For City Council Meeting February 11, 2025
TO: Honorable Mayor and City Council
FROM: Tanya Williams, Acting City Manager
AUTHOR: Colby Cataldi, Director of Community Development
Title
Setting a Public Hearing for February 25, 2025, to Conduct a Tax Equity and Fiscal Responsibility Act (TEFRA) Hearing regarding issuance of Tax-Exempt Bonds for Citrus Grove Apartments.
Body
RECOMMENDATION
Staff recommends that the City Council set a public hearing for February 25, 2025, to conduct a TEFRA hearing and consider adoption of a resolution approving the issuance of tax-exempt bonds for the Citrus Grove Apartments project.
BACKGROUND
National Community Renaissance of California (or an affiliate thereof) (the “Borrower”) has requested that the California Statewide Communities Development Authority (“CSCDA”) serve as the municipal issuer of tax-exempt multi-family housing revenue bonds in an aggregate principal amount not to exceed $70,000,000 (the “Bonds”). The proceeds of the Bonds will be used for the purpose of making a loan to the Borrower, to enable the Borrower to finance the acquisition, rehabilitation, improvement and equipping of a 152-unit affordable multifamily housing rental project located at 1432 North Willow Avenue, Rialto, California (the “Project”), which will be owned and operated by the Borrower. On December 6, 2023, the project received an award of private activity bond allocation from the California Debt Limit Allocation Committee.
ANALYSIS/DISCUSSION
In order for all or a portion of the Bonds to qualify as tax-exempt bonds, the City of Rialto (“City”) must conduct a public hearing (the “TEFRA Hearing”) providing 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. Adoption of the resolution is solely for the purposes of satisfying the requirements of the Tax Equity and Fiscal Responsibility Act (TEFRA), the Internal Revenue Code and the California Government Code Section 6500 (and following). 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. The public notice will be issued upon the City Council setting the public hearing.
CSCDA is a joint powers authority sponsored by the League of California Cities ("League") and the California State Association of Counties ("CSAC"). CSCDA was created by the League and CSAC in 1988 to enable local government and eligible private entities access to low-cost, tax-exempt financing for projects that provide a tangible public benefit, contribute to social and economic growth, and improve the overall quality of life in local communities throughout California. CSCDA is comprised of
more than 530 members, including the City of Rialto. CSCDA has issued more than $75 billion through 1,800 plus financings since 1988 and consistently ranks in the top 10 of more than 3,000 nationwide public issuers of tax-exempt debt, as measured by annual issuance amount.
ENVIRONMENTAL IMPACT
The public hearing is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15378(b) (5) of the CEQA Guidelines because the action is a governmental administrative activity that will not result in direct or indirect physical changes in the environment.
GENERAL PLAN CONSISTENCY
The TEFRA Hearing for the proposed project is consistent with Goal 6-2 of the Housing Element of the Rialto General Plan:
Goal 6-2 Promote and encourage housing development that adequately meets the needs of all socioeconomic segments of the community and region.
Policy 6-2.1 Establish incentives and regulatory concessions to promote the development of housing for very low-, low and moderate-income persons, and especially those with special needs.
LEGAL REVIEW
The City Attorney's Office has reviewed the resolution and approved it as to form.
FINANCIAL IMPACT
There is no fiscal impact to the City. The Bonds will be issued as limited obligations of CSCDA, payable solely from revenues and receipts derived from a loan to be made by CSCDA to the Borrower with the Bond proceeds. The City bears no liability with respect to the issuance of the Bonds. Further, the City is not a party to any of the financing documents related to the Bond issuance and is not named in any of the disclosure documents describing the Bonds or the proposed financing.