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a. Conduct a hearing under the requirements of the Tax Equity and Financial Responsibility Act (TEFRA) and the Internal Revenue Code of 1986, as amended for the Community Hospital of the Monterey Peninsula (CHOMP), a California nonprofit public benefit corporation, to finance the construction improvement, renovation, and equipping of certain acute-care hospital facilities and related facilities located within the County of Monterey and certain costs with respect thereto; and
b. Adopt a resolution approving the issuance of up to $35,000,000 in tax-exempt revenue bonds by the California Statewide Communities Development Authority for the benefit of CHOMP, to provide financing for the project
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RECOMMENDATION:
It is recommended that the Board of Supervisors:
a. Conduct a hearing under the requirements of the Tax Equity and Financial Responsibility Act (TEFRA) and the Internal Revenue Code of 1986, as amended for the Community Hospital of the Monterey Peninsula (CHOMP), a California nonprofit public benefit corporation, to refinance the 2003 California Statewide Communities Development Authority issuance which financed the construction improvement, renovation, and equipping of certain acute-care hospital facilities and related facilities located within the County of Monterey and certain costs with respect thereto; and
b. Adopt a resolution approving the issuance of up to $35,000,000 in tax-exempt revenue bonds by the California Statewide Communities Development Authority (CSCDA) for the benefit of the Community Hospital of the Monterey Peninsula (CHOMP), to provide refinancing for the project debt.
SUMMARY:
The Community Hospital of the Monterey Peninsula (CHOMP) is working with the California Statewide Communities Development Authority (CSCDA) to issue up to $35,000,000 of tax-exempt revenue bonds to refinance the 2003 CSCDA debt which constructed improvements, renovations, and equipping of certain acute-care hospital facilities and related facilities located within the County of Monterey and related costs. The recommended actions are required before the CSCDA can proceed.
DISCUSSION:
The Community Hospital of the Monterey Peninsula constructed improvements, renovations, and equipping of acute-care hospital facilities and related facilities located within Monterey County through a tax-exempt financing issued through the CSCDA. Due to market conditions, the original debt can be refinanced to realize substantial savings and to pay certain costs of issuance in connection with the transaction.
In order for the California Statewide Communities Development Authority to issue the refinancing revenue bonds and for the bonds to ultimately qualify for tax-exempt status under the Internal Revenue Code, the local government agency having jurisdiction over the area in which the project is located must hold a properly noticed public hearing pursuant to TEFRA (26 U.S.C 147 (f) and adopt a resolution approving sale of the bonds.
The County of Monterey is a member of CSCDA. The Joint Exercise of Powers Agreement provides that CSCDA is a public entity, separate and apart from each member executing such agreement. The debts, liabilities, and obligations of CSCDA do not constitute debts, liabilities, or obligations of the members executing such agreements.
The bonds issued by CSCDA for the refinancing project will be the sole responsibility of the Borrower and the County will have no financial, legal, moral obligation, liability or responsibility for the Project or the repayment of the Bonds. All financing documents with respect to the issuance of the Bonds will contain clear disclaimers that the Bonds are not obligations of the County or the State of California, but are to be paid for solely from funds provided by the Borrower.
OTHER AGENCY INVOLVEMENT:
County Counsel has reviewed the resolution for conformity with TEFRA.
FINANCING:
The staff cost of processing this request has been financed by Department 1110, Fund 001, Budget Unit 8007 (Auditor-Controller).
Prepared by: Ron Holly, Chief Deputy Auditor-Controller, x5493
Approved by: Michael J. Miller CPA CISA, Auditor-controller, x5303
Attachments:
Resolution