|
DATE: |
December 10, 2024 |
34 |
SUBJECT:
Title
NOTICED PUBLIC HEARING (TEFRA):
ISSUANCE OF REVENUE OBLIGATIONS BY THE CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY FOR THE BENEFIT OF CENTRO DE SALUD DE LA COMUNIDAD DE SAN YSIDRO, INC. AND/OR A SUCCESSOR ENTITY IN AN AGGREGATE MAXIMUM STATED PRINCIPAL AMOUNT NOT TO EXCEED $180,000,000 (DISTRICTS: 1, 2, 4 AND 5)
Body
OVERVIEW
The County has received a request from the California Enterprise Development Authority (“CEDA” or “Authority”) to conduct a public hearing as required by the Internal Revenue Code and to approve the Authority’s issuance of one or more series of tax-exempt and/or taxable revenue obligations in an aggregate principal amount not to exceed $180,000,000 (the “Revenue Obligations”), for the benefit of Centro De Salud De La Comunidad De San Ysidro, Inc. (the “Borrower”), a California nonprofit public benefit corporation and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986.
The Borrower has applied for the financial assistance of the Authority. The Authority will loan the proceeds of the Revenue Obligations to the Borrower pursuant to one or more loan agreements (the “Loan Agreement”).
The Authority is authorized to assist in financing of nonprofit public benefit organizations or for-profit corporations with a public benefit project wishing to issue or reissue bonds, notes or other evidences of indebtedness, including the Borrower. In order to initiate such a financing, the Borrower is asking the County of San Diego, a member jurisdiction in which the Project is located to: (1) conduct a public hearing to satisfy the public approval requirement of Section 147(f) of the Internal Revenue Code; and (2) approve the Authority’s issuance of the Revenue Obligations. Although the Authority will be the issuer of the Revenue Obligations for the Borrower, the financing cannot proceed without the approval of one of the applicable legislative bodies.
Today’s recommendations will provide the Authority with the required authorization to pursue its determination to issue the Revenue Obligations on behalf of the Borrower. The proceeds of the Revenue Obligations will be applied by the Borrower to support the acquisition, development, furnishing and equipping of the healthcare facilities throughout the County.
RECOMMENDATION(S)
CHIEF ADMINISTRATIVE OFFICER
1. Pursuant to Section 147(f) of the Internal Revenue Code, hold a public hearing regarding the financing of the Project.
2. Adopt a Resolution entitled:
RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF SAN DIEGO APPROVING THE ISSUANCE BY THE CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY OF ITS REVENUE OBLIGATIONS FOR THE BENEFIT OF CENTRO DE SALUD DE LA COMUNIDAD DE SAN YSIDRO, INC. AND/OR A SUCCESSOR ENTITY IN AN AGGREGATE MAXIMUM STATED PRINCIPAL AMOUNT OF $180,000,000 FOR THE PURPOSE OF FINANCING, REFINANCING AND/OR REIMBURSING THE COST OF ACQUISITION, DEVELOPMENT, CONSTRUCTION, IMPROVEMENT, INSTALLATION, FURNISHING AND EQUIPPING OF HEALTHCARE FACILITIES, PROVIDING THE TERMS AND CONDITIONS FOR SUCH REVENUE OBLIGATIONS AND OTHER MATTERS RELATING THERETO
EQUITY IMPACT STATEMENT
The Authority was established to assist in financing of nonprofit public benefit organizations or for-profit corporations with a public benefit project wishing to issue or reissue revenue obligations. The Revenue Obligations issued will be used to finance, refinance and or reimburse the cost of acquisition, construction, installation, furnishing and equipping of property located at the Facilities described above. The Facilities will assist the Borrower with its public benefit mission of providing high quality, compassionate, accessible and affordable health care services for the entire family.
