DATE: November 4, 2026
TO: Honorable Mayor and City Councilmembers
FROM: Housing and Neighborhood Services Department
TITLE: APPROVAL OF ISSUANCE OF TAX-EXEMPT REVENUE BONDS BY THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY (THE “CMFA”) TO BENEFIT NORTH COUNTY HEALTH PROJECT INCORPORATED (DBA TRUECARE) FOR CERTAIN HEALTH CARE FACILITIES. ISSUANCE OF THE BONDS BY THE CMFA DOES NOT CONSITUTE A FINANCIAL OR LEGAL LIABILITY OR RESPONSIBILITY FOR THE PROJECT BY THE CITY OF OCEANSIDE.
RECOMMENDATION
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Staff recommends that the City Council:
1) Conduct the public hearing under the requirements of Tax and Equity Fiscal Responsibility Act (TEFRA) and the Internal Revenue Code of 1986, as amended (the “Code”); and
2) Adopt a resolution approving the issuance of qualified 501(c)(3) bonds as defined in Section 145 of the Internal Revenue Code of 1986 (the “Code”) by CMFA for the benefit of North County Health Project Incorporated (the “Borrower” - DBA Truecare), in an aggregate principal amount not to exceed $15,550,000 (the “Bonds”) for the purpose of financing a portion of the costs of the acquisition of certain health care facilities in the City of Oceanside, California (the “City”).
Issuance of the Bonds by CMFA to benefit the Corporation will not constitute a financial or legal liability or responsibility by the City of Oceanside.
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BACKGROUND AND ANALYSIS
North County Health Project Incorporated (dba TrueCare), is a 501(c)(3) nonprofit health care provider serving Oceanside since 1984. TrueCare operates 11 health centers throughout the City, providing medical, dental, behavioral health, and specialty services to approximately 16,400 residents annually, primarily low-income and underserved populations. Through its recent merger with Palomar Family Counseling Service, TrueCare has expanded behavioral health services to 20 Oceanside schools.
TrueCare also provides community-based services through mobile medical and dental units, street medicine, and partnerships with local schools and organizations. These include behavioral health prevention programs for youth, such as Puzzling Minds, which focuses on stress management and emotional well-being.
The California Municipal Finance Authority (“CMFA”), a joint exercise of powers authority and public entity of the State of California, has received a request from TrueCare to serve as the conduit bond issuer of tax-exempt revenue bonds, in an aggregate principal amount not to exceed $15,550,000 (the “Bonds”). The proposed bond financing will support the refinancing and expansion of TrueCare's healthcare facilities in Oceanside. Specifically, the proceeds of the Bonds will be used to finance or refinance the acquisition, construction, installation, equipping or furnishing of the following facilities located in the City in the following maximum amounts:
(a) to refinance TrueCare’s (the “Corporation”’s) obligations under:
(i) that certain Loan Agreement dated as of February 1, 2016, by and among the Corporation, NCHS Loma Alta, a California nonprofit public benefit corporation, City National Bank, and California Enterprise Development Authority, the proceeds of which were used to finance and refinance the acquisition, construction, installation, equipping or furnishing of property owned by the Corporation located at 605 Crouch Street, Oceanside, California, 92054 ($1,800,000);
(ii) that certain Loan Agreement dated as of February 1, 2016, by and among the Corporation, City National Bank, and California Enterprise Development Authority, the proceeds of which were used to finance and refinance the acquisition, construction, installation, equipping or furnishing of property owned by the Corporation located at 605 Crouch Street, Oceanside, California, 92054 ($1,000,000); and
(iii) that certain Loan Agreement dated as of October 1, 2023, by and among TrueCare Property Holdings, LLC, a California limited liability company the sole member of which is the Corporation, CN Financing, Inc., and California Enterprise Development Authority, the proceeds of which were used to finance and refinance the acquisition, construction, installation, equipping or furnishing of property owned by the Corporation located at 3998 Vista Way, Oceanside, California, 92056 ($9,250,000); and
(b) to finance the acquisition, construction, installation, equipping or furnishing of the (i) expansion of a health center (including acute care, chiropractic services and/or medical services facility); (ii) a new women, infants and children (WIC) health center; and (iii) a new musculoskeletal and sports medicine health facility, all located at 3998 Vista Way, Oceanside, California, 92056 ($3,500,000) (collectively, the “Project”).
