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HomeMy WebLinkAboutReso 1978-9021~ i .~ RESOLUTION NO. 9021 t RESOLUTION OF THE CITY COUNCIL OF T.FiE CITY OF CHULA VISTA APPROVING COMMTJNImY H(~~PITAj, OF CHULA VISTA'S PROGRAM TO REFUND ITS OUT- STANDING 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. WHEREAS, pursuant to Resolution No. 5966 adopted on March 2, 1971, Resolution No. 6688 adopted on December 12, 1972, 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"), amendments to its Articles of Incorporation and Bylaws and the issuance of its Hospital 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 "Outstanding Notes"), in the principal amount of $1,800,000, 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 March 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 may 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, T ,' 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 Notes were issued pursuant to an Indenture, which has subsequently been amended by a Supplemental Indenture, and the Corporation has filed copies of the foregoing witch the City Clerk; and WHEREAS, the Corporation has proposed certain changes to the Outstanding Bonds and Notes and has filed with the City Clerk drafts (2-10-78) of a proposed First Supplemental Indenture of Mortgage and Deed of Trust relating to the Outstanding Bonds and a proposed 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; 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 and a Security Agreement and Indenture (together, the "Indentures") the Corporation desires to issue its Hospital Facility First Mortgage Refunding Bonds and its Special Obligation Refunding Bonds, respectively (together, 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 Indenture; 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 to 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 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, -2- 1 t ~ drafts (2-10-78) of the Indentures (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 proofs of the Official Statements (proofs of March 6, 1978) by which the Refunding Bonds will be offered, explaining the refunding transactions; and WHEREAS, pursuant to the Indenture for the Hospital Facility First Mortgage Refunding Bonds the City will have the sole and exclusive option to purchase all right, title and interest of the Corporation in the Project (as defined therein) at any time for an amount sufficient to dis- charge 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 is in the best interests of the City to take steps as are necessary to maintain and upgrade the Project, to reduce the costs 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 title to the Project upon retirement of the Refunding Bonds; and WHEREAS, 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 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 Indentures 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 -3- ~• 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 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 2. Amendments to the Outstanding Bonds and Notes substantially in the forms submitted to this Council are hereby approved, ratified and confirmed. Section 3. The Corporation, its Articles of Incorporation and Bylaws, as heretofore amended, and its Board of Directors are hereby ratified, approved and confirmed. Section 4. The Hospital Facility First Mortgage Refunding Bonds in an aggregate principal amount not to exceed $10,250,000 and an interest rate not to exceed 7.50% and the Special Obligation Refunding Bonds in an aggregate principal amount not to exceed $6,500,000 and an interest rate not to exceed 7.25% are hereby approved. Section 5. 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 Bond Indenture. Presented and Approved as to Form by ~'~~ r George Lindberg, City Attorney -4- ' f jt ~ ADOPTED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA, this 14th day of March 19.7 s by the following vote, to-wit: AYES: Councilmen xvde, scott , Hobel NAYES: Councilmen None ABSTAIN: Councilmen None ABSENT: Councilmen cox, Egdahl CJ~--~ ~ ~ ~~~ Mayor of _ ~~~ ATTES ~ ~~ ~ ~ ~, ~ City Cle k STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) s s . CITY OF CHULA VISTA ) Vista 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 ,and that the same has not been amended or repealed. DATED (seal) City Clerk CC-660