HomeMy WebLinkAboutAgenda Statement 1978/06/20 Item 16ACITY OF ~CHULA VISTA
COUNCIL AGENDA STATEMENT
Item No. 16A
For meeting of 6/20/78
RESOLUTION r`, - Rescinding Resolution No. 9021 and Adopting the Revised Program
91.a ~.
ITEM TITLE of Community Hospital of Chula Vista to Refund its OUtstanding Obligations and to
Provide new Money, Approving its Articles of Incorporation and Bylaws, as amended,
and Accepting the gift of a Project Financed by such Obligations
SUBMITTED BY City Attorney
ITEM EXPLANATION
(4/5TH'S VOTE REQUIRED YES NO X )
Mr. Terence J, McCarty of the firm of Stone & Youngberg has advised this.
office and the City Council that because of certain substantive changes
~ in dollar amounts and interest rates as contained in the previously
j~ adopted resolution approving the Community Hospital Program of refunding
its outstanding obligations, that a new resolution reflecting those
changes must be adopted in accordance with directions of bond counsel.
Such a resolution has been prepared and does not substantively alter
,, the terms and conditions of the agreement and understandings between
the City of Chula Vista and Community Hospital. Therefore, it is
recommended that the City Council adopt said new resolution.
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tJ~ ty 1 tS 1 I J
Agreement Resolution X Ordinance Plat Notification List
Other ENVIRONMENTAL DOCUMENT: Attached Submitted on
FINANCIAL IMPACT
STAFF RECOMMENDATION
N/A
Approval of Resolution
BOARD/COMMISSION RECOMMENDATION
COUNCIL ACTION
STONE 8z YOUNGBERG
MUNICIPAL FINANCING CONSULTANTS, INC.
June 15, 1978
Honorable Mayor and Members
of the City Council
City of Chula Vista
City Hall
Chula Vista, California
Subject: Community Hospital of Chula Vista
Dear Mayor Hyde and Members of the Council:
At the meeting of the City Council on acY~ 14, 1978, you adopted a resolution
approving the issuance of up to $10, of Hospital Facility First Mortgage
Refunding Bonds and up to $6, 500, 000 of Special Obligation Refunding Bonds by
Community Hospital of Chula Vista (the "Corporation") at interest rates not ex-
ceeding 7.5 percent per annum. The bond marketing operation commenced in
late March, but the furor caused by the campaign over Proposition 13 disrupted
the market for virtually all tax exempt securities issued in California, and as a
result, has in part resulted in a delay in the completion of the marketing. As a
consequence of this. delay, plus a general increase in interest rates for tax
exempt bonds nationally, it has become apparent that the financing plan should
be re-structured, and that the interest rate limitation should be revised to permit
a maximum average net annual interest cost of 7.6 percent per annum . The re-
structuring of the financing plan will provide for a maximum indebtedness of
$10,000,000 of First Mortgage Refunding Bonds instead of the previously approved
$10, 250, 000 and will eliminate the issuance of any Special Obligation Refunding
Bonds .
Because these changes are substantive in nature, the Corporation, upon advice
of bond counsel, requests the City Council to approve an amended resolution in-
corporating the above revisions and re-stating all previously approved provisions.
It should be noted, however, that the total bond issue is not expected to exceed
$9, 800, 000, and the average annual net interest cost is presently estimated at
7.4891 percent per annum. We still expect to realize the substantial benefits related
in our letter to the City Council dated March 8, 1978, but on advice of bond counsel
the proposed amended resolution is being presented for your approval in order to
clarify existing conditions . As mentioned previously, the City of Chula Vista will
have no responsibility, real or implied, for payment of the proposed bonds of the
Community Hospital of Chula Vista.
SUITE 2750 ONE CALIFORNIA STREET SAN FRANCISCO, CALIFORNIA 94111 (415) 989.2300
Honorable Mayor and Members of June 15, 1978
the City Council Page 2
Chula Vista, California
I will attend the City Council meeting on Tuesday, June 20, 1978 to answer any
questions the members of the Council may have.
Very truly yours ,
STONE&YOUNGBERG
Municipal Financing Consultants, Inc.
'ty _
Vice Presid
cc: George D. Lindberg, Esq.
John H. Whitney, Esq.
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