CALIFORNIA MUNICIPAL FINANCE AUTHORITY
The CMFA was created on January 1, 2004, pursuant to a joint exercise of powers agreement to promote economic, cultural and community development, through the financing of economic development and charitable activities throughout California. To date, over 350 municipalities, including the City of Oceanside, have become members of the CMFA.
The CMFA was formed to assist local governments, non-profit organizations, and businesses with the issuance of taxable and tax-exempt bonds aimed at improving the standard of living in California. The CMFA’s representatives and its Board of Directors have considerable experience in bond financings.
Public Hearing and Resolution
In compliance with Section 147(f) of the Internal Revenue Code of 1986, reflecting the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), a public hearing (the “TEFRA hearing”) must be held to provide the public an opportunity to comment on the use of the tax-exempt funds to finance the Project. Reasonable notice of the TEFRA Hearing to members of the community must be published by the agency conducting the hearing seven days prior to. Although the CMFA will issue the bonds, in order for all or a portion of the Bonds to qualify as tax-exempt bonds, the City Council of the City of Oceanside, as the “applicable elected representative” of the governmental unit hosting the Project must provide its approval of the issuance of the Bonds for the financing of the Project following the close of the TEFRA hearing. As further described below, the City has no financial, legal liability or responsibility for the Project.
On Tuesday, October 27, 2026, a notice was posted on the City’s Legal Notices website normally used to inform the public about public notices at https://www.ci.oceanside.ca.us/residents/city-services/legal-notices, informing the public that a public hearing would be held by the City Council on Wednesday, November 4, 2026 at 6:00 p.m. This public hearing allows for an opportunity for the public to provide comments regarding the issuance of the Bonds and the Project for which Bond funds will be allocated. Following the public comment period and the close of the TEFRA Hearing, the City Council will consider a resolution approving the issuance, sale, and delivery of the Bonds by the CMFA to finance the Project.
Once the City Council adopts the required resolution, no other participation of the City of Oceanside in the bond financing will be required.
§ The debt issued that is financed by the bonds is not debt of the City of Oceanside. All repayment of debt is the strict obligation of the Borrower.
§ All monitoring and administrative actions related to this issuance are the responsibility of the CMFA.
§ The City’s participation in the issuance of these state bonds will not impact the City's appropriation limits and will not constitute any type of indebtedness by the City.
FISCAL IMPACT
There is no fiscal impact to the City of Oceanside for the CMFA to issue the Bonds for the Project. The Bonds to be issued by the CMFA for the Project will be the sole responsibility of the Borrower. As noted above, the City will have no financial, legal, liability or responsibility for the Project or the repayment of the Bonds for the financing of the project. All financing documents with respect to the issuance of the Bonds will contain clear disclaimers that the Bonds are not obligations of the City or the State of California but are to be paid for solely from funds provided by the Borrower.
The Board of Directors of the California Foundation for Stronger Communities, a California non-profit public benefit corporation (the “Foundation”), acts as the Board of Directors for the CMFA. Through its conduit issuance activities, the CMFA shares a portion of the issuance fees it receives with its member communities when it issues bonds and donates a portion of these issuance fees to the Foundation for the support of local charities. The Borrower will be the beneficiary of the CMFA’s charitable donation through a 25% reduction in issuance fees. The City’s minor administrative and staff costs to prepare the reports and related documents required by the Borrower and the CMFA will be reimbursed to the City through a small portion of the bond issuance fee.
COMMISSION OR COMMITTEE REPORT
Not Applicable
CITY ATTORNEY’S ANALYSIS
The supporting documents have been reviewed and approved as to form by the City Attorney.
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Prepared by: Salvador Roman, Senior Management Analyst
Submitted by: Jonathan Borrego, City Manager
ATTACHMENTS:
1. Resolution