CITY MANAGER' S / STAFF' S REPORTREGULAR CITY COUNCIL MEETING DATE:
June 4, 2018
ITEM NO:
SUBJECT: Consideration and Necessary Action on Resolution Approving the issuance ofnot to exceed $5,000,000 of Califomia Enterprise Development AuthorityRevenue Obligations (the "Obligations") for the benefit of United HealthCenters of the San Joaquin Valley.
DISCUSSION: The City is a founding member of the California EnterpriseDevelopment Authority ("CEDA"), u joint powers authority established by the CaliforniaAssociation for Local Economic Development ("CALED"), whose purpose is to issue tax-exempt andtaxable conduit revenue bonds to fund commercial and industrial developmentprojects within member jurisdictions.
The Joint Exercise of Powers Act, comprising Articles 1,2,3 and 4 of Chapter 5 of Division7 of Title 1 (commencing with Section 6500) of the Government Code of the State ofCalifornia and Section 145 of the Internal Revenue Code of 1986, as amended (the "Code"),provide for the issuance of tax-exempt "private activity" obligations by a conduitgovernmental issuer on behalf of a 501(cX3) corporation to finance facilities owned by suchentity. For interest on such private activity obligations to be tax-exempt, Section I47(f) ofthe Code requires, among other things, the obligations and the facilities financed therebymust be approved by both the governmental unit which will issue the obligations (in thiscase, CEDA) and the governmental unit in which the obligation-financed facilities arelocated (in this case, the City). Further, a public hearing, for which reasonable notice hasbeen given, must be held. This hearing and process is referred to as TEFRA, after the TaxEqurty and Fiscal Responsibilþ Act of 1982.
The project to be financed and/ or refinanced with the proceeds of the Obligations is locatedwithin the jurisdiction of the City. Therefore, the City has been asked to conduct the publichearing, and to approve the Obligations as the host governmental unit. CEDA haseffectuated proper notice of the hearing via publication at least 14 days in advance.
Federal law requires a public hearing before the City Council prior to any bond issuance byCEDA for projects under the City's jurisdiction. If the City Council does not approve theproject, CEDA cannot issue bonds.
June 4, 2018 Council Packet 8
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2
UNITED HEALTH CENTERS OF THE SAN JOAQUtr.{ VALLEY
Incorporated in I97t, the Borrower is a private nonprofit organization that providescomprehensive medical, dental and community health services to the medically underservedin the central San Joaquin Valley. The Borrower is licensed by the State of California as acommunity health center, and the Federal and State governments have desþated theBorrower as a Federally Qualified Health Center. The Borrower is staffed by acomprehensive team of over 400 health professionals, who serve over 190,000 patients ayear in the Cenffal San Joaquin Valley. The agricultural economy of the San JoaquinValley depends heavily on a farm labor force which is made up primarily of localagricultural and farm workers. During the peak harvest season migrant workers fromthroughout the South\Mestern United States come to assist in the harvesting of a variety offruits and vegetables. The Borrower primarily serves these farmers and workers, and theirfamilies. To that end, the Borrower desires to expand its services in the City by constructinga ne\M health clinic.
CEDA will loan the proceeds of the Obligations to the Borrower for the purpose of (a)financing the cost of acquiring, developing, constructing, installing, equipping andfumishing an approximately 12,000 square foot healthcare facility located at 2705 SouthHighland, Selma, Califomia 93662 (the "Facility"); and (b) to pay certain costs of issuancein connection with such financing. The Facility will significantly enhance the healthcareservices provided by the Borrower to residents of the Selma and the surroundingcommunities.
Because the Facility will be located within the City's jurisdiction and interest on theObligations may be tax-exempt, a public hearing and the approval of the Obligations by theCity Council is requiredby the Code.
FISCAL IMPACTS: There is no financial impact to the City. CEDA will act as issuer andperform all of the necessary IegaI and administrative responsibilities associated with thefinancing. The Obligations are special, limited obligations of CEDA payable solely throughthe repayment of the loans from CEDA which repayment is used to pay the principal of andinterest on the Obligations. The Obligations issued by CEDA are not an obligations of theCity or any member of CEDA. Neither the faith or credit, nor the taxing power of the City,any member of the Authority, the State or any political subdivision is pledged to therepayment of the Obligations.
June 4, 2018 Council Packet 9
COST: (Enter cost of item to be purchased ín box
below)
BUDGET IMPACT: (Enter amount thisnon-badgeted ítem will impact this years'budgetín box below - íf budgeted, enter NONE}
None None
FUNDING: (Enter the funding source þr thisítem in bor úeíow - iffund exists, enter the bølønce
in the fund),
ON-GOING COST: (Enterthe amountthøt will need to be budgeted eøch yeør ín borbelow - if one-time cost, enter NONE)
Funding Source:
N/AFund Balance:
N/A
RECOMMENDATION:
Conduct public hearing for the project of (a) financing the cost of acquiring, developing,constructing, installing, equipping and furnishing an approximately 12,000 square foothealthcare facility located at2705 South Highland, Selma, California 93662 (the "Facility");and (b) to pay certain costs of issuance in connection with such financing, and approveResolution for the issuance of not to exceed $5,000,000 of California EnterpriseDe.¡elopment Authority Revenue Obligations (the "Obligations") for the benefit of UnitedHealth Centers of the San Joaquin Valley, a California nonprofit public benefit corporation(the "Borrower").
