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HomeMy WebLinkAboutOrd 1986-2139 ReviSed 1/~9/86 ORDINANCE NO. 2139 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ESTABLISHING THE POWER AND PROCEDURES WHEREBY REVENUE BONDS MAY BE DEFEASED AND THE CITY MAY LEASE OR SELL A HEALTH FACILITY The City Council of the City of Chula Vista does hereby ordain as follows: SECTION 1. FINDINGS A. Bay Hospital Medical Center, a California corporation, ("BHMC") owns and operates Bay Hospital Medical Center (the "Hospital") which is located within the jurisdiction of the City. B. BHMC issued "Bay General Community Hospital First Mortgage Hospital Revenue Bonds, Series 1975" (the "Initial Bonds") pursuant to an Indenture, dated as of September 1, 1975, between BHMC and Southern California First National Bank (the "1975 Indenture"). In 1977, BHMC issued tax exempt bonds, designated First Mortgage Hospital Revenue Refunding Bonds, Series 1977 (the "Bonds") pursuant to a Supplemental Indenture of Mortgage and Deed of Trust (the 1975 Indenture as supplemented is referred to as the "Indenture"), on behalf of the City to defease the Initial Bonds and refinance the acquisition, construction and installation of improvements to the Hospital. C. Pursuant to Section 8.03 of the Indenture, the City entered into an agreement with BHMC whereby BHMC granted to the City an option to purchase the Hospital (the "Option to Purchase") at any time following the sale of the Bonds in an amount equal to the redemption price of the Bonds. D. Sections 200 and 1008 of the Charter of the City provide that the City may (i) make and enforce all laws and regulations in respect of municipal affairs, (ii) exercise all rights, powers, privileges and procedures of a municipal corporation under the Constitution and laws of the State of California and (iii) issue bonds, notes or other obligations to finance the acquisition, construction, equipping or improvement of an industrial or commercial facility which will be paid solely out of revenues derived from such facility, without the approval of the voters, provided that the faith and credit and the taxing power of the City or any department of the City is not pledged to pay such bonds, notes or obligations. E. NME Hospitals, Inc. ("NME") has offered to loan the City funds sufficient to defease the Bonds, such loan to be repaid by the City solely out of amounts received from any lease, sale or operation of the Hospital by the City. F. The City desires to implement the powers set forth in its Charter in order to assist BHMC by means of defeasance of the Bonds, the exercise of the Option to Purchase and thereafter to lease or sell the Hospital. SECTION 2. DECLARATION OF NECESSITY The Council hereby finds and declares that it is necessary, essential, a public purpose and a municipal affair for the City to be authorized to provide assistance to BHMC, which provides essential services to the residents of the City. Unless the City intervenes to provide such assistance, BHMC will be forced to default on certain of its obligations and the residents of the City may be forced to pay higher costs for health services. SECTION 3. BORROWING OF FUNDS The City may borrow the funds to defease the bonds, issue a note or other obligation (a "Note" ) evidencing such loan, upon such terms and conditions as the City Council shall deem propar, provided that the Note be payable solely from revenues derived from the lease, sale or operation of the Hospital and provided further that neither the faith and credit nor the taxing power of the City may be pledged to the payment of the Note. The City may pledge revenues derived from the sale, lease or operation of the Hospital to the payment of the Note. SECTION 4. DEFEASANCE The City shall use the proceeds of such loan to defease the Bonds. SECTION 5. PURCHASE OR LEASE OF HOSPITAL FACILITY BY THE CITY The City shall acquire the Hospital by exercising the Option to Purchase under the Indenture and shall accept title to the Hospital. SECTION 6. LEASE OF HOSPITAL The City may sell or lease the Hospital, upon such terms and conditions as the City shall deem proper. SECTION 7. GENERAL A. In addition to all other powers specifically granted by this ordinance, the City may do all things necessary or convenient to carry out the purposes of this ordinance. B. This ordinance, being necessary for the welfare of the City and its inhabitants, shall be liberally construed to effect its purpose. C. If the jurisdiction of the Council to order the proposed act is not affected, any omission of any officer or the City in proceedings under this ordinance or any other defect in the proceedings shall not invalidate such proceedings. D. This ordinance is full authority for the actions to be taken by the City for the purposes specified herein, as it may be supplemented by resolution of the City Council which may be adopted from time to time approving the execution, delivery, performance of any document required to defease the Bonds, resolution to become effective upon passage. 2 E.' Any provisions of the Chula Vista Municipal Code, or appendices thereto, or any other ordinances of the City inconsistent herewith to .the extent of such inconsistencies and no further, are hereby superseded. F. If any section, subsection, sentence, clause or phrase of this ordinance is for any reason held to be invalid or unconstitutional by the decision or any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of the ordinance. The City Council hereby declares that it would have passed this ordinance and each section, subsection, sentence, clause and phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. G. This ordinance shall take effect thirty-one (31) days after the date of its adoption and prior to the expiration of fifteen (15) days from the passage thereof shall be published at least once in a newspaper of general circulation, published and circulated in the City of Chula Vista. Introduced and approved this 28th day of January , 1986. Adopted and passed this 4th day of February , 1986. Mayor of/~hf] City of Chula Vista ATTEST: City'Clerk ._':' ...  i~y tt ~~ WPC 2061H -3- FIRST READ AT A REGULAR MEETING OF THE CITY COUNCIL OF THE C' OF CHULA VISTA, CALI FORN IAj HELD January 28 , 19 86 ,j AND FINALLY PASSED AND ADOPTED AT A REGULAR MEETING THEREOF HELD February 4 ~ 19 86 ~ BY THE FOLLOWING VOTE7 TO-WIT: AYES: Councilmen .. COX, McCANDLISS, MOORE NAYES: Councilmen N ON E ABSTAIN: Councilmen MALCOLM, SCOTT ABSENT: Councilmen NONE Ma~ oTd'h ifff' of Chula Vista STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) ss. CITY OF CHULA VISTA ) I, JENNIE M. FULASZ, CMC, CITY CLERK of the City of Chula Vista, Californio, DO HEREBY CERTIFY thor the above and foregoing is a full, true and correct copy of ORDINANCE NO. 2139 ,ond that the same has not been amended or repeoled. DATED (seal) City Clerk CC-660 ORI3INANCE NO. 2139 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ESTABLISHING THE POWER AND PROCEDURES WHEREBY REVENUE BONDS MAY BE DEFEASED AND THE CITY MAY LEASE OR SELL A HEALTH FACILITY This ordinance was placed on second reading and adoption at the meeting of February 4, 1986 by a vote of 3-0 (Councilmen Scott and Malcolm abstaining). Generally, the ordinance empowers the City to act in relation- ship to a series of transactions affecting Bay Hospital Medical Center. The ordinance declares that it is necessary and a public purpose to provide assistance to Bay Hospital so as to avoid default on their outstanding debts; provides for the City to borrow funds to defease the bonds and pay off the notes; and allows the City to exercise its option to purchase and lease the hospital. Copies of the ordinance are available at the office of the City Clerk, City Hall, 2?6 Fourth Avenue, Chula Vista, CA. Dated: 2/13/86