Council holds TEFRA hearing, approves CMFA bond issuance for rehabilitation of 48-unit affordable complex
April 30, 2024 | Calistoga, Napa County, California
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The Calistoga City Council conducted a Tax Equity and Fiscal Responsibility Act (TEFRA) public hearing on April 30 regarding proposed tax‑exempt revenue bonds (not to exceed $27,000,000) to finance acquisition, rehabilitation and equipping of a multifamily rental development at 38 Brandon Street in Calistoga.
Jared Suzuki of the California Municipal Finance Authority explained TEFRA requires a public hearing by the jurisdiction in which a project financed with tax‑exempt debt is located. Suzuki said the bonds would be issued by CMFA for the borrower (Bridge Housing) and that the debt would be the sole responsibility of the borrower; the city would not incur legal or financial liability for repayment and would not bear issuance costs.
Bridge Housing's Northern California development lead, Smitha Seshadri, told the council the property (48 units) already serves families and will remain affordable following the rehabilitation. She thanked the city for a prior $250,000 loan made in 1992 and said the project will be regulated as affordable for an additional 55 years after rehab. Seshadri provided the current unit distribution and restrictions: 8 units at 30% area median income (AMI), 12 at 35% AMI, 9 at 50% AMI, 18 at 60% AMI and one manager’s unit; 23 of the 48 units are income‑restricted for low‑income renters at 80% AMI or less under existing restrictions.
Council members asked clarifying questions about AMI bands and whether residents lose housing if household incomes increase; Seshadri replied restrictions and policies allow for household incomes to rise without immediate loss of tenancy and that affordability and monitoring terms will be extended. The vice mayor and others sought assurance that the rehab will keep the project affordable; Seshadri said the regulatory restrictions will be extended for 55 years from project completion.
Councilmember Eisenberg moved to adopt the resolution consenting to issuance of the bonds to satisfy TEFRA requirements; the motion was seconded and adopted by unanimous roll call vote. City staff and CMFA emphasized the action is procedural to meet federal and state requirements and creates no city debt or additional obligation.
The resolution passed at the meeting and will be reflected in the official minutes.
Jared Suzuki of the California Municipal Finance Authority explained TEFRA requires a public hearing by the jurisdiction in which a project financed with tax‑exempt debt is located. Suzuki said the bonds would be issued by CMFA for the borrower (Bridge Housing) and that the debt would be the sole responsibility of the borrower; the city would not incur legal or financial liability for repayment and would not bear issuance costs.
Bridge Housing's Northern California development lead, Smitha Seshadri, told the council the property (48 units) already serves families and will remain affordable following the rehabilitation. She thanked the city for a prior $250,000 loan made in 1992 and said the project will be regulated as affordable for an additional 55 years after rehab. Seshadri provided the current unit distribution and restrictions: 8 units at 30% area median income (AMI), 12 at 35% AMI, 9 at 50% AMI, 18 at 60% AMI and one manager’s unit; 23 of the 48 units are income‑restricted for low‑income renters at 80% AMI or less under existing restrictions.
Council members asked clarifying questions about AMI bands and whether residents lose housing if household incomes increase; Seshadri replied restrictions and policies allow for household incomes to rise without immediate loss of tenancy and that affordability and monitoring terms will be extended. The vice mayor and others sought assurance that the rehab will keep the project affordable; Seshadri said the regulatory restrictions will be extended for 55 years from project completion.
Councilmember Eisenberg moved to adopt the resolution consenting to issuance of the bonds to satisfy TEFRA requirements; the motion was seconded and adopted by unanimous roll call vote. City staff and CMFA emphasized the action is procedural to meet federal and state requirements and creates no city debt or additional obligation.
The resolution passed at the meeting and will be reflected in the official minutes.
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