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RE~VEL()PPj.NT AGENCY .A...QUEST FOR ~-ISSION/COUNCIL Ac110N
From: Glenda Saul, Executive Director
Subject: ACCEPTANCE OF CONTRACT FOR LEGAL
SERVICES FOR REFUNDING BOND ISSUE
(SISTER'S OF CHARITY OF THE INCARNATE
WORD - ST. BERNARDlNE'S)
, ,.It: Redevelopment Agency
Date: December 2, 1986
Synopsis of Previous Commission/Council action:
6/21/82 Resolution 82-269 authorizing approval of bond application.
11/22/82 Income Families Ordinance MC-226 - amending Ordinance #3815 relating to
financing.
11/22/82 Resolution 28-475 authorizing approval of trust indenture.
11/22/82 Resolution 82-476 authorizing approval of a loan agreement.
11/22/82 MC-225 established a home financing program for low and moderate income
housing.
Recommended motion: (MAYOR AND COMMON COUNCIL)
a) MOVE TO ADOPT A RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING AND
DIRECTING ACCEPTANCE OF CONTRACT FOR LEGAL SERVICES FOR REFUNDING BOND ISSUE
(SISTER'S OF CHARITY OF THE INCARNATE WORD, ST. BERNARDINE' S HOSPITAL).
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b) MOVE TO ADOPT A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA APPROVING A PRELIMINARY OFFICIAL STATEMENT AND
AUTHORIZING ITS USE IN CONNECTION WITH THE PROSPECTIVE ISSUANCE OF ITS "CITY OF
SAN BERNARDINO, CALIFORNIA, SCH HEALTH CARE SYSTEM REVENUE BONDS (SISTERS OF
CHARITY OF THE INCARNATE WORD, HOUSTON, TEXAS), SERIES 1986A", FOR THE PURPOSE
OF REFUNDING CERTAIN OUTSTANDING BONDS, SERIES 1983A; MAKING CERTAIN FINDINGS
AND DETERMINATIONS IN CONNECTION THEREWITH.
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Signature
Contact person:
Glenda Saul
FUNDING REQUIREMENTS:
Amount: $
N/A
Phone: 383-5081
2nd
Ward:
Project: None
Date: December 8, 1986
Supporting data attached:
YES
No adverse Impact on City:
r 'ncil Notes:
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Agenda Item No, -/
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REbeVELo..,"ENT AGENCY-A.QuEST FOR to_ISSION/COUNCIL ActION
STAFF REPORT
Background
On November 20, 1986, staff received a recommendation for approval of the Sister's
of Charity of the Incarnate Word, Houston, Texas (SCH) bond refunding request for
the previously funded 1983 bond issue.
On December 2, 1985, staff forwarded detailed, written communication regarding the
aforementioned bond refunding request. Staff advised your Honorable Body that
said bond refunding request would be addressed at a future council meeting during
the month of January, 1987.
The resolutions before you authorize and direct the following:
a) Acceptance of terms proposed in a letter dated November 26, 1986 by the
law office of James Warren Beebe to provide bond counsel services in
connection with the proposed refunding bond issue ($29,900,000 - Series
1983). Mr. Beebe served as bond counsel from the inception of SCH's
1983 bond funding. The letter of November 26, 1986, is attached,
identified as Exhibit "A".
b) Approval of a Preliminary Official Statement (attached) and
authorization of its use in connection with the aforementioned bond
refunding.
Approval of the Preliminary Official Statement identifies bond financing
with the understanding that financing is being approved only in concept
and that the specific documents to be used shall be presented to the
Mayor and Common Council in due course. Any corrections, changes,
modifications, additions or deletions, as may be proposed by the
underwriters (Merrill Lynch), shall be approved and recommended by the
City's Bond Counsel, James Warren Beebe, and approved by the Mayor, or
in her absence, the Mayor Pro Tem, and City Attorney or his designee.
City Benefits
The City will see continued growth in economic development upon the transfer of
the required bond issue, 1% IDB Reserve and Development fee ($299,000) from the
Agency to the Economic Development Council.
There will be no impact of the City's IDB allocation under the new 1986 Tax Act,
as the refunding bonds would be issued under the original Inducement Resolution.
Staff recommends approval of Mr. Beebe's letter dated November 26, 1986, which
outlines bond counsel services in connection with the proposed refunding bond
issue, as well as approval in concept of the Preliminary Official Statement.
