HomeMy WebLinkAboutReso 1978-9154
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RESOLUTION NO . y ~, J `t
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
RF,~,C.INI~INC; RESOLUTION NO. 9021 AND ADOPTING REVISED PRO-
GRAM OF APPROVING ITS OBLIGATIONS lU REFUND ITS OUT-
STANDING OBLIGATIONS AND TO PROVIDE NEjJt10NEY,
APPROVING hTS ARTICLES OF INCORPOR.~TION AND BYLAWS, AS
Ai~NDED, AND ACCEPTING THE GIFT OF A PROJECT FINANCED
BY SUCH OBLIGATIONS.
WHEREAS, pursuant to Resolution No. 5966 adopted on March 2,
1971, Resolution P1o. 6688 adopted on December 1~, 1g72, and Resolution
No. 6761 adopted on February 27, 1973, the City Council. of the City of
Chula Vista approved the organization of Community Hospital of Chula Vista,
a California non-profit corporation (the"Corporation"), amendmenr.s to its
Articles of Incorporation and Bylaws and the issuance of its }iospital Gross
Revenue Bonds and its Hospital Subordinated Limited Revenue Notes; and
WHEREAS, pursuant to said resolutions, the Corporation issued its
Hospital Gross Revenue Bonds (the "Outstanding Bonds"), in the principal
amount of $7,575,000, all of which remain outstanding, and its Hospital
Subordinated Limited Revenue Notes (the "Outstandi_ng Notes"), in the
principal amount of $1,500,000, of which $1,645,000 remain outstanding, all
on behalf of the City for the purpose of financing the construction of a
hospital facility; and
WHEREAS, its Articles of Incorporation were in fact amended and
were filed with the Secretary of State of the State of California on
rlarch 1, 1973, and with the Clerk of San Diego County, State of California,
on March 2, 1973, which amendment completely restated the Articles of
Incorporation of the Corporation; and
WHEREAS, such amended Articles provide in pertinent part upon the
retirement of any indebtedness incurred to construct any buildings,
structures or facilities and to acquire any real property upon which such
buildings, structures and facilities shall have been constructed, the
Corporation will transfer, or will provide for the transfer of, all right,
title and interest in and to said buildings, structures and facilities and
the real property upon which the same shall have been constructed to the
City of Chula Vista, and that the City nay require the Corporation to
retire or pay any such indebtedness at any time if the City furnishes the
Corporation (or the trustee under any indenture for such indebtedness) with
the necessary funds therefor; and
WHEREAS, a portion of the proceeds of the Outstanding Bonds and
Notes (in the amount of approximately $118,000) were used to retire
indebtedness with respect to a parcel of land constituting not only the
site of the hospital facility, but also the surrounding property;
WHEREAS, it was intended that only the site of the hospital
facility would be financed from proceeds of the Outstanding Bonds and Notes
and that certain surrounding surplus property would not be so financed,
and, accordingly, any proceeds used with respect to such surrounding
property shall be considered a reimbursement to the Corporation for the
cost of the site; and
WHEREAS, its Bylaws were in fact so amended and have subsequently
been amended by the Corporation; and
WHEREAS, the Outstanding Bonds were issued pursuant to an
Indenture of Mortgage and Deed of Trust (the "Outstanding Bond Indenture")
and the Outstanding Motes were issued pursuant to an Indenture, which leas
subsequently been amended by a Supplemental Indenture, and the Corporation
has filed copies of the foregoing with the City Clerk; and
WHEREAS, the Corporation has proposed certain changes to the
Outstanding Notes and has filed with the City Clerk a proposed (draft of
2-10-78) First Supplemental Indenture of Mortgage and Deed of Trust re-
lating to the Outstanding Bonds and a proposed (draft of 3-31-78) Second
Supplemental Indenture relating to the Outstanding Notes; and
WHEREAS, the Corporation has caused to be constructed a 131-bed
hospital facility, and it will be necessary from time to time to make
improvements to said hospital and to provide for the acquisition of
additional equipment; and
WHEREAS, the Outstanding Bond Indenture contains various
unworkable and oppressive covenants; and
WHEREAS, the Corporation desires to acquire and finance certain
additional personal property on behalf of the City; and
WHEREAS, pursuant to an Indenture of Mortgage and Deed of
Trust (the "Indenture") the Corporation desires to issue its Hospital
Facility First Mortgage Refunding Bonds (the "Refunding Bonds'` to
refund its existing indebtedness represented by the Outstanding Bonds
and Notes .and to obtain additional long-term financing for the
acquisition of personal property; and
WHEREAS, the refunding will relieve the Corporation of unworkable
and oppressive covenants under the Outstanding Bond In~enture; and
WHEREAS, the Corporation desires to provide additional clarifi-
cation as to transfer of legal title to the hospital facility upon the
retirement of the Refunding Bonds, but the issuance of the Refunding Bonds
will not postpone the transfer of legal title Co the hospital facility to
the City beyond the time now scheduled for the retirement of the
Outstanding Bonds and Notes on January 1, 2008; and
WHEREAS, the Corporation has previously presented to this
Council a proposal to refund its existing indebtedness represented by
the Outstanding Bonds and Notes and to finance the acquisition of certain
additional personal property on behalf of the City; and
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WHEREAS, pursuant to Resolution No. 9021 adopted on
March 14, 1978, this Council approved various matters relating to the
Corporation, the Project and the. proposed Refunding Bonds; and
WHEREAS, subsequent to the adoption of such Resolution by
this Council changes in market conditions have made it necessary to
revise the proposal for refunding the existing indebtedness of the
Corporation, the terms of the Refunding Bonds, the interest rates
thereon and various other matters in connection therewith; and
WHEREAS, the Corporation has filed with the City Clerk its
amended Articles of Incorporation certified by the California Secretary
of State, its Bylaws, as amended to date and certified by its Secretary,
a draft (3-24-78) of the Indenture (containing forms of the Refunding
Bonds to be issued thereunder), a draft (2-16-78) of a Deed and Bill of
Sale, to be executed by the Corporation and delivered and held in escrow
and delivered to the City when the Refunding Bonds are retired, and
copies of the Preliminary Official Statement dated May 16, 1978 by which
the Refunding Bonds will be offered, explaining the refunding
transactions; and
WHEREAS, pursuant to the Indenture for the Refunding Bonds
the City will have the sole and exclusive option to purchase all r.i.ght,
title and interest of the Corporation in the Project (as defined
therein) at any time for an amount sufficient to discharge the entire
indebtedness represented by the Refunding Bonds; and
WHEREAS, the ownership and operation of the hospital facility by
the Corporation is necessary and beneficial to the quality of health care.
