PURPOSE:

The purpose of this report is to request Council to approve the California Statewide Communities Development Authority�s (the �Authority�) issuance of tax exempt bonds in an aggregate principal amount not to exceed $45,000,000 for the benefit of the Motion Picture and Television Fund (MPTF).  The reason for this request is one of the MPTF�s facilities, the Toluca Lake Health Center, on Riverside Drive, is located within the Burbank City limits.  The Council is therefore required to adopt a resolution approving the bond refunding, and is a mere formality in order for the MPTF�s bond issuance to proceed.  The bond proceeds will be utilized to refinance existing bonds used for certain healthcare and long-term care treatment facilities throughout Southern California (the �Project�).

BACKGROUND:

The MPTF, a California non-profit corporation, owns and maintains various health care related facilities, primarily for the benefit of those individuals (and their family members) working in the Southern California motion picture and television industries.

On May 7, 1992, the Burbank City Council approved a supplemental bond financing in the amount of $15,000,000 issued by the MPTF through the Authority.  The Authority consists of more than 460 California cities, counties, and special districts, including the City of Burbank[1], and is authorized to assist in the financing and refinancing of facilities for nonprofit organizations, including the MPTF.

The initial $20,000,000 bond issue, which occurred in September 1991, was to provide funds for the construction, renovation, and equipping of certain health care facilities of the MPTF planned to be located in the City of Los Angeles.  In 1992, the outpatient clinic originally planned for the east portion of the San Fernando Valley (within the City of Los Angeles) was relocated to the City of Burbank, specifically at the Toluca Lake Health Center.  The 1991 bond documents were amended to include a supplemental $15,000,000 bond issuance in June 1992.  On December 7, 1993, Burbank City Council further approved MPTF�s request to refund the original bond issues for the purpose of refinancing the existing balance ($35,000,000), plus obtaining additional funds.  The aggregate 1994 bond amount, issued by the Authority in February 1994, was approximately $50,000,000, including approximately $13,000,000 in new funds.

On November 21,[B1]  2005, the MPTF submitted to the Authority an application for the refinancing of the existing debt, not to exceed $45,000,000, with no new funds being generated for MPTF's use.  Staff is therefore requesting Council to approve this latest application.

ANALYSIS:

The proposed bond refinancing will have no fiscal or operational impact on the City.  However, Section 9 of the Authority�s Amended and Restated Joint Exercise of Powers Agreement dated July 1, 1988, of which the City is a participant, requires that if any portion of project is located within the limits of a participant, the participant must grant approval for the financing to proceed.

For the MPTF, the proposed refinancing is anticipated to provide nearly $3,000,000 in present value savings, equal to more than 7% of the refunded principal amount, and to provide annual debt service savings in excess of $200,000.

Pursuant to the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982, each local government, where bond proceeds of a non-profit corporation may be spent, must hold a public hearing and approve the financing.  The public hearing for the 1994 refinancing was held in the City Council Chambers on November 23, 1993 at 10:00 a.m., and no comments were received from those in attendance.  The Council approved Resolution No. 24,082 granting the refinancing.

Because the current proposed refinancing is a refunding of current debt in which the maturity date of the original bonds will not be extended and no new projects will be financed, no public hearing is required (pursuant to bond counsel Orrick, Herrington & Sutcliffe).

FISCAL IMPACT:

There is no fiscal impact to the City.

RECOMMENDATION:

Staff recommends the City Council adopt a resolution approving the refinancing by the California Statewide Communities Development Authority to benefit the Motion Picture and Television Fund.

Attachment:      Amended and Restated Joint Exercise of Powers Agreement Relating to the California Statewide Communities Development Authority dated May 4, 1992

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