1883G/JAT
12/08/86
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Tbe fOllowing is a recap of sca's application and their proposed funding:
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PRINCIPALS :
SHC - a non-profit corporation - approximately
17 health care institutions in five (5) states,
an a&lregate of 4,863 licensed beds. SCH
controls 9 affiliates, including St. Bernardine
Hospital, San Bernardino, California, a
non-profit corporation.
PROJECT & LOCATION:
City of San Bernardino. Additions to health
facilities.
FUNDING:
$29,900,000 (32 years) Series 1982B Bonds to be
sold to Underwood, Neuhaus & Co., Inc., and
Merrill Lynch White Weld Capital Markets Group.
TRUSTEE:
Texas Coaerce Bank, Nationsl Association,
Houston, Teus.
INTEREST RATE:
Interest - estimated 9.75%.
ESTIMATED JOBS:
Approxill8tely 100
RESERVE & DEVELOPMENT
FUND:
1% of $29,900,000 . $299,000.
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RESOLUTION NO.
RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING AND
DIRECTING THE ACCEPTANCE OF A CONTRACT FOR LEGAL SERVICES FOR
REFUNDING BOND ISSUE (SISTERS OF CHARITY OF THE INCARNATE WORD,
ST. BERNARDINE'S HOSPITAL).
BE IT RESOLVED BY THE I'IAYOR ANi) C0i1MON COUNCIL OF THE CITY
OF SAN BERNARDINO AS FOLLOWS:
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6 SECTION 1. The Mayor of the City of San Bernardino is
7 hereby authorized and directed to execute an acceptance of the
8 terms proposed by the Law Office of James Warren Beebe in its
9 letter dated November 26, 1986, in connection with the proposed
10 refunding bond issue requested by Sisters of Charity of the
11 Incarnate Word, parent corporation of St. Bernardine's Hospital.
12 A copy of the letter of November 26, 1986, is attached hereto as
13 Exhibit "A", and incorporated herein by this reference.
14 I HEREBY CERTIFY that the foregoing resolution was duly
15 adopted by the Mayor and Common Council of the City of San
16 Bernardino at a
17 day of
18 wit:
meeting thereof, held on the
, 1986, by the following vote, to
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23 ABSENT:
AYES:
Council !1embers
NAYS:
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City Cleek
The foregoing resolution is hereby approved this
day
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, 1986.
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Mayor of the City of San Bernardino
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LAW OFFICES 0...
.JAMES WARREN BEEBE
A LAW CORPORATION
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626 WILSHIRE BOULEVARD
LOS ANGELES, CALIFORNIA 90017
AREA CODE 213
TELE!'>MONE 680.1406
November 26, 1986
RE"FER TO FILE NO.
60,009-59-3
Honorable Mayor and Common Council
of the City of San Bernardino
City Hall
300 North "D" Street
San Bernardino, California 92418
Re: $29,900,000 city of San Bernardino,
California SCH Health Care System Revenue
Bonds (Sisters of Charity of the Incarnate
Word, Houston, Texas) Series 1986A
Honorable Mayor and Common Council:
''''-.
We have discussed our employment to render bond
counsel services in connection with the above-referenced
issue of Bonds with Allen R. Briggs, Esq., Sr. Assistant
City Attorney, and, if you approve, this letter is to
confirm the terms of our employment.
The above-referenced issue of Bonds is unique in
that it is part of a composite financing designed to
restructure the bonded debt of the Sisters of Charity of the
Incarnate Word, Houston, Texas ("SCH"), thus reducing
interest costs and the financial load on the institution.
The San Bernardino financing is designed to refund the 1983
issue of SCH and is structured to fit in with the refinanc-
ing of the hospital debts in locations in four different
states.
Because of the short time schedule, we have
commenced working on the financing and have transmitted
preliminary documents to the City for review and adoption.
The financing team of experts has worked on the
transaction before and so is able to effect significant
savings in issuance expenses. Due to the participation by
all of the others on the financing team, our fee for this
work should not be computed in accordance with our letter of
November 13, 1979, under which we operated for several
years. Instead of a fee of that magnitude, we have proposed
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EXHIBIT "A"
LAW aFFlCE~F
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JAMES WARREN BEEBE
A LAW CORPORATION
Honorable Mayor and Common Council
November 26, 1986
Page 2
to SCH a fee of not to exceed $35,000, with our incidental
expense figure not to exceed $5,250, such expenses to be
itemized. We are still not sure of the exact amounts,
because so much of a refunding depends upon the computer
runs of the numbers. Therefore, we have used not-to-exceed
figures. The fee and expenses are contingent upon the
closing of the Bond issue.
If the arrangements outlined herein are satisfac-
tory, please adopt a minute order making reference to this
letter and employing us upon the terms stated herein and
return to us an executed copy of this letter.
Respectfully yours,
"'-/
JAMES WARREN BEEBE
A LAW CORPORA~
~~~,*r .G.-
~/James Warren Beebe
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Enclosure
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LAW ~.__-' .000F
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JAMES WARREN BEEBE
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A LAW CORPORATION
Honorable Mayor and Common Council
November 26, 1986
Page 3
Pursuant to a resolution of the Mayor and Common
Council of the City of San Bernardino, the firm of JAMES
WARREN BEEBE, A LAW CORPORATION, is employed upon the terms
stated in the foregoing letter.
Mayor of the city of San Bernardino
Attest:
City Clerk of the City of
San Bernardino
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San Bernardino
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RESOLUTION NO. 86-___
RESOLUTION OF THE MAYOR AND COMMON COUNCIL
OF THE CITY OF SAN BERNARDINO, CALIFORNIA,
APPROVING A PRELIMINARY OFFICIAL STATEMENT
AND AUTHORIZING ITS USE IN CONNECTION WITH
THE PROSPECTIVE ISSUANCE OF ITS "CITY OF
SAN BERNARDINO, CALIFORNIA, SCH HEALTH CARE
SYSTEM REVENUE BONDS (SISTERS OF CHARITY
OF THE INCARNATE WORD, HOUSTON, TEXAS),
SERIES 1986A," FOR THE PURPOSE OF REFUND-
ING CERTAIN OUTSTANDING BONDS, SERIES 1983A;
MAKING CERTAIN FINDINGS AND DETERMINATIONS
IN CONNECTION THEREWITH.
(SISTERS OF CHARITY OF THE INCARNATE WORD,
HOUSTON, TEXAS, SOLE CORPORATE MEMBER OF
ST. BERNARDINE HOSPITAL OF SAN BERNARDINO)
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WHEREAS, the city of San Bernardino (the "city")
is a "home rule city" duly organized and existing under and
pursuant to a Charter adopted under the provisions of the
Constitution of the State of California; and
WHEREAS, pursuant to its home rule powers, the
city duly and regularly enacted Ordinance No. 3815, as
amended, (the "Ordinance") to finance various types of
projects, as defined in the Ordinance, and to issue its
special revenue bonds for the purpose of paying the cost of
financing such projects; and
WHEREAS, there was filed with the City an Applica-
tion (the "Application") pursuant to the provisions of the
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Ordinance by Sisters of Charity of the Incarnate Word,
Houston, Texas, Sole Corporate Member of st. Bernardine
Hospital of San Bernardino, (referred to herein as the
"Company" or "Sisters of Charity Hospital") requesting the
issuance of revenue bonds for the purpose of financing the
cost and expense of: (i) additions to and improvements of
its hospital facilities as more particularly described in
said Application; and (ii) the refinancing of certain
outstanding obligations of said Sisters of Charity Hospital;
and
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WHEREAS, the Application was reviewed and the plan
of financing was found to comply with the spirit, intent and
provisions of the Ordinance, as amended, and the City
determined to proceed with the financing; and
WHEREAS, the refinancing of certain outstanding
obligations of said sisters of Charity Hospital was accom-
plished in a different manner and the final financing
furnished funds for additions to and improvements of its
hospital facilities; and
WHEREAS, for the above purpose, the City issued
its $29,900,000 City of San Bernardino, California, SCH
Health Care System Revenue Bonds (Sisters of Charity of the
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Incarnate Word, Houston, Texas) Series 1983A (the "Bonds,
Series 1983A") and the same are presently outstanding; and
WHEREAS, the sisters of Charity Hospital has
requested that the City participate in a refunding of the
outstanding Bonds, Series 1983A, through the issuance of its
City of San Bernardino, California, SCH Health System
Revenue Bonds (Sisters of Charity of the Incarnate Word,
Houston, Texas) Series 1986A (the "Bonds, Series 1986A");
and
WHEREAS, Ordinance No. 3815, as amended, provides
for such a refunding.