provided to the citizens of the City and its environs and it i.s in the best
interests of the City to take steps as are necessary to maintain and
upgrade the Project, to reduce the casts of borrowing and to eliminate
unworkable and oppressive covenants; and
WHEREAS, the City will have a beneficial interest in the Project
and the Corporation while the Refunding Bonds remain outstanding; and
WHEREAS, the City will obtain full Legal Citle to the Project
upon retirement of the Refunding Bonds; and
W~IEREAS, the Deed and Bill of Sale will be delivered out_ of
escrow when the Refunding Bonds have been retired to provide for transfer
of full legal title to the hospital site (but not surrounding real
property), the improvements thereon and the tangible personal property
therein contained; and
WHEREAS, there are sufficient assurances that the City will
obtain an operational hospital at the time the Refunding Bonds are paid off
in that the Corporation covenants to maintain the hospital; real property
constituting the hospital facility may not be sold; on dissolution of the
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Corporation any remaining assets of the Corporation will be transferred to
the City; and the Deed and Bill of Sale requires that the City receive not
only the real property constituting the Project but also any tangible
personal property situated therein at the time of delivery of the Deed and
Bill of Sale (subject to any outstanding security interest in such personal
property); and
WHEREAS, the principal amounts of and interest rates on the
Refunding Bonds are dependent upon market conditions; and
WHEREAS, drafts of the Indenture and the Deed and Bill of Sale
contain blanks to be filled in and may be changed prior to delivery of the
Refunding Bonds as may be necessary in connection with the issuance of the
Refunding Bonds, and copies of the final forms of such documents shall be
filed with the City Clerk; and
WHEREAS, approval of the Refunding Bonds and the other actions
taken hereby will not impose any obligation or burden upon the City prior
to the vesting of title to the Project in the City.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Chula Vista as follows:
Section 1. This Council.hereby rescinds in its entirety
Resolution No. 9021, adopted on March 14, 1978.
Section 2. This Council hereby finds and determines that the
interests of the City and its citizens will be served by the refunding of
the Outstanding Bonds and Notes and the financing of the acquisition of
additional personal property through the issuance of the Refunding Bonds.
• Section 3. Amendments to the Outstanding Bonds and Notes
substantially in the forms submitted to this Council are hereby approved,
ratified and confirmed .
Section 4. The Corporation, its Articles of Incorporation and
Bylaws, as heretofore amended, and its Board of Directors are hereby
ratified, approved and. confirmed.
Section 5. The issuance of the Refunding Bonds in an aggregate
principal amount not to exceed $10,000,000, at an average interest rate
not to exceed 7.60% is hereby approved.
Section 6. This Council on behalf of the City hereby (i) accepts
from the Corporation the gift of the Project when all of the Refunding
Bonds, together with interest and premium, if any, thereon have been paid
and agrees that title thereto will vest in the City upon such payment and
after delivery to the City of the Deed and Bill of Sale, and (ii) accepts
the option to purchase the Project before that date upon certain events and
conditions specified in the Indenture.
Presented and Approved as to form by
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George D. Lindberg, City Attorney
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ADOPTED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
CHULA VISTA, CALIFORNIA, this 20th day of June
197 8 by the following vote, to-wit:
AYES: COUnCilmen Egdahl, Hyde, Gillow, Scott, Cox
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NAYES: Councilmen None
ABSTAIN: Councilmen None
ABSENT: Councilmen None
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yor of the City of Chula Vi
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ATTEST ~~ . Qi'
City Cler
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO ) ss.
CITY OF CHULA VISTA )
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I, JENNIE M. FULASZ, CMC, CITY CLERK of the City of Chula Vista, California,
DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of
DATED
(seal )
,and that the same has not been amended or repealed.
City Clerk
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