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Council holds TEFRA hearing, authorizes tax‑exempt financing for Saint Margaret's project
Summary
The council opened a TEFRA hearing and unanimously authorized the use of tax‑exempt financing for Saint Margaret's Episcopal School, which expects to issue $55 million in bonds with $23M earmarked for a new commons building to replace Wallace Hall.
The San Juan Capistrano City Council opened a hearing Oct. 7 under the Tax and Equity Fiscal Responsibility Act (TEFRA) and adopted a resolution authorizing the use of tax‑exempt financing for Saint Margaret's Episcopal School.
Ken Alemam, the city’s chief financial officer, told council the school plans to issue $55,000,000 in tax‑exempt bonds. He said $23,000,000 would fund demolition of Wallace Hall and a new 30,000‑square‑foot commons building to house dining, athletics and social gathering; another $23,000,000 would refinance existing debt; and $9,000,000 would fund miscellaneous campus improvements. Alemam emphasized the cooperating local government’s role is informational and that the city bears no liability for debt service. He also said CMFA typically shares a portion of financing fees with the cooperating local agency and the city expects about $10,000–$15,000 in unrestricted receipts after issuance.
No members of the public requested to speak during the TEFRA portion of the hearing. Council opened and closed the public hearing, then voted to adopt the staff recommendation to authorize the city to become a member of the California Municipal Finance Authority (CMFA) and approve the TEFRA resolution. The motion passed unanimously.
Alemam said bond issuance was expected in fall 2025 and reiterated that authorizing the financing does not obligate the city for debt service or create legal recourse against the city in the event of borrower default.
