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Conduct a public hearing required by the Tax and Equity Fiscal Responsibility Act of 1982 (TEFRA) and consider adopting a resolution approving the issuance of revenue bonds by the California Municipal Finance Authority (CMFA), in an amount not to exceed $42,000,000 for the purpose of financing and/or refinancing certain costs of the acquisition, construction, expansion, remodeling, renovation, furnishing, equipping and/or improvement of the health facilities, including real estate, owned and operated by NorthBay Group and/or NorthBay Corporation, located within Solano County
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Published Notice Required? Yes _X__ No _ _
Public Hearing Required? Yes _X__ No _ _
DEPARTMENTAL RECOMMENDATION:
It is recommended that the Board of Supervisors Conduct a public hearing required by the Tax and Equity Fiscal Responsibility Act of 1982 (TEFRA) and consider adopting a resolution approving the issuance of revenue bonds by the California Municipal Finance Authority (CMFA), in an amount not to exceed $42,000,000 for the purpose of financing and/or refinancing certain costs of the acquisition, construction, expansion, remodeling, renovation, furnishing, equipping and/or improvement of the health facilities, including real estate, owned and operated by NorthBay Group and/or NorthBay Corporation, located within Solano County.
SUMMARY:
NorthBay Healthcare Group (NorthBay), for itself and NorthBay Healthcare Corporation (NorthBay Corporation), each of which is a nonprofit public benefit corporation duly organized and existing under the laws of the State of California and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986 (the “Code”) (collectively, the “Borrower”) seeks to provide for the financing and/or refinancing of $42,000,000 for the purpose of acquisition, construction, expansion, remodeling, renovation, furnishing, equipping and/or providing improvements of health facilities (Project). Adoption of the resolution is solely for the purposes of satisfying the requirements of TEFRA, the Code and California Government Code section 6500 in order to request that the CMFA participate in the issuance of one or more series of tax-exempt revenue bonds. This process requires the County of Solano conduct a public hearing (TEFRA Hearing) providing for the members of the community an opportunity to speak in favor of or against the use of tax-exempt bonds.
FINANCIAL IMPACT:
The Bonds to be issued by the CMFA for the Project will be the sole responsibility of the Borrower, and the County 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 County or the State of California but are to be paid for solely from funds provided by the Borrower.
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 County of Solano, it is expected that that a portion of the issuance fee attributable to the County will be granted by the CMFA to the general fund of the County. Such grant may be used for any lawful purpose of the County.
The costs associated with preparing the agenda item are nominal and absorbed by the department’s FY2024/25 Working Budget.
DISCUSSION:
In order for all or a portion of the Bonds to qualify as tax-exempt bonds, the County of Solano must conduct a TEFRA Hearing, providing for the members of the community an opportunity to speak in favor of or against the use of tax-exempt bonds 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 Bonds for the financing of the Project.
California Municipal Finance Authority
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, including the County of Solano, have become members of CMFA.
The CMFA was formed to assist local governments, non-profit organizations and businesses with the issuance of taxable and tax-exempt bonds aimed at improving the standard of living in California. The CMFA’s representatives and its Board of Directors have considerable experience in bond financings.
NorthBay and NorthBay Corporation are seeking to provide for the financing and/or refinancing of $42,000,000 for the purpose of acquisition, construction, expansion, remodeling, renovation, furnishing, equipping and/or providing improvements of health facilities. Adoption of this resolution will allow CMFA to issue the bonds on their behalf.
ALTERNATIVES:
The Board of Supervisors could elect not to adopt the resolution in favor of the issuance of the Bonds by the CMFA. This is not recommended as it will hamper the provision of important healthcare services to the people of Solano County.
OTHER AGENCY INVOLVEMENT:
California Municipal Finance Authority, NorthBay and/or NorthBay Corporation have been involved in the drafting of this item.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION