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HomeMy WebLinkAbout1981-002 Setting Forth Certain Findings with Respect to the Health Care Delivery SystemSan Bernardino 60,009-17-4 . RESOLUTION NO. U.-I RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, SETTING FORTH CERTAIN FINDINGS WITH RESPECT TO THE HEALTH CARE DELIVERY SYSTEM SERVING THE CITY, THE BENEFITS OF PROVIDING TAX- EXEMPT FINANCING TO ASSIST SUCH SYSTEM AND, IN PARTICULAR, SETTING FORTH CERTAIN FINDINGS CONCERNING THE ROLE LOMA LINDA UNIVERSITY MEDICAL CENTER PLAYS IN SUCH HEALTH CARE DELIVERY SYSTEM WHEREAS, the City has adopted Ordinance No. 3815, as amended, entitled: ; and "ORDINANCE OF THE CITY OF SAN BERNARDINO RELATING TO THE FINANCING OF PROJECTS FOR THE ENCOURAGING OF INCREASED EMPLOY- MENT WITHIN THE CITY" WHEREAS, such Ordinance No. 3815 has been amended to permit the City to issue revenue bonds to provide financing and refinancing of health care facilities for nonprofit corporations; and WHEREAS, this Mayor and Common Council have con- sidered the public convenience and necessity require pro- ceeding under such Ordinance No. 3815, as amended, and, in #138 (ab) 12/22/80 -1* �? (� �) San Bernardino 601?009-•17-4 • . such connection, have received reports and comments from citizens and citizen groups, have received research reports and have held discussions on the foregoing, with particular reference to the issuance by the City of revenue bonds to provide financing and refinancing of a particular health care facility, to wit: the tertiary care facility known as Loma Linda University Medical Center which is part of the health care delivery system and serves the City as a referral and trauma center; and WHEREAS, certain documents pertaining to the financing of the Loma Linda University Medical Center have been adopted in principle, and, in view of the rapid escala- tion of interest rates, amendments and changes therein are required for such documents, and the same will be presented to the Mayor and Common Council for adoption_ NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. Specific Findings. The Mayor and Common Council have considered the need for the provision of health care facilities to serve the City and its inhabi- tants, in the context of the contemplated financing of the Loma Linda University Medical Center, and have considered -2- #138 (ab) 12/22/80 San Bernardino 60,009-17-3 the issues involved and the facts and information presented and, upon the basis of such information and their personal knowledge of the City and its needs, hereby find as follows: A. The provision of high quality health care at all levels is a matter of vital concern to the citizens of San Bernardino and accessibility to such health care, both in terms of affordability and physical location, is also of vital concern; and B. It is the City's responsibility to provide for and promote the health and -well being of its citizens; and, in doing so, it is addressing a matter which is a municipal affair; and C. The City may directly provide for and promote the public health and care for the sick and injured by building, equipping, staffing and operating hospitals, clinics and other health related facilities, all of which require large amounts of capital, usually raised by taxa- tion. Health care facilities provided by charities, non- profit corporations and others fulfill the same public purpose, but do not require the imposition of taxes on the citizens nor create a burden on the City. Since such -3- #138 (ap) 12/20/80 San Bernardino 60,009-17-3 facilities are carrying out a public purpose which would otherwise fall to the City, the City, in carrying out its public responsibilities, may assist such organizations in such ways as it deems appropriate. Numerous cities and counties have provided such assistance by issuing hospital revenue bonds on behalf of private hospitals, such bonds being tax-exempt, but not being a debt nor obligation of the public bodies sponsoring the financing (here, the City). In this way, the public bodies sponsoring the finan- cing (here, the City) can serve a public purpose at no ex- pense to the taxpayers and with no liability to themselves (here, the City); D. The issuance of tax-exempt bonds is the most common form of hospital and health care financing in the nation today. More than 800 of health care facility financ- ings undertaken last year involved the issuance of tax- exempt bonds by a governmental unit. Such financings have been undertaken by other charter cities in California; E. It is to the benefit of the City and its citizens that such form of financing be used in San Bernardino, as it provides a source of funds to be used to improve and maintain health care facilities, and it provides such funds at significantly lower interest rates than would be available on other forms of borrowing; -4- #138 ab 12/20/80 San Bernardino 60, 009-17-3 . F. With the efforts that the City and its Re- development Agency have been and are presently making to -attract businesses to locate within the City, with the City becoming a major supplier of new housing, population will increase making an increasing demand upon the health care services; G. The cost of financing, the interest cost in particular, is a major element in the determination of rates and charges made to the public for health care services provided to patients. The interest costs attributable to Medicare and Medi-Cal patients is a cost which is passed through directly from the hospital to Medicare and Medi-Cal. High interest rates result in higher health care costs. Health care costs have become extraordinarily expensive. By making tax-exempt financing available, the City can assist in containing health care costs; H. The State Legislature has established a state authority with a limited ability to issue tax-exempt bonds for health care facilities. At present the resources of the State are committed far in advance to projects not involving San Bernardino. In creating such authority, the State has acted to provide an alternative, not an exclusive, source of tax-exempt financings and has not preempted the field. -5- #138 (ab) 12/20/80 60,009-17-4 San Bernardino Charter cities may act to finance health care facilities serving their citizens; I. The City is served by a health care delivery system which includes various levels of care and numerous health care facilities, each of which