SUSTAINABILITY IMPACT STATEMENT
The proposed action would result in economic, social, health and wellbeing benefits for the community by allowing the Borrower to continue to provide comprehensive and affordable quality healthcare to diverse and underserved communities. The Borrower operates 28 health centers to fully cover the gaps in healthcare services throughout the San Diego County. These centers are located and serve populations in the following ten cities: San Diego (10 centers), Chula Vista (7 centers), National City (3 centers), Escondido (1 center), El Cajon (1 center), Alpine (1 center), Santee (1 center), Campo (1 center), Julian (2 centers) and San Ysidro (1 center). In addition, the Borrower operates a fleet of mobile units that travel across San Diego’s underserved communities to deliver healthcare and wellness classes to residents who would otherwise not have access to these services. The proposed action will contribute to County of San Diego Sustainability Goal No. 2 by providing just and equitable access to healthcare services through increasing investment in underserved communities of San Diego County.
FISCAL IMPACT
If approved, the proposal will result in approximately $991 of unanticipated revenue to be used to reimburse the County for staff time associated with this non-County financing. There will be no change in net General Fund cost and no additional staff years.
The Borrower will be responsible for the payment of all present and future costs in connection with the financing. The County will incur no obligation of indebtedness as a result of these actions.
BUSINESS IMPACT STATEMENT
N/A
Details
ADVISORY BOARD STATEMENT
The Debt Advisory Committee, composed of the Chief Financial Officer, Auditor and Controller, and the Treasurer-Tax Collector, concurs with this recommendation in order to permit the Authority to issue Revenue Obligations on behalf of the Borrower.
BACKGROUND
California Enterprise Development Authority (“Authority”)
The California Enterprise Development Authority provides tax-exempt loans and leases for qualified projects located throughout the State of California. The Authority’s mission is to support economic development, job creation, and social programs throughout the State of California. By assisting nonprofit corporations with various tax-exempt financing programs, the Authority is able to support programs that improve the health and welfare of California residents. The Authority finances a broad range of facilities including nonprofit projects such as education, health care and cultural facilities, affordable multi-family and senior housing, manufacturing facilities and equipment, solid waste, water, wastewater treatment facilities and infrastructure projects and government sponsored financing.
Centro De Salud De La Comunidad De San Ysidro, Inc. (“Borrower”)
The Borrower, a federally funded Community Health Clinic, began operations in 1969 and has served primarily the areas of San Diego, Chula Vista, National City, Escondido, El Cajon, Santee, Campo, Julian, San Ysidro and Alpine. As a private, non-profit 501(c)(3) community health organization, the Borrower serves as a safety net for the community by providing 614,840 medical, dental, and behavioral health visits from 128,158 people annually. The Borrower began as an all-volunteer healthcare clinic in Escondido and now has 28 health centers located throughout San Diego County. The Borrower’s mission is to provide high-quality, accessible, and affordable medical, dental, and behavioral health services.
Project
Public Benefit
The Borrower provides quality health care and promotes wellness to everyone in the communities they serve, focusing on those most in need regardless of the ability to pay. The Borrower provides a variety of support services that help with needs such as food, housing, and transportation. The Borrower also offers health education and care coordination programs that promote healthy lifestyle choices and help patients with their individual healthcare journeys. The Borrower operates a Program of All-Inclusive Care for the Elderly that provides high quality, compassionate care to adults age 55 and older. The Borrower employs approximately 2,728 individuals at its various clinics and administrative facilities.
The proceeds of the Revenue Obligations will be applied by the Borrower to (a) finance, refinance and/or reimburse the Borrower for all or a portion of the cost of the acquisition, development, construction, improvement, installation, furnishing and equipping of the healthcare facilities located at the addresses and in the principal amounts set forth in Exhibit A (the “Facilities”), and (b) pay capitalized interest, costs of issuance and other related transaction costs in connection with the financing (the “Project”).
