HomeMy WebLinkAbout2013-11-26 - AGENDA REPORTS - ISSUANCE OF BONDS HENRY MAYO (2)PUBLIC HEARING
DATE:
SUBJECT:
DEPARTMENT:
Agenda Item: 11
CITY OF SANTA CLARITA
AGENDA REPORT
City Manager Approval
Item to be presented by:
November 26, 2013
Darren HernAndez
ISSUANCE OF BONDS BY THE CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY FOR HENRY
MAYO NEWHALL MEMORIAL HOSPITAL
Administrative Services
RECOMMENDED ACTION
City Council conduct a public hearing and 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 a request from the California Statewide Communities Development Authority
(the "Authority") to conduct a public hearing under and in accordance with Section 147(f) of the
Internal Revenue Code in order to issue tax-exempt revenue bonds (the `Bonds") in an aggregate
amount not to exceed $175 million on behalf of Henry Mayo Newhall Memorial Hospital (the
`Borrower"). The Borrower will use the proceeds of the Bonds to refund the Borrower's 2001A
Bonds and all or part of the Borrower's 2007A Bonds and 2007B Bonds, and to finance and
reimburse costs used in connection with the acquisition, construction, improvement, and
equipping of its facilities located at 23845 McBean Parkway, 23833 McBean Parkway, 23701
McBean Parkway, and 25727 McBean Parkway in the City of Santa Clarita.
The proposed improvements and expansion to be financed by the Bonds proposed herein (the
"Project") are in the Master Plan Development the City Council approved on December 9, 2008.
The Bonds would be tax-exempt private activity bonds for 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 approval and adoption
of the resolution authorizing the issuance of the Bonds will not require the City to be financially
Adonfc�.
obligated, liable, or provide any financing for the Project. The City's credit and bond ratings are
not at risk by adopting this resolution; no City revenues are at risk by this bond issuance.
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 being 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 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 (the "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 projects of organizations that are exempt
under Section 501(c)(3) of the Internal Revenue Code.
The City of Santa Clarita has facilitated similar financings in the past for Henry Mayo Newhall
Memorial Hospital. On November 28, 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 Authority, in an amount not to exceed $55 million for Henry Mayo Newhall
Memorial Hospital. On April 24, 2007, the City Council held a public hearing and adopted
Resolution 07-24, approving the issuance of tax-exempt obligations by the California Statewide
Communities Authority, in an amount not to exceed $75 million for Henry Mayo Newhall
Memorial Hospital.
The Borrower's proposed growth and infrastructure improvements include purchase of medical
imaging equipment, power system upgrades, expansion of parking, remodeling of case
management space, tenant improvement of administrative space, and other routine capital
expenditures. It also includes funding of approximately $12.5 million of predevelopment costs of
a new 120 -bed tower (the "New Tower Project"), which is part of the Master Plan Development
that was approved by the City Council. Funding of the remaining costs associated with the New
Tower Project is not part of this financing request. Attachment A includes a list of estimated
sources and uses of bond proceeds, capital expenditures, and project status.
ALTERNATIVE ACTIONS
Other action as determined by City 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 from the Borrower.
No financial obligations are placed on the City for project financing costs or debt repayment.
ATTACHMENTS
Notice of Public Hearing
Attachment A - Capital Expenditures Funded with Bond Proceeds
Resolution - Approving the Issuance of Bonds by the CSCDA for Henry Mayo Newhall
Memorial Hospital
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CITY OF SANTA CLARITA
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NOTICE IS HEREBY GIVEN:
A Public Hearing as required by Section 147(0 of the Internal Revenue Code of 1986, as
amended (the "Code"), will be held before the City Council of the City of Santa Clarita in the
City Hall Council Chambers, 23920 Valencia Boulevard, la floor, Santa Clarita, California, on
the 26°i day of November 2013, at or after 6:00 p.m., to consider the proposed issuance by the
California Statewide Communities Development Authority of its revenue bonds, in one or more
series from time to time, as part of a plan of finance, in an aggregate amount not to exceed
$175,000,000 (the `Bonds"). The proceeds of the Bonds will be used to, among other things,
finance and refinance the acquisition, construction, improvement and equipping of health and
related facilities located at 23845 McBean Parkway, 23833 McBean Parkway, 23701 McBean
Parkway and 25727 McBean Parkway, a medical office building to be located between the
existing parking structure on McBean Parkway and Avenida Navarre, and a new parking
structure to be located underground on the corner of McBean Parkway and The Orchard Village
entrance to the hospital, each in the community of Valencia in the City of Santa Clarita,
California 91355-2083 (collectively, the "Facilities"). The Facilities are to be used in an
integrated operation, and are owned and operated by the Henry Mayo Newhall Memorial
Hospital, a nonprofit public benefit corporation and an organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986.
Any interested persons wishing to express their views on the issuance of the Bonds or on the
nature and location of the Facilities proposed to be financed and refinanced may appear and be
heard on this matter at that time or, prior to the time of the hearing, submit written comments to
Administrative Services Department, Santa Clarita City Hall, 23920 Valencia Boulevard,
Suite 295, Santa Clarita, California 91355.
