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DATE: |
September 27, 2022 |
27 |
SUBJECT
Title
NOTICED PUBLIC HEARING: ISSUANCE OF TAX-EXEMPT AND/OR TAXABLE REVENUE OBLIGATIONS BY THE CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY FOR THE BENEFIT OF PACIFIC RIDGE SCHOOL AND/OR SUCCESSOR ENTITY IN AN AGGREGATE MAXIMUM AMOUNT NOT TO EXCEED $7,500,000 (DISTRICT: 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 revenue obligations in an aggregate principal amount not to exceed $7,500,000 (the “Obligations”), for the benefit of Pacific Ridge School, a California nonprofit public benefit corporation (the “Borrower”). The Borrower has applied for the financial assistance of the Authority. The proceeds of the Obligations will be used to (i) refinance the cost of the acquisition, construction, installation, equipping and furnishing of the educational facilities located at 6269 El Fuerte Street, Carlsbad, California 92009, including, but not limited to, two new buildings containing approximately 45,000 square feet of space to house a new middle school, an arts program, classrooms, administration offices, a gymnasium and other related school facilities (the “Project”). A portion of such proceeds of the Obligations will be used to pay the costs of issuance and other related costs in connection with the financing.
The Authority is authorized to assist in financing for nonprofit public benefit organizations or for-profit corporations with a public benefit project wishing to issue Obligations, 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 resides 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 Obligations. Although the Authority will be the issuer of the Obligations for the Borrower, the financing cannot proceed without the approval of an applicable legislative body.
Today’s recommendations will provide the Authority with the required authorization to pursue its determination to issue the Obligations on behalf of the Borrower for the Project.
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 PACIFIC RIDGE SCHOOL IN AN AGGREGATE MAXIMUM STATED PRINCIPAL AMOUNT OF $7,500,000 FOR THE PURPOSE OF REFINANCING THE COST OF ACQUISITION, CONSTRUCTION, INSTALLATION, EQUIPPING AND FURNISHING OF FACILITIES, PROVIDING THE TERMS AND CONDITIONS FOR SUCH REVENUE OBLIGATIONS AND OTHER MATTERS RELATING THERETO.
EQUITY IMPACT STATEMENT
California Enterprise Development 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 obligations. The Obligations will be used to refinance the cost of acquisition, construction, improvement, furnishing and equipping of the facilities located in San Diego County and pay certain expenses incurred in connection with the issuance of the Obligations. The Obligations will assist the Borrower to continue to provide independent college preparatory education focusing on academic excellence, global engagement, and ethical responsibility to students in grades 7 through 12.
SUSTAINABILITY IMPACT STATEMENT
The proposed action would result in enhanced educational and economic benefits for the community. The proposed action will allow the Borrower to reduce its debt service costs for its capital facilities which would directly translate into additional resources being directed to serve students and increasing employment opportunities and salaries in the community.
FISCAL IMPACT
If approved, the proposal will result in approximately $1,030 of unanticipated revenue to be used to reimburse the County for costs associated with this non-County financing.
The Borrower will be responsible for the payment of all present and future costs in connection with issuance of 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 Deputy Chief Administrative Officer/Chief Financial Officer, Auditor and Controller, and the Treasurer-Tax Collector, concurs with this recommendation.
BACKGROUND
California Enterprise Development Authority (“CEDA”)
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.
Pacific Ridge School (“School” or the “Borrower”)
Pacific Ridge School was established in 2007 by local parents who felt there were limited options for excellent college preparatory education in North San Diego County. Their goal included offering the community an education that focuses on mind and heart and combines academic excellence with ethics, civic responsibility and global engagement.
The commitment of founding families and early board members was instrumental for the success and growth of the School. The School offers middle school, which includes grades 6-8, and an upper college preparatory school for grades 9 through 12. The upper school curriculum offers the best of both traditional and innovative educational practices. A key initiative for the School is the 5-year Strategic Plan introduced in the fall of 2019 to “Cultivate a diverse, empathetic, and inclusive community of learners by fostering a safe environment where all voices feel a sense of value and belonging.”
Through a combination of interactive coursework, educational travel, service projects, and student-led activities, students are empowered to experiment with new ideas and interests, pursue their passions, and develop their voice. An encouraging community behind them connects support with motivation, giving students the opportunity to test and refine their skills through collaboration and dialogue. Whether it’s navigating the bustling streets of an international city or developing a service project for their home community, the School’s students are able to lead their path to learning, confident in the resources and inspiration they are offered along the way.
Project
The proceeds of the Obligations loaned to Borrower will be used to refinance the cost of the acquisition, construction, installation, equipping and furnishing of the educational facilities located at 6269 El Fuerte Street, Carlsbad, California 92009, including, but not limited to, two new buildings containing approximately 45,000 square feet of space to house a new middle school, an arts program, classrooms, administration offices, a gymnasium and other related school facilities.
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 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 the Obligations. The Borrower shall be responsible for the payment of all present and future costs in connection with the issuance of the Obligations.
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 2022-2027 Strategic Plan by supporting and allowing the issuance of Obligations by CEDA for the Borrower to refinance the cost to improve its facilities.
Respectfully submitted,
HELEN N. ROBBINS-MEYER
Chief Administrative Officer
ATTACHMENT(S)
1. County Resolution
2. Notice of Public Hearing
3. CEDA Project Application for Bond