Item 10-A

Council Meeting: July 28, 1998 Santa Monica, California

TO: Mayor and City Council

FROM: City Staff

SUBJECT: Recommendation to Conduct a Public Hearing and Adopt a Resolution Approving the Issuance of Tax Exempt Certificates of Participation for the Crossroads School for Arts and Sciences by the California Statewide Communities Development Authority, Considering the Public Benefits Provided by Crossroads

Introduction

This report recommends that the City Council conduct a public hearing, consider the public benefits provided by Crossroads and adopt the attached Resolution approving the issuance of tax exempt Certificates of Participation by the California Statewide Communities Development Authority (CSCDA) for the Crossroads School for Arts and Sciences (Crossroads) for the financing and refinancing of various educational facilities (Facilities) located within the City of Santa Monica.

Background

The CSCDA is a joint exercise of powers authority consisting of numerous California cities, counties and special districts, including the City of Santa Monica. The CSCDA, pursuant to its Amended and Restated Joint Exercise of Powers Agreement, is authorized to assist in the financing of facilities for non-profit public benefit corporations like Crossroads. In order to initiate such a financing, the member of CSCDA in which the facilities are located must conduct a public hearing and approve CSCDA's issuance of tax exempt indebtedness.

The Crossroads Financing

Crossroads is proposing that CSCDA issue on its behalf up to $8.5 million of tax-exempt Ceritficates of Participation to refinance existing indebtedness on facilities located in the City of Santa Monica, and to finance the construction of new recreational facilities consisting of a gymnasium/sports center/soccer field and swimming pool. At Attachment A are excerpts from Crossroads' application filed with the CSCDA detailing its history, the public benefits associated with the project, and the facilities to be refinanced/financed.

As required by law, this public hearing has been publicly noticed for fourteen days.

Budget/Financial Impact

Approving the issuance of Certificates of Participation by the CSCDA for this project by adopting the attached resolution has no City financial or budgetary impact.

At Attachments B and C are opinions from CSCDA's bond council and the City's financial advisor indicating that the City of Santa Monica would not have any financial liability for the tax exempt Certificates of Participation, nor would any possible subsequent difficulties concerning payment of annual debt service on the Certificates of Participation by Crossroads adversely impact the City's credit ratings.

Recommendation

It is recommended that the City Council conduct a public hearing, consider the public benefits provided by Crossroads and adopt the resolution at Attachment D approving the issuance of Certificates of Participation by the CSCDC for Crossroads for the refinancing and financing of various educational facilities located within the City of Santa Monica.

Attachments (Available in the City Clerk's Office in Santa Monica City Hall):

A - Excerpts from Crossroads Application with the CSCDA

B and C - Opinion of Bond Council and City's Financial Advisor Concerning Bond Risk to City in Approving the Issuance of Certificates of Participation by CSCDA.

D - Resolution of the City Council of the City of Santa Monica Approving an Installment Purchase Financing to be Undertaken by the California Statewide Communities Development Authority to Benefit the Crossroads School for Arts and Sciences

Prepared by: Susan McCarthy, Assistant City Manager

Mike Dennis, Director of Finance

Linda Moxon, Deputy City Attorney