Isaac Finance Director Date
Henry Perea, Interim City Manager Date
June 4, 2018 Council Packet 10
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/s/ Henry Perea 06-01-2018
RESOLUTION NO. 2018-
A RESOLUTION OF THE CITY OF SELMA CITY COUNCILAPPROVING THE ISSUANCE BY THE CALIFORNIA ENTERPRISEDEVELOPMENT AUTHORITY OF ITS REVENUE OBLIGATIONS FORTHE BENEFIT OF UNITED HEALTH CENTERS OF THE SAN JOAQUINVALLEY AND/OR A RELATED ENTITY IN AN AGGREGATEAMOUNT NOT TO EXCEED $5,000,000 FOR THE PURPOSE OFFINANCING OR REFINANCING THE COST OF ACQTTIRING,DEVELOPING, CONSTRUCTING, INSTALLING, EQTIIPPING ANDFURNISHING A CERTAIN HEALTHCARE FACILITYO AND OTHERMATTERS RELATING TIIERETO
WHEREAS, United Health Centers of the San Joaquin Valley, a nonprofit publicbenefit corporation (the "Borrower"), duly organized and existing under the laws of the State ofCalifornia (the "State"), has requested that the California Enterprise Development Authority (the"Authority") issue, from time to time, pursuant to a plan of finance, its tax-exempt and/or taxablerevenue obligations in an aggregate principal amount not to exceed $5,000,000 (the"Obligations") for the benefit of the Borrower, pursuant to Chapter 5 of Division 7 of Title 1 ofthe Govemment Code of the State (commencing with Section 6500) (the "Act") to (a) finance orrefinance the cost of acquiring, developing, constructing, installing, equipping and furnishing an
approximately 12,000 square foot healthcare facility located at 2705 South Highland, Selma,Califomia 93662 (the "Facility'') and (b) pay certain costs of issuance in connection with suchfinancing or refinancing; and
\üHEREAS, the Borrower is an organization described in Section 501(c)(3) of theIntemal Revenue Code of 1986, as amended (the "Code"), and will own and operate the Facilityin connection with its mission of providing comprehensive medical, dental and communityhealth services to rural communities; and
WHEREAS, the issuance of the Obligations must be approved by the governmentalunit on behalf of which the Obligations are issued and a governmental unit having jurisdictionover the territorial limits in which the Facility is located pursuant to the public approvalrequirement of Section 147(Ð of the Code; and
WHEREAS, the Facility is located within the territorial limits of the City of Selma (the"City'), and the City Council of the City (the "City Council")ris the elected legislative body ofthe City and is the "applicable elected representative" required to approve the issuance of theObligations under Section I47(Ð of the Code; and
WHEREAS, the Authority and the Borrower have requested that the City Councilapprove the issuance of the Obligations and the financing or refinancing of the Facility with theproceeds of the Obligations solely for purposes of complying with Section I47(Ð of the Code;and
4834-8090-3523. l
June 4, 2018 Council Packet 11
\ryHEREAS, a public hearing was held by the City Council on this 4th day of June,2018, at the meeting which commenced at the hour of 6:00 p.m., Council Chambers,1710 Tucker Street, Selma, California 93662, following duly published notice thereof in a
newspaper of general circulation in the City, on ill4ay 17, 2018, and all persons desiring to beheard have been heard; and
WHEREAS, it is intended that this Resolution shall comply with the public approvalrequirements of Sectiot 147(\ of the Code; provided, however, that this Resolution is neitherintended to nor shall it constitute an approval by the City Council of the Facility for any otherpufpose, including, but not limited to, compliance with the California Environmental Quality Act(California Public Resources Code, Section 21100, et seq.) ("CEQA");
NO\M, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED bYthe City Council of the City of Selma, State of California as follows:
Section 1. The City Council hereby finds and determines that all of the recitals are trueand correct. The City Council, as the "applicable elected representative" of the governmentalunit on behalf of which the Obligations will be issued and having jurisdiction over the area inwhich the Facility is located, hereby approves the issuance of the Obligations by the Authority,which Obligations may be tax-exempt and/or taxable as approved by the Authority in itsresolution, in an amount not to exceed $5,000,000 to finance or refinance the costs of theFacility. This resolution shall constitute "issuer" approval and "host" approval of the issuance ofthe Obligations within the meaning of Section 147(Ð of the Code and shall constitute theapproval of the issuance of the Obligations within the meaning of the Act; provided, however,that this Resolution shall not constitute an approval by the City Council of the Facility for anyother purposes, including compliance thereof with CEQA, nor does it constitute an approval ofthe underlying credit or financial structure of the Obligations. The City shall not bear anyresponsibility for the issuance of the Obligations, the tax-exempt status of the Obligations, therepayment of the Obligaiions or any other matter related to the Obligations.