contributes to the comprehensive range of health care facilities available to the City. Included within the system are: (1) primary care facilities providing the basic, most commonly needed care; (2) secondary care facilities which provide the next level of care and involve some specialized services, and (3) a tertiary care and referral center which serves as the site for the super -specialities and the intense and specialized care needed by those who are critically ill or injured or who have multiple or unusual afflictions; J. All levels of care are needed and should be supported if the citizens of the City are to continue to have access to the finest health care available; K. The amendment which has been made to Ordinance No. 3815 will make tax-exempt financing available to all nonprofit organizations forming a part of the City's health care delivery system; -6- #138 (ab) 12/22/80 • San Bernardino 60, 009-17-3 L. Various factors, including State and Federal statutes, have caused the health care delivery systems to _develop on a regional rather than a city by city basis. Specialized services have, to a considerable extent, been centralized and efforts made to reduce duplication of special- ized services in an effort to contain health care costs; M. Businesses considering locating in the City look not only to the available land, work force, etc., but also look to the quality of life available. A common ques- tion relates to the type and availability of health care facilities. Good health care facilities are a definite factor in encouraging businesses to locate in the City. N. The tertiary care facility within the health care delivery system serving San Bernardino is Loma Linda University Medical Center ("Medical Center"), which serves as the referral and trauma center for the City: 1. The most cricically ill and injured citizens of San Bernardino are taken directly or referred to the Medical Center for the specialized and intense care they need; -7- #138 (ab) 12/20/80 San - Bernardino 60,009-17-3, 2. The Medical Center is located less than a mile from the physical boundaries of the City and is easily accessible from the City by freeway; its service area includes the City; the next nearest tertiary care, -referral and trauma center being located in Los Angeles, too remote to provide adequate service to San Bernardino; 3. In trauma cases, prompt and expert treatment is essential to preventing further injury (such as brain damage) and often, to saving the lives involved. A recent article refers to the short time involved in treating trauma cases as "the golden hours". In this time, a life can be saved but, beyond this time it is often lost. Having such a resource readily available in the Medical Center and not having to transport trauma cases to Los Angeles cannot help but save lives, and, as such, greatly improves the quality of life in the City; 4. The Medical Center has served thousands of San Bernardino citizens and, on the basis of current utilization, will admit more than 60,000 San Bernardino citizens as in -patients during the -8- #138 (ab) 12/20/80 San Bernardino 60,009-17-3 term of the proposed bond issue and care for more than 1,000,000 of such citizens on an out -patient basis; 5. The degree and depth of specialization, the intensity level of care, the amount of sophis- tication of equipment provided by the Medical Center would not otherwise be readily available to citizens of San Bernardino and, under today's health planning laws, it would not be possible to duplicate such services; 6. The location of the Medical Center and the services it provides are vital to the City and make the City a better, healthier and more appeal- ing place in which to live, and, because of the level and quality of care provided at the Medical Center and the research capabilities available, the City is in a favorable position to compete with other cities for new businesses and industry; 7. The cost of providing all of the same services and facilities at a location within the City is prohibitive; -9- #138 (ab) 12/20/80 San Bernardino 60, 009-17•-4 . 8. The Medical Center opened in 1967 and is now 13 years old; it has, over the years, added new units, equipment and services in order to stay abreast of the state of the art and provide the finest in health care; however, it has now reached the point at which it is overcrowded and at times unable to adequately accommodate new patients, particularly in the specialized units. To alleviate these problems the Medical Center must undertake a major remodeling and expansion program if it is to continue to adequately meet the needs of the citizens of San Bernardino as well as the other patients it serves. Such a remodeling and expansion program is currently in the final planning stages; 9. It is in the best interests of the City to issue its tax-exempt bonds and lend the proceeds to the Medical Center to enable it to restructure its indebtedness as a first step toward the logical planning and preparation for a major expansion and remodeling program to increase and upgrade facilities constructed to meet the rapidly accelerating im- provements in the state of the art, all of which have, as an end result, among other things, the -10- #138 (ab) 12/22/80 San Bernardino 60, 009-17-4 formation of, access and availability to the citi- zens of the City of medical care, which is in keeping with the current state of the art. Section 2. Conclusion. It is hereby found and determined that it is in the best interest of the City and in the furtherance of a public purpose and a municipal affair to maintain and strengthen the health care delivery system which serves the City by making available to all nonprofit corporations which serve the City and its inhabi- tants, tax-exempt financing -- financing which is available to numerous other hospitals in the nation. It is further found and determined that it is appropriate and in the best interest of the City to issue tax-exempt bonds to assist the Loma Linda University Medical Center and thereby assure the finest in care for the citizens of the City. -11- #138 (ab) 12/22/80 I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a regular meeting thereof, held on the 5th day of January, 1981, by the following vote, to -wit: a AYES: Councilmen r NAYS: c ABSENT: City Clerk The foregoing resolution is hereby approved this day of 19R1_ 0 Approved as to form: City At orney