Bentley School, a California not-for-profit corporation, located at 1000 Upper Happy Valley Road in Lafayette has requested that the California Enterprise Development Authority (the "CEDA") participate in the issuance of revenue obligations, in an aggregate principal amount not to exceed $25,000,000 (the "Obligations").
A portion of Obligation proceeds is intended to finance the following: (i) to refinance, through the refunding of certain outstanding tax-exempt revenue bonds previously issued on its behalf, the cost of the construction, improvement and equipping of educational facilities located on its school campus at 1000 Upper Happy Valley Road, Lafayette, California 94549 (the “Project”);
In order for the interest on the Obligations to be excluded from the gross income of the owner of the Obligations (i.e. tax-exempt), an "applicable elected representative" of the government unit must approve the issuance of the Obligations after holding a public hearing ("TEFRA hearing") following reasonable public notice. The proposed issuance by the CEDA is classified as a private activity for purposes of the Internal Revenue Code. Because the CEDA's Board of Directors is not an elected body, the Code provides that a government unit with elected representatives and jurisdiction over the area in which the project to be financed is located, in this case, the Board of Supervisors of Contra Costa County, is an "applicable elected representative" with respect to the issuance.
The Code requires that the Board of Supervisors hold a TEFRA public hearing regarding the issuance of the Obligations and that a resolution approving the issuance of the bonds by the CEDA be adopted. The County is already a member of the CEDA, which allows the CEDA jurisdiction to issue the Obligations. Therefore, staff recommends that the Board of Supervisors hold the public hearing, consider public input, and adopt the resolution regarding the issuance of the Obligations. This approval is with the expressed understanding that the County shall have no obligation whatsoever to pay any principal, interest, fees or any other costs associated with the CEDA's issuance of these Obligations. In addition, the Resolution notes that the County has not participated in a review of the financing documents associated with the issuance.
Conducted a public hearing, as required by Section 147(f) of the Internal Revenue Code of 1986, as amended, to hear and consider information concerning the proposed issuance by the California Enterprise Development Authority of revenue obligations in an aggregate principal amount not to exceed $25,000,000; and
Adopted Resolution No. 2019/519, approving the tax-exempt financing and the issuance of revenue obligations to be issued by the California Enterprise Development Authority to benefit Bentley School (a California not-for-profit corporation).