AgdaPkt 2016-09-12 Closed and Joint SA PFA

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in order for the interest on such obligations to be excluded from gross income to investors for federal income tax purposes, the applicable elected representatives of the host governmental unit must approve the issuance of debt. This hearing and approval process is referred to as a "TEFRA" hearing, after the Tax Equity and Fiscal Responsibility Act of 1983, the regulations for which were promulgated under the Tax Code changes of 1986. ANALYSIS Since the project to be financed with the proposed CalPFA revenue bonds is located within Redwood City, the City Council has been asked to conduct the public hearing and to approve the issuance of the revenue bonds as the host governmental unit. Proper notice has been made concerning this hearing. The revenue bonds would be repaid solely from amounts received pursuant to the terms and provisions of the financing agreements to be executed by Anton Redwood Apartments. The City will not be a party to the financing agreements. The revenue bonds would not be secured by any form of taxation or any obligation of either the City or CalPFA. Neither would the obligations represent or constitute a general obligation of the City or CalPFA. Anton Redwood Apartments must indemnify CalPFA, including the City. All legal documents will contain clear disclaimers that the revenue bonds are not obligations of the City or the CalPFA but are paid only from funds provided by the project. As announced in the published notice, the hearing is an opportunity for all interested persons to speak or to submit written comments concerning the proposal to issue the bonds and the nature of the project to be financed. The CalPFA is a political subdivision of the State of California established under the Joint Exercise of Powers Act for the purpose of issuing tax-exempt conduit bonds for public and private entities throughout California. CalPFA is empowered to promote economic, cultural, and community development opportunities that create temporary and permanent jobs, affordable housing, community infrastructure and improve the overall quality of life in local communities. The City must execute a Joint Exercise of Powers Agreement (“JPA”) to become a member of CalPFA in order for the City to qualify as the host governmental unit to approve the issuance of the revenue bonds. Participation by the City will not impact the City’s appropriations limits and will not constitute any type of indebtedness by the City. Once the City holds the required public hearing, adopts the required resolution following the public hearing and executes the JPA, no other participation by the City in the actions of the CalPFA or in the financing will be required. ALTERNATIVES The City Council could decide not to adopt the resolution or execute the JPA which would prevent Anton Redwood Apartments from accessing bond financing to support the development of new affordable housing. 7.C. - Page 2