818 University Avenue, on a site located east of University Avenue, west of Wildcat Boulevard and north of Whitney Ranch Parkway, in the City of Rocklin.
The 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 350 municipalities have become members of CMFA. The City became a member of CMFA in December 2017.
Prior to the issuance of bonds to finance the Project, the Internal Revenue Code section 147(f), the Tax Equity and Fiscal Responsibility Tax Act of 1982 (TEFRA), the Tax Reform Act of 1986, and federal regulations requires the City Council of the City of Rocklin (the City) to conduct a public hearing and adopt a resolution approving the issuance of revenue bonds.
The City has been requested to conduct a TEFRA public hearing and approve the issuance of the Bonds for purposes of federal law and state law. The Bonds are limited obligations of CMFA payable solely by the Borrower, and will not be direct obligations of CMFA, the City or any member of the CMFA.
The Bonds will be issued in an amount not to exceed $70,000,000. Neither the City, the County, nor the State is liable in any way for repayment of the Bonds.
The Bonds to be issued by the CMFA for the Project will be the sole responsibility of the Borrower, and the City will have no financial, legal, moral obligation, liability or responsibility for the Project or the repayment of the Bonds for the financing of the Project. All financing documents with respect to the issuance of the Bonds will contain clear disclaimers that the Bonds are not obligations 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 Bonds will be required.
The financing for the Project involves the issuance of tax-exempt bonds and may be completed through CMFA if the City approves the financing. The purpose of this TEFRA hearing is to receive public comment and request approval of the financing, as required by the Internal Revenue Code of 1986, as amended. Bond Counsel in this transaction, Jones Hall APLC, has coordinated with the City Clerk to properly notice this public hearing and has assisted in the preparation of the attached resolution for approval.
The City is the appropriate entity to conduct a public hearing and approve the issuance of the Bonds and the use of the proceeds of the Bonds pursuant to Section 147(f) of the Internal Revenue Code before the Bonds can be issued as tax-exempt obligations. In this case, the Borrower applied to CMFA for the financing, and therefore CMFA now seeks approval of the City Council on behalf of the Project.
Findings:
• The project applicant, USA Properties, Inc., has requested that the California Municipal Finance Authority participate in the issuance of one or more series of revenue bonds, in an aggregate principal amount not to exceed $70,000,000, for the financing of the Project.
• Pursuant to Section 147(f) of the Internal Revenue Code of 1986, the issuance of the Bonds by Authority must be approved by the City through a properly-noticed public hearing process.
• As a member of CMFA, the Authority would provide 25% of the Authority’s collected initial fee to the City’s general fund.
The actions of the City Council in holding this Municipal hearing and approving this Resolution do not obligate the City in any manner for payment of the principal, interest, fees, or any other costs associated with the issuance of the Bonds. As a member of CMFA, the Authority would provide 25% of the Authority’s collected initial fee to the City’s general fund.
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| | | | | | | | Fiscal Impact: | There is no fiscal impact to the City of Rocklin for conducting a public hearing and adopting a resolution for the issuance of tax-exempt revenue bonds by California Municipal Finance Authority. |
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| | | | | | | | This Staff Report has been reviewed by the City Attorney for legal sufficiency and by the City Manager for content. |
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