Dated: November 12, 2013
Armin Chaparyan
Interim City Clerk
Publish Date: November 12, 2013
OHSUSA:754832643.5
Henry Mayo Newhall Memorial Hospital
Attachment A
Estimated Sources and Uses (t)
Sources
Bond Proceeds $ 175,000,000
Prior Bond Funds 12,000,000
Hospital Contribution 5,946,000
$ 192,946,000
Uses:
Estimate
Prior Bond Defeasance
$ 121,725,000
Project Fund
67,361,000
Bond Insurance
1,725,000
Cost of Issuance
2,135,000
2,000,000
$ 192,946,000
Capital Expenditures Funded with Bond Proceeds (2)
Projects
Estimate
Status
MOB -1 Education Center and Administrative Office TI's
$ 9,700,000
Plan and bid package submitted
MRI
4,000,000
Planning stage
DaVinci Surgical Robot
2,000,000
Planning stage
Ci Scanner
2,500,000
Planning stage
Case Management Remodel
580,000
In process, est. completion in Dec 2013
BHU Safety Upgrade
341,000
In process, est. complete Q2 2014
New Tower - Predevelopment
12,500,000
Final contract review and process
Power Upgrade
340,000
Est. completion mid 2014
Parking - PS -4 Expansion
9,400,000
Contract issued and predevelopment work in process
Routine Capital (2013-2015)
26,000,000
$ 67,361,000
(1)Preliminary - Subject toChange
V(2) Source: Henry Mayo Newhall Memorial Hospital management (as of October 21, 2013)
RESOLUTION 13-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA,
CALIFORNIA, APPROVING THE ISSUANCE BY THE CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY OF ITS REVENUE BONDS (HENRY
MAYO NEWHALL MEMORIAL HOSPITAL), IN ONE OR MORE SERIES FROM TIME TO
TIME, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $175,000,000 FOR
THE PURPOSE OF FINANCING AND REFINANCING THE ACQUISITION,
CONSTRUCTION, IMPROVEMENT, AND EQUIPPING OF HEALTH AND RELATED
FACILITIES AND CERTAIN OTHER MATTERS RELATING THERETO
WHEREAS, Henry Mayo Newhall Memorial Hospital, a California nonprofit public
benefit corporation (the "Corporation'), has requested that the California Statewide Communities
Development Authority (the "Authority") participate in the issuance of one or more series of
revenue bonds in an aggregate principal amount not to exceed $175,000,000 (the "Bonds") to
finance and refinance the costs of the acquisition, construction, improvement, and equipping of
certain health and related facilities of the Corporation (the "Project"); and
WHEREAS, the Project to be financed and refinanced with the proceeds of the Bonds are
or will be owned and operated by the Corporation and located within the City of Santa Clarita
(the "City"); and
WHEREAS, pursuant to Section 147(f) of the Internal Revenue Code of 1986, as
amended (the "Code"), the issuance of the Bonds by the Authority must be approved by the City,
because the Project is located within the territorial limits of the City; and
WHEREAS, the City Council of the City (the "City Council") is the elected legislative
body of the City and is one of the applicable elected representatives required to approve the
issuance of the Bonds under Section 147(f) of the Code; and
WHEREAS, the Authority has requested that the City Council approve the issuance of
the Bonds by the Authority in order to satisfy the public approval requirement of Section 147(f)
of the Code and the requirements of Section 9 of the Amended and Restated Joint Exercise of
Powers Agreement, dated as of June 1, 1988 (the "Agreement"), among certain local agencies,
including the City; and
WHEREAS, the Authority is also requesting that the City Council approve the issuance
of any refunding bonds, in one or more series from time to time, hereafter issued by the Authority
for the purpose of refinancing bonds which financed or refinanced the Project (the "Refunding
Bonds"), but only in such cases where federal tax law would not require additional consideration
or approval by the City Council; and
WHEREAS, pursuant to Section 147(f) of the Code, the City Council has, following
notice duly given, held a public hearing regarding the issuance of the Bonds, and now desires to
approve the issuance of the Bonds by the Authority; and
NOW, THEREFORE, the City Council of the City of Santa Clarita, California does
hereby resolve as follows:
SECTION 1. The City Council hereby approves the issuance, sale, execution and
delivery of the Bonds and the Refunding Bonds, in one or more series from time to time, by the
Authority. It is the purpose and intent of the City Council that this Resolution constitute
approval of the issuance of the Bonds and the Refunding Bonds, in one or more series from time
to time, by the Authority for the purposes of (a) Section 147(f) of the Code by the applicable
elected representatives of the governmental unit having jurisdiction over the area in which the
Project is located, in accordance with said Section 147(f) and (b) Section 9 of the Agreement.
SECTION 2. The officers of the City are hereby authorized and directed, jointly and
severally, to do any and all things and to execute and deliver any and all documents which they
deem necessary or advisable in order to carry out, give effect to, and comply with the terms and
intent of this Resolution and the financing transaction approved hereby.
SECTION 3. This Resolution shall take effect immediately upon its adoption.
SECTION 4. The City Clerk shall certify to the adoption of this Resolution.
PASSED, APPROVED, AND ADOPTED this 26th day of November, 2013.
MAYOR
ATTEST:
INTERIM CITY CLERK
DATE:
STATE OF CALIFORNIA
)
COUNTY OF LOS ANGELES
) ss.
CITY OF SANTA CLARITA
)
I, Armine Chaparyan, Interim City Clerk of the City of Santa Clarita, do hereby certify
that the foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita at
a regular meeting thereof, held on the 26th day of November 2013, by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
INTERIM CITY CLERK