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Council approves TEFRA hearing finding and resolution to permit tax-exempt bonds for 52-unit Harrington Grove affordable housing
Summary
Council held a TEFRA public hearing and adopted resolution 11,329 approving the issuance of up to $25 million in CMFA exempt facility bonds to finance or refinance Harrington Grove Apartments, a 52-unit rental development for extremely low, very low and low-income households; council clarified the city bears no repayment obligation.
FOLSOM, Calif. — The Folsom City Council on Feb. 25 conducted a TEFRA public hearing and adopted a resolution approving the issuance of tax-exempt revenue bonds by the California Municipal Finance Authority (CMFA) to finance a 52-unit affordable rental development at 791 Harrington Way.
Stephanie Henry of the Community Development Department explained the federal Tax Equity and Fiscal Responsibility Act (TEFRA) requires a public hearing by the jurisdiction where a project financed with tax-exempt debt is located. She said the developer, Pacific West Companies, requested CMFA issue tax-exempt revenue bonds in an amount not to exceed $25,000,000 to finance acquisition, construction and equipping of Harrington Grove Apartments, which will serve extremely low, very low and low-income households.
Henry emphasized the city will have no legal or financial obligation for repayment: “All financing documents will carry disclaimers that the loan is not an obligation of the city. The city will bear no cost in the issuance of the proposed debt.” Representatives from the developer and CMFA — Mike Kelly and Jared Suzuki — were present for questions.
No members of the public requested to speak during the TEFRA hearing. After closing the public hearing, the council voted unanimously to adopt resolution 11,329 approving the issuance of the CMFA bonds under TEFRA procedures.
The city report noted the CMFA is a joint powers authority that assists with issuance of taxable and tax-exempt debt and that the loan will be the borrower’s sole responsibility. The council’s approval was limited to satisfying TEFRA and related California Government Code requirements; the city will not acquire financial liability for the project’s debt.
Staff advised that all financing documents will include disclaimers that the bonds are not obligations of the city and that the city will not bear issuance costs. The CMFA and the developer remain responsible for final financing arrangements and repayment.