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WHEREAS, the financing will be expedited by the
Mayor and Common Council preliminarily approving it and
authorizing the use of a Preliminary Official Statement.
NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF
THE CITY OF SAN BERNARDINO DO HEREBY FIND, RESOLVE, DETER-
MINE AND ORDER AS FOLLOWS:
Section 1. The recitals set forth hereinabove are
true and correct in all respects.
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Section 2. The City has determined and hereby
redetermines that the project proposed by Sisters of Charity
Hospital for which the Bonds, Series 1983A, were issued, is
in compliance with the purposes of the Ordinance and with
the criteria established pursuant thereto and further
determines that the sisters of Charity Hospital provides
necessary medical care and services to the citizens of the
City and is an essential part of the City's health care
delivery system and the undertaking of such project by the
City will be a substantial factor in the ability of the
Sisters of Charity Hospital to provide such necessary
services and to contain the cost of such services. Without
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limiting the generality of the foregoing, reference is
particularly made to subsection U of Section 1 of the
Ordinance and to the extensive review of the health care
facilities servicing the City and its inhabitants which was
made by the Mayor and Common Council as the basis for the
adoption of Resolution No. 80-481. The project proposed by
Sisters of Charity Hospital is in compliance with the
purposes of the Ordinance and with the criteria established
pursuant to thereto.
Section 3. It is likely that continuing the
undertaking of the project by the city will be a substantial
factor in the accrual of public benefits from the use of the
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sisters of Charity Hospital facilities as proposed in the
Application.
Section 4. The refinancing of the project as
described above and as described in the Application is
hereby preliminarily authorized and approved.
Section 5. The issuance by the City of San
Bernardino, California, of the "City of San Bernardino,
California, SCH Health Care System Revenue Bonds (Sisters of
Charity of the Incarnate Word, Houston, Texas) Series 1986A"
in an amount not to exceed $40,000,000 and at an average
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interest rate not to exceed 11% per annum is hereby prelimi-
narily approved. The Bonds shall be issued and sold to
Merrill Lynch Capital Markets (the "Underwriters") upon such
terms and conditions as are provided in the Bond Purchase
Agreement and other documents to be approved.
Section 6. The Bonds shall be special obligations
of the City and shall not be deemed to constitute a debt or
liability of the city or a pledge of the faith and credit of
the City, but shall be payable solely from the payments
received under the terms of the Loan Agreement, described
hereinafter. The Issuance of such Bonds shall not directly
or indirectly or contingently obligate the city to levy or
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- pledge any form of taxation whatsoever therefor or to make
any appropriation for their payment.
Section 7. A draft of a Preliminary Official
statement has been presented to the Mayor and Common Council
and has been reviewed. The Mayor and the Common Council,
acting for and on behalf of the City, hereby approve the use
of Preliminary Official statement in connection with the
offering of the Bonds with the understanding that the
financing is being approved only in concept and that the
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specific documents to be used shall be presented to the
Mayor and Common Council in due course. Any corrections,
changes, modifications, additions or deletions as may be
proposed by the Underwriters, shall be approved and recom-
mended by the City's Bond Counsel, James Warren Beebe, A Law
Corporation, to the Mayor, or, in her absence or disability,
the Mayor Pro Tem, and approved by the Mayor, or, in her
absence or disability, the Mayor Pro Tern, and the city
Attorney or his designee.
section 8. At the Closing of the financing, there
shall be paid to the City the fee set forth in Resolution
No. 81-108, as amended by Resolution No. 81-410, of the
Mayor and Common Council, adopted September 24, 1981.
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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
day of
, 19___, by the following vote,
to wit:
AYES:
Councilmen
NOES:
ABSENT:
ABSTAIN:
City Clerk
The foregoing resolution is hereby approved this
____ day of , 1986.
Mayor of the city of San Bernardino
Approved as to form:
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STATE OF CALIFORNIA
COUNTY OF SAN BERNARDINO
CITY OF SAN BERNARDINO
)
) SS.
)
I, SHAUNA CLARK, city Clerk in and for the city of
San Bernardino, DO HEREBY CERTIFY that the foregoing and
attached copy of San Bernardino City Resolution No.
is a full, true and correct copy of that now on file in this
office.
IN WITNESS WHEREOF,
and affixed the official seal
this _ day of
I have hereunto set my hand
of the city of San Bernardino
, 1986.
city Clerk
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