REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Travis Hopkins, City Manager
VIA: Zack Zithisakthanakul, Acting Chief Financial Officer
PREPARED BY: Zack Zithisakthanakul, Chief Financial Officer
Subject:
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Conduct a Tax Equity and Financial Responsibility Act public hearing and adopt Resolution No. 2026-03 approving, authorizing, and directing execution of a Joint Exercise of Powers Agreement relating to the California Public Finance Authority and approving the Issuance by the California Public Finance Authority of Revenue Bonds in an amount not to exceed $325,000,000 for Marisol HB, LLC, with no City obligations, as well as a Payment in Lieu of Taxes Agreement
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Statement of Issue:
On February 4, 2025, and continued to February 18, 2025, the City Council conducted the required Tax Equity and Financial Responsibility Act (TEFRA) public hearing for the proposed issuance of tax-exempt revenue bonds by the California Public Finance Authority (CalPFA). Following the public hearing, the City Council approved the TEFRA resolution on February 18, 2025, authorizing the issuance of bonds. The February 18, 2025, Request for Council Action (RCA) is attached for reference. That prior action satisfied the federal public approval requirements at the time and did not create any financial obligation or liability for the City.
Pursuant to Internal Revenue Code Section 147(f) and applicable Treasury Regulations, the public approval obtained through the TEFRA hearing and resolution is valid only for a limited period, during which the tax-exempt bonds must be issued. Under established IRS guidance and standard practice, this period is generally treated as not to exceed twelve months. Because the bonds were not issued within that timeframe, the prior TEFRA approval has expired.
Accordingly, staff is returning this item to the City Council to re-conduct the TEFRA public hearing and adopt a new resolution to ree...
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