title
AUTHORIZE THE ISSUANCE OF REVENUE BONDS BY THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY FOR THE PURPOSE OF REFINANCING THE CALIFORNIA EDUCATIONAL FACILITIES AUTHORITY SERIES 2009 AND SERIES 2012 BONDS ISSUED FOR THE UNIVERSITY OF PACIFIC PROJECT
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution:
1. Approving the issuance of revenue bonds by the California Municipal Finance Authority (“CMFA”), a joint exercise of powers authority and public entity of the State of California, in an amount not to exceed $70,000,000 (“Bond”), on behalf of the University of Pacific (“UOP”) for the purpose refinancing the California Educational Facilities Authority series 2009 and series 2012 bonds (“CEFA bonds”) issued for educational facilities ("Project") located at 3601 Pacific Avenue, in the City of Stockton, California.
Note: The bonds will not represent a debt of the City, nor do they obligate the City in any way.
2. It is further recommended that the City Manager, or designee, be authorized to take appropriate actions necessary to carry out the purpose and intent of the resolution.
body
Summary
The University of the Pacific is a California nonprofit public benefit corporation located in the City of Stockton. The refunding of issuance of the Bonds will save in interest rate and/or issuance costs to effect significant public benefits. The proceeds will be used to finance and refinance the acquisition, construction, improvement and equipping of certain educational and related facilities located at the UOP’s Campus in Stockton, California.
The City Council is asked to adopt a resolution that would approve this recommendation. Bonds to be issued by the CMFA for the Project will be the sole responsibility of UOP (“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 or the State of California, but are to be paid for solely from funds provided by the Borrower.
DISCUSSION
Background
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 320 municipalities, including the City of Stockton, 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.
Outside the adoption of the required resolution, no other participation or activity of the City or the City Council with respect to the issuance of the Bonds is required.
Present Situation
UOP, a California nonprofit public benefit corporation, was established as California's first chartered institution of higher learning. The CEFA Bonds to be refunded by the 2020 CMFA Refunding Bonds financed, in part, development of the UOP’s campus in Stockton (the “Project”). The facilities are to be owned and operated by the UOP (see Attachment A for a vicinity map). No additional development is being funded by the 2020 CMFA Refunding Bonds, only refinancing for interest rate savings.
UOP has applied to the Authority requesting the issuance of the 2020 CMFA Refunding Bonds and to loan the proceeds to the UOP to refund the outstanding CEFA Bonds. UOP has requested the issuance of the Bonds by the Authority to take advantage of savings in interest rate and/or issuance costs to effect significant public benefits pursuant to the Act.
The CMFA has requested that the City of Stockton (the “Member”) approve the Project in order to satisfy the requirements of Section 4 of the Joint Exercise of Powers Agreement Relating to the California Municipal Finance Authority (the “Agreement”), which requires the approval of a duly authorized representative of the Member with respect to those components of the Project within the jurisdiction of the Member. City Council has the authority to approve the refinancing of bonds previously approved by the Council by means of a resolution and a Tax Equity and Fiscal Responsibility Act (“TEFRA”) public hearing is not required for this action.
FINANCIAL SUMMARY
The City has no financial liability as a result of approving the issuance of the bonds for UOP. Authorizing the issuance of the bonds does not create any financial obligations, but only serves as a public acknowledgement by the local jurisdiction of the project financing. Due to the City’s membership in CMFA, as part of the issuance of the bonds, dependent on the final bond amount issued, an anticipated amount of $15,000 will be contributed to the City’s general fund.
Attachment A - Vicinity Map