Loading...
HomeMy WebLinkAbout2007-04-24 - AGENDA REPORTS - HMNMH BONDS (2)Agenda Item: CITY OF SANTA CLARITA AGENDA REPORT PUBLIC HEARING City Manager Approval Item to be presented by: Gina Schuchard DATE: April 24, 2007 SUBJECT: ISSUANCE OF BONDS BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY FOR HENRY MAYO NEWHALL MEMORIAL HOSPITAL DEPARTMENT: Administrative Services RECOMMENDED ACTION 1) City Council conduct Public Hearing. 2) City Council adopt a resolution approving the issuance of bonds by the California Statewide Communities Development Authority for Henry Mayo Newhall Memorial Hospital. BACKGROUND The City received request on March 21, 2007 from the California Statewide Communities Development Authority (the "Authority') to conduct a public hearing as required by Section 147(0 of the Internal Revenue Code in order to issue tax-exempt revenue bonds (the "Bonds") in an aggregate amount not to exceed $75 million on behalf of Henry Mayo Newhall Memorial Hospital (the `Borrower'). The Borrower will use the proceeds of the Bonds to finance and reimburse costs used in connection with expansion and infrastructure improvements to its current facility located at 23845 McBean Parkway in the City of Santa Clarita (the "Project"). The proposed improvements and expansion to be financed by the Bonds proposed herein are not included in the proposed Master Plan Development the City Council is currently reviewing. Any approval granted by the City Council with respect to Section 147(f) of the Internal Revenue Code will not constitute approval of the proposed Master Plan Development the City Council is currently reviewing. The Bonds would be tax-exempt private activity bonds for the purposes of the Internal Revenue Code and, as such, require the approval of the elected body of the governmental entity having jurisdiction over the area where the project to be financed is located. The City will not be under any obligation to repay the Bond indebtedness. I OT In order for the Authority to issue such Bonds, the City must 1) conduct a public hearing allowing members of the public to comment on the proposed Project, and 2) approve the Authority's issuance of Bonds on behalf of the proposed financing. Although the Authority (not the City) will be the issuer of the tax-exempt revenue bonds for the Project, the financing cannot proceed without the City becoming a member of the Authority and, as the governmental entity having jurisdiction over the site, approving of the Authority's issuance of indebtedness. The City has been a member of the Authority since July 22, 1993. The City of Santa Clarita has facilitated similar financing in the past for Henry Mayo Newhall Memorial Hospital. On November 2$, 2000, the City Council held a public hearing and adopted Resolution 00-153, approving the issuance of tax exempt obligations by the California Statewide Communities Development Authority, in an amount not to exceed $55 million, for Henry Mayo Newhall Memorial Hospital. The Authority is a California joint exercise of powers authority, organized and existing under the laws of the State of California (specifically, California Government Code Section 6500 and following), and is sponsored by the League of California Cities and the California State Association of Counties. Under the California Government Code, cities and counties are authorized to form by agreement a governmental entity that combines the powers of such entities to perform certain governmental functions specifically outlined in the Agreement. With respect to the Authority, over 460 California cities, counties, and special districts have entered into and executed the Agreement to become a member of the Authority. The Authority is authorized to assist in the financing of 501(c) (3) nonprofit projects. The Borrower's proposed infrastructure improvements include the main pavilion connector, central plant, maintenance building, clinical information system (phases 1 and 2), hospital power distribution, and elevator upgrade. The Borrower's proposed expansion projects to accommodate growth include basement expansion — ER phase II, ER remodel, radiology expansion and remodel, and nuclear medicine equipment replacement. Attachment A includes the infrastructure and growth components of the capital expenditures, the project status, and estimated uses of bond proceeds. ALTERNATIVE ACTIONS Other action as determined by Council. FISCAL IMPACT There is no direct or indirect financial impact to the City of Santa Clarita as a result of this proposed financing. The Authority will issue tax-exempt revenue bonds on behalf of the Project. The tax-exempt revenue bonds are payable solely out of the revenues derived by the Borrower. No financial obligations are placed on the City for project financing costs or debt repayment. ATTACHMENTS Resolution Approving the Issuance of Bonds by the California Statewide Communities Development Authority for Henry Mayo Newhall Memorial Hospital Attachment A - HMNMH Capital Expenditures Funded with Bond Proceeds r. E z x U F F 4 U O O O Nl M O O h M N M N O O tl' Vl M 00 H O1 a\ N r O N O O N O N O N O N i' W W y W W M 1 a N o 0 oo 0 0 00 0 0 0 0 0 0 0 0 o w w w w w N -Zwwz� H O .0 0 0 0 0 r v ami aCi a[i N O U ti a N b b b b b g s a a x X N b b b b b U a P4 r4 U O O O Nl M O O h M N M N O O tl' Vl M omC) H O �D M O O N O O �O � V 0 x M 1 a N U O N -Zwwz� H O � N O U ti N omC) O �D M O O N O O �O � V 0 x M 1 N N � x U O N -Zwwz� H O � ET \ � \ ©Ln k°/ }0bo0 / \\)).2 o�� ® ¥�} c »e mz �E: k \ j � \(%) �Ea \/\-Z5 \ 2 2ZJmQ) 2,