Section 2. AII actions heretofore taken by the officers, employees and agents of the Citywith respect to the approval of the issuance of the Obligations are hereby approved, confirmedand ratified, and the officers and employees of the City and their authorized deputies and agentsare hereby authorized and directed, jointly and severally, to do any and all things and to executeand deliver any and all certificates and documents which they or bond counsel may deemnecessary or advisable in order to consummate the issuance of the Obligations and otherwise toeffectuate the purposes of this Resolution.
Section 3. The adoption of this Resolution shall not obligate the City or any departmentthereof to (i) provide any financing for the Facility; (ii) approve any application or request for ortake any other action in connection with any planning approval, permit or other action necessaryfor the acquisition, rehabilitation or operation of the Facility; or (iii) make any contribution oradvance any funds whatsoever to the Authority.
Section 4. This Resolution shall take effect from and after its adoption.
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June 4, 2018 Council Packet 12
PASSED AND ADOPTED at a regular meeting of the City Council of the City ofSelma held on this 4th day of June,2}lï,by the following vote:
AYES: COUNCILMEMBERS
NOES COUNCILMEMBERS
ABSENT: COUNCILMEMBERS
ABSTAIN: COUNCILMEMBERS
Jim Avalos, Mayor of the City of Selma
ATTEST:
ByReyna Rivera, City Clerk
J4834-8090-3523.t
June 4, 2018 Council Packet 13
NOTICE OF PUBLIC HEARING WITH RESPECT TO THE ISSUANCE OF TAX-EXEMPT REVENUE OBLIGATIONS BY THE CALIFORNIA ENTERPRISEDEVELOPMENT AUTHORITY FOR THE PURPOSE OF FINANCING OR
REFINANCING THE COST OF ACQUIRING, DEVELOPING, CONSTRUCTING,INSTALLING, EQUIPPING AND FURNISHING A CERTAIN HEALTHCARE
FACILITY FOR THE BENEFIT OF UMTED HEALTH CENTERS OF THE SANJOAQUIN VALLEY AND/OR A RELATED ENTITY
NOTICE IS HEREBY GIVEN that at 6:00 p.m., or as soon thereafter as the matter may be heard,on June 4,2018 at 1710 Tucker Street, Council Chambers, Selma, Califomia 93662, the City Council ofthe City of Selma (the "City Council") will conduct a public hearing (the "Public Hearing") at which theCity Council will hear and consider information concerning the issuance, from time to time, pursuant to aplan of frnance, of one or more series of tax-exempt revenue obligations by the California EnterpriseDevelopment Authority (the "Issuer") in an aggregate principal amount not to exceed Five Million Dollars($5,000,000) (the "Obligations") for the benefit of United Health Centers of the San Joaquin Valley, a
nonprofit public benefit corporation, duly organized and existing under the laws of the State of California(the "State"), and/or a related entity (the "Borrower"). The Issuer will loan the proceeds of the Obligationsto the Borrower pursuant to one or more loan agreements (collectively, the "Loan Agreements"). Theproceeds of the Obligations loaned to the Borrower will be applied to (a) finance or refinance the cost ofacquiring, constructing, installing, equipping and furnishing of an approximately 12,000 square foothealthcare facility located at 2705 South Highland, Selma, Califomia 93662 (the "Facility") and (b) paycertain costs of issuance in connection with such financing or refinancing. The Borrower is an organizationdescribed in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), and willown and operate the Facility in connection with its mission of providing comprehensive medical, dentaland community health services to rural communities. The Obligations will be paid entirely fromrepayments by the Borrower under the Loan Agreements.
Neither the faith and credit nor the taxing power of the City of Selma (the "City"), the State, or anyother political corporation, subdivision or agency of the State is pledged to the payment of the principal of,premium, if any, or interest on, the Obligations, nor shall the City, the State or any other politicalcorporation, subdivision or agency of the State be liable or obligated to pay the principal of, premium, ifany, or interest on, the Obligations.
The Public Hearing is intended to comply with the public approval requirements of Section 147(Ðof the Code. Those wishing to comment on the proposed nature and location of the Facility and the financingor refinancing of the Facility with the proceeds of the Obligations may either appear in person at the timeand place indicated above. Written comments can be presented at the June 4,2018 public hearing or maybe submitted to the City Clerk prior to the public hearing. (Written comments are to be submitted to theCity Clerk, 1710 Tucker Street, Selma, California 93662.)
