Special Notice/Hearing: 7 days newspaper publication
per 26 CFR § 1.147(f)-1
Vote Required: Majority
To: Honorable Board of Supervisors
From: John D. Nibbelin, County Attorney
Subject: Public Hearing and Resolution Approving California Municipal Finance Authority Tax-Exempt Bonds for the benefit of Mercy Housing California 121, L.P.
RECOMMENDATION:
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Conduct a public hearing under the Tax Equity and Fiscal Responsibility Act (TEFRA) regarding the issuance of tax-exempt bonds by the California Municipal Finance Authority for the benefit of Mercy Housing California 121, L.P.:
A) Open public hearing
B) Close public hearing
C) Adopt a resolution approving a plan of finance of the issuance of California Municipal Finance Authority revenue bonds in an aggregate principal amount not to exceed $11,000,000 to finance and refinance the acquisition, rehabilitation, development and equipping of a 42-unit qualified residential rental project to be owned and operated by Mercy Housing California 121, L.P. and located at 903 Oceana Boulevard within the City of Pacifica, County of San Mateo, California.
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BACKGROUND:
The California Municipal Finance Authority (the “CMFA” or “Authority”) was created on January 1, 2004 pursuant to a joint exercise of powers agreement (“Agreement”) to promote economic, cultural and community development, through the financing of economic development and charitable activities throughout California. To date, over 350 municipalities, including the County of San Mateo (the “County”), have become members of CMFA.
The Agreement provides that the CMFA is a public entity, separate and apart from each member executing such agreement. The debts, liabilities and obligations of the CMFA do not constitute debts, liabilities or obligations of the members executing such Agreement.
DISCUSSION:
Mercy Housing Calwest, a California nonprofit public benefit corporation (the “Developer”), on behalf of Mercy Housing California 121, L.P., a California limited partnership, or another ownership entity created by Mercy Housing California 121 LLC, a California limited liability company, its general partner (the “General Partner”), or by another affiliate of the Developer (such limited partnership or other ownership entity, the “Borrower”), has requested that the Authority undertake a proposed plan of finance to issue and reissue from time to time one or more series of revenue bonds in an outstanding principal amount not to exceed $11,000,000 (the “Bonds”) to finance and refinance the acquisition, rehabilitation, development and equipping of a 42-unit qualified residential rental project (the “Project”) to be owned and operated by the Borrower and located at 903 Oceana Boulevard within the City of Pacifica, County of San Mateo, California.
In order for all or a portion of the Bonds to qualify as tax-exempt obligations, the County, as the CMFA member within whose jurisdiction the Project is sited, must conduct a public hearing (the “TEFRA Hearing”) to provide the members of the community an opportunity to speak in favor of or against the use of tax-exempt obligations for the financing of the Project. Prior to such TEFRA Hearing, reasonable notice must be provided to the members of the community. A Notice of Public Hearing was published in San Mateo County on or before March 31, 2026, notifying all interested persons that a public hearing would be held on April 7, 2026 by the County for the purpose of approving the financing.
The Bonds to be issued by the CMFA for the 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 for the financing of the Project. All financing documents with respect to the issuance of the Bonds will contain clear disclaimers that the Bonds are not an obligation of the County or the State of California, but are to be paid for solely from funds provided by the Borrower.
Participation by the County in the CMFA will not impact the County’s appropriations limits and will not constitute any type of indebtedness by the County. Outside of holding the TEFRA hearing and adopting the required resolution, no other participation or activity of the County or the Board of Supervisors with respect to the issuance of the Bonds will be required.
COMMUNITY IMPACT:
The issuance of the Bonds will positively impact the community by facilitating the rehabilitation of the Project, which provides affordable housing to members of the community meeting specified income levels.
FISCAL IMPACT:
The Board of Directors of the California Foundation for Stronger Communities, a California non-profit public benefit corporation (the “Foundation”), acts as the Board of Directors for the CMFA. Through its conduit issuance activities, the CMFA shares a portion of the issuance fees it receives with its member communities and donates a portion of these issuance fees to the Foundation for the support of local charities.
The County will receive a portion of the issuance fee from the CMFA. These funds can be used at the County’s discretion for any lawful purpose. There will be no other fiscal impact to the County associated with any bonds that are authorized or issued by this action.