EXHIBIT A
|
Property Address |
Principal Amount |
|
330-340 E. 8th Street, National City, CA 91950 |
$2,000,000 |
|
4004 Beyer Boulevard, San Diego, CA 92173 |
$3,500,000 |
|
3364 Beyer Boulevard, San Diego, CA 92173 |
$3,800,000 |
|
672,676 and 678 3rd Avenue, Chula Vista, CA 91910 |
$17,000,000 |
|
950 S. Euclid Avenue, San Diego, CA 92114 |
$2,500,000 |
|
2400 E. 8th Street, National City, CA 91950 |
$2,000,000 |
|
1601 Precision Park Place, San Diego, CA 92173 |
$10,000,000 |
|
4050 Beyer Boulevard, San Diego, CA 92154 |
$7,000,000 |
|
880 Third Avenue, Chula Vista, CA 91911 |
$17,500,000 |
|
1604-20 Alpine Boulevard, Alpine, CA 91901 |
$8,500,000 |
|
1388 Buckman Springs Road, Campo, CA 91909 |
$6,000,000 |
|
1656-1666 Precision Park, San Diego, CA 92173 |
$7,500,000 |
|
704 E. Grand Avenue, Escondido, CA 92025 |
$3,500,000 |
|
875 El Cajon Boulevard, El Cajon, CA 92020 |
$24,000,000 |
|
1830-40, 1837 West Drive, Vista CA 92083 |
$18,000,000 |
|
280 E Street, Chula Vista, CA 91910 |
$1,500,000 |
|
2717 A Street, Julian, CA 92036 |
$7,500,000 |
|
3177 Ocean View Boulevard, San Diego, CA 92113 |
$35,000,000 |
County Involvement
Section 147(f) of the Internal Revenue Code requires that an applicable elected body, with respect to the Project, hold a public hearing and approve the issuance and delivery of the Revenue Obligations. The Board of Supervisors of the County of San Diego, as an applicable elected body, is requested to (1) hold a public hearing at which all those interested in speaking with respect to the financing of the Project can be heard and (2) approve the issuance of Revenue Obligations. The Borrower shall be responsible for the payment of all present and future costs in connection with the issuance of the Revenue Obligations.
The Authority will be issuing an aggregate principal amount not to exceed amount of $180,000,000 and is seeking approval pursuant to Section 147(f) of the Internal Revenue Service for the projects located in San Diego County.
LINKAGE TO THE COUNTY OF SAN DIEGO STRATEGIC PLAN
Today’s proposed action supports the Community Strategic Initiative in the County of San Diego’s 2024-2029 Strategic Plan by supporting and allowing the issuance of Revenue Obligations by CEDA for the Borrower to finance the cost of improving and expanding its healthcare facilities.
Respectfully submitted,
ebony n. shelton
Chief Administrative Officer
ATTACHMENT(S)
1. RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF SAN DIEGO APPROVING THE ISSUANCE BY THE CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY OF ITS REVENUE OBLIGATIONS FOR THE BENEFIT OF CENTRO DE SALUD DE LA COMUNIDAD DE SAN YSIDRO, INC. AND/OR a SUCCESSOR ENTITY, IN AN AGGREGATE MAXIMUM STATED PRINCIPAL AMOUNT OF $180,000,000 FOR THE PURPOSE OF FINANCING, REFINANCING AND/OR REIMBURSING THE COST OF ACQUISITION, DEVELOPMENT, CONSTRUCTION, IMPROVEMENT, INSTALLATION, FURNISHING AND EQUIPPING OF HEALTHCARE FACILITIES, PROVIDING THE TERMS AND CONDITIONS FOR SUCH REVENUE OBLIGATIONS AND OTHER MATTERS RELATING THERETO
2. NOTICE OF PUBLIC HEARING WITH RESPECT TO THE ISSUANCE OF TAX-EXEMPT AND/OR TAXABLE REVENUE OBLIGATIONS BY THE CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY FOR THE PURPOSE OF FINANCING, REFINANCING AND/OR REIMBURSING THE COST OF ACQUISITION, DEVELOPMENT, CONSTRUCTION, IMPROVEMENT, INSTALLATION, FURNISHING AND EQUIPPING OF HEALTHCARE FACILITIES FOR THE BENEFIT OF CENTRO DE SALUD DE LA COMUNIDAD DE SAN YSIDRO, INC., AND/OR A RELATED OR SUCCESSOR ENTITY
3. PROJECT APPLICATION FOR BOND FINANCING