21 - Laserfiche WebLink

BACKGROUND The mission of CSCDA is to provide local governments and private entities access to low-cost, tax-exempt financing for projects that provide a tangible public benefit, contribute to social and economic growth and improve the overall quality of life in local communities throughout California. Currently 469 California public agencies are members, including 58 counties, 331 cities, 63 special districts and 17 redevelopment/water agencies. Any California city, county or special district is eligible to become a member of CSCDA by governing board adoption of a resolution and joint powers agreement. The City of Pleasanton has been a member since the mid 1990's. CSCDA has issued more than $25 billion in tax-exempt bonds since its inception. CSCDA issues Qualified 501(c)(3) Bonds to finance/refinance the acquisition, construction, installation, expansion or rehabilitation of land, buildings, and equipment to be owned by a nonprofit organization as described under Section 501(c)(3) of the Internal Revenue Code of 1986 (including religious, charitable, scientific, testing for public safety, literary or educational purposes). The interest on the Bonds is exempt from federal income taxes; therefore, a nonprofit organization can finance capital projects at a lower interest rate than conventional financing. The Bonds are limited obligations of CSCDA, serving as conduit issuer, payable solely from revenues or other funds provided by the nonprofit organization. Since its inception, CSCDA has issued more than $10 billion in Qualified 501(c)(3) bonds for more than 250 nonprofit organizations throughout California including: • Hospital and mental health facilities Private colleges, universities, and K-12 schools • Student dormitories • Multifamily housing facilities • Assisted living facilities • Substance abuse centers DISCUSSION ValleyCare Health Systems (ValleyCare) is a 501(c)(3) nonprofit corporation with facilities in Pleasanton and Livermore (Attachment 2 provides a ValleyCare Health System Community Benefit Report). Pleasanton facilities include ValleyCare Medical Center located at 5555 W. Las Positas Blvd. and ValleyCare Medical Plaza located at 5725 W. Las Positas Blvd. ValleyCare has submitted an application to CSCDA (Attachment 3) to issue up to $85 million in revenue bonds. The application indicates that approximately $60 million in tax-exempt revenue bond proceeds will be used to refinance four (4) existing bond issues. In addition, approximately $23 million in taxable bond proceeds will be used to (1) terminate the Health System's Defined Benefit Pension Plan ($13 million) and (2) provide three years of working capital ($10 million). The Defined Benefit Pension Plan is being replaced with a Defined Contribution Plan (ValleyCare will contribute the employee share under the new program). The $13 million in taxable bond proceeds will be combined with existing monies in the prior plan and an annuity will be purchased to maintain vested rights under the old plan. Page 2 of 4