RECOMMENDATION(S): (CONT'D)
2) for purposes of Section 147(f) of the Internal Revenue Code of 1986, authorizing the issuance of Multifamily Housing Revenue Bonds (the "Bonds") to finance the costs of the acquisition and rehabilitation of the Development subject to Board of Supervisors approval of all documents related to the Bonds to which the County is a party;
3) for Board Resolution No. 2019/568 approved at the September 24, 2019 meeting, amending the maximum principal amount of the bonds for the Development from $25,000,000 to $33,000,000;
4) acknowledging that the adoption of this resolution does not relieve or exempt the borrower from obtaining required permits or approvals, nor obligate the County to incur any obligation or provide financial assistance with respect to the Bonds or the Development; and
5) authorizing and directing any authorized officer of the County to do any and all things, take any and all actions, and execute and deliver any and all certificates, agreements, and other documents, which the officer may deem necessary or advisable in order to effectuate the intent of the Resolution.
FISCAL IMPACT:
No impact to the General Fund. In the event that the bonds are issued, the County is reimbursed for costs incurred in the issuance process. Annual expenses for monitoring of Regulatory Agreement provisions are provided for in the bond issue. The bonds will be secured solely by revenues (e.g. rents, reserves, etc.) pledged under the bond documents. No County funds are pledged to secure the bonds.
BACKGROUND:
Contra Costa County, through the Conservation and Development Department, operates a multifamily housing revenue bond financing program. The purpose of the program is to increase or preserve the supply of affordable rental housing available to lower income households and very low income households. The County program may be undertaken within the unincorporated County and within the cities.
The recommended action is the adoption of a Tax Equity and Fiscal Responsibility Act (TEFRA) Resolution by the Board, as the legislative body of the County, authorizing the issuance of Multifamily Housing Revenue Bonds, which will be used to finance the acquisition and rehabilitation of Coggins Square Apartments, an 87-unit residential rental housing development located at 1316 Las Juntas Way in the unincorporated area of the County near Walnut Creek (the "Development"). Coggins Square Apartments, L.P. will be the ownership entity, which is comprised of BRIDGE Housing, or an affiliate, as the managing general partner and to-be-named tax credit equity investor. The partnership proposes the use of housing revenue bonds to refinance and rehabilitate the Development, and extend the affordability term to 2075. All of the units will be reserved for families at or below 60% of the area median income, with sixteen units reserved for extremely low income households earning at or below 30% of the area median income. The proposed financing would implement County policies to increase the supply of affordable housing. The main purpose of the proposed Resolution is to acknowledge that a public hearing was held by the Affordable Housing Program Manager on September 30, 2019, with no public comment, and to meet other bond issuance requirements, which are specified in Section 147(f) of the Internal Revenue Code.
The Resolution also revises Reimbursement Resolution No. 2019/567 approved by the Board of Supervisors at its September 24, 2019 meeting. The Reimbursement Resolution conditionally provided for the issuance of housing revenue bonds in a principal amount not to exceed $25,000,000. This resolution revises the maximum principal amount of the bonds to $33,000,000.
The proposed bonds cannot be issued until a separate, future resolution is adopted by the Board of Supervisors specifically authorizing the sale of the bonds. Such separate resolution to authorize the sale of bonds would come before the Board after receipt of an allocation from the State of California for Private Activity Bond Authority. An application for Private Activity Bond Authority will be submitted to the California Debt Limit Allocation Committee on October 11, 2019. The expected timing for a Bond Sale Resolution would be March, 2020.
The proposed resolution would not relieve the Borrower from obtaining other required permits or approvals required by law, nor obligate the County to incur any obligation or provide financial assistance with respect to the Bonds or the Project. Annual expenses of the County related to the monitoring of the Regulatory Agreement are provided for in the bond issue.
CONSEQUENCE OF NEGATIVE ACTION:
Negative action would prevent the County from meeting the public approval requirement of the Internal Revenue Code for issuing Multifamily Housing Revenue Bonds, and prior actions of officers and agents of the County would not be confirmed and ratified. As a result the Multifamily Housing Revenue Bonds could not be issued by the County.
CHILDREN'S IMPACT STATEMENT:
The recommendation supports one or more of the following children's outcomes: (1) Children Ready for and Succeeding in School; (2) Children and Youth Healthy and Preparing for Productive Adulthood; (3) Families that are Economically Self Sufficient; (4) Families that are Safe, Stable and Nurturing; and (5) Communities that are Safe and Provide a High Quality of Life for Children and Families.