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Board holds TEFRA hearing and approves up to $42 million in CMFA revenue bonds for North Bay Health project
Summary
The board conducted a TEFRA public hearing and approved a resolution allowing the California Municipal Finance Authority to issue up to $42,000,000 in tax-exempt revenue bonds for North Bay Health to refinance a recent taxable loan used to acquire land and a building in Fairfield.
The Solano County Board of Supervisors held the required TEFRA public hearing and approved a resolution authorizing issuance of tax-exempt revenue bonds by the California Municipal Finance Authority (CMFA) not to exceed $42,000,000 for North Bay Health, county officials said.
Chuck Lomelli, identified as the county treasurer-tax collector and county clerk, explained that a TEFRA (Tax Equity and Fiscal Responsibility Act of 1982) hearing is required when tax-exempt bonds underwritten by a 501(c)(3) entity are issued for a project within a county; the county itself will have no legal or financial obligation for repayment of the bonds. The bonds will be used to refinance a previously issued taxable loan for the purchase of roughly 30 acres in the Suisun Valley Business Center area and a 72,000-square-foot building at 360 Campus Road in Fairfield, Lomelli said.
Joseph DeAngi, identified as chief financial officer of North Bay Health, said the 30-acre parcel is former truck-stop property on the east side of Suisun Valley Road and the 72,000-square-foot office building across Business Center Drive is vacant. North Bay Health purchased the land earlier in the year with taxable financing and is seeking tax-exempt refinancing through CMFA to improve financing costs; DeAngi described the purchase as part of a longer-term facility master plan and said the health system is evaluating potential healthcare operations for the site.
DeAngi told the board North Bay's finances improved from a negative operating margin in 2022 to a modest positive margin in 2023 and further improvement in 2024 (unaudited), and that the refinancing would support strategic growth and reinvestment. The presentation stated Bank of America has agreed to purchase the bonds.
Action: The board conducted the TEFRA hearing and then voted to approve the resolution allowing issuance of revenue bonds by CMFA not to exceed $42,000,000. A motion and second were recorded and the matter advanced in the meeting.
Ending: The board approved the TEFRA finding and resolution; county officials noted the county bears no repayment responsibility for the bonds and the financing will be private debt for the nonprofit health system.
