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 Recology, Inc.
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 Recology, Inc.:
A) Open public hearing
B) Close public hearing
C) Adopt a resolution approving a plan of finance for the issuance of California Municipal Finance Authority solid waste disposal revenue bonds in an aggregate principal amount not to exceed $20,000,000 for the purpose of financing the acquisition, construction, rehabilitation, renovation, installation, improvement and/or equipping of land, buildings, facilities and/or equipment, including but not limited to the management of capacity for the transfer and processing of municipal solid waste and rolling stock, for the collection, transfer and processing of municipal solid waste, including associated equipment and appurtenances thereto located within the County at 225 Shoreway Road, San Carlos, California, 94070 (collectively, the “Project”).
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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:
Recology Inc., a corporation organized and existing under the laws of the State of California, and/or affiliates thereof (collectively, the “Borrower”), has requested that the Authority participate in the issuance of one or more series of tax-exempt revenue bonds in an aggregate principal amount not to exceed $61,000,000 (the “Bonds”) for qualified solid waste disposal facility projects pursuant to section 142(a)(6) of the Internal Revenue Code of 1986 (the “Code”), from time to time pursuant to a plan of finance for multiple projects, which may occur over a period of multiple years, throughout the State of California.
A portion of the proceeds of such Bonds will be used for the purpose of, among other things, financing, in an amount not expected to exceed $20,000,000, the following projects initially owned by the Borrower and located within the territorial limits of the County: the acquisition, construction, rehabilitation, renovation, installation, improvement and/or equipping of land, buildings, facilities and/or equipment, including but not limited to the management of capacity for the transfer and processing of municipal solid waste and rolling stock, for the collection, transfer and processing of municipal solid waste, including associated equipment and appurtenances thereto located within the County at 225 Shoreway Road, San Carlos, California, 94070 (collectively, the “Project”).
The Project will initially be owned by the Borrower.
The maximum stated principal amount of the Bonds to be used to finance each of multiple projects at different locations in California outside of the County are as follows: (i) Sonoma County, not to exceed $50,000,000; and (ii) Solano County, not to exceed $10,000,000.
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 October 1, 2024, notifying all interested persons that a public hearing would be held on October 8, 2024 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, 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.
FISCAL IMPACT:
The County will receive a portion of the issuance fee from the CMFA. These funds can be used at the County’s discretion. There will be no other fiscal impact to the County associated with any bonds that are authorized or issued by this action.