HomeMy WebLinkAbout84-4 - Amending The Municipal Code by Adding the Health Facilities Revenue Bond Law, (Chapter 3.26) Thereby Establishing Procedures Whereby Revenue Bonds May Be Issued by the City for the Purpose of Providing Financing to Participating Health Care FacilitORDINANCE NO. 84 -4
• AN ORDINANCE OF THE CITY OF NEWPORT BEACH
AMENDING THE MUNICIPAL CODE BY ADDING THE
HEALTH FACILITIES REVENUE BOND LAW, (CHAPTER
3.26) THEREBY ESTABLISHING PROCEDURES WHEREBY
REVENUE BONDS MAY BE ISSUED BY THE CITY FOR
THE PURPOSE OF PROVIDING FINANCING TO
PARTICIPATING HEALTH CARE FACILITIES FOR
SPECIFIED PURPOSES
Section 1. The City Council of the City of Newport
Beach, finds and declares as follows:
The City Council of the City of Newport Beach is
empowered, pursuant to the provisions of Section 200 of Article
II of the Charter of the City of Newport Beach and the provisions
of Sections 3, 5 and 7 of Article XI of the Constitution of the
State of California, to authorize, issue and sell revenue bonds
for the purpose of providing financing, or refinancing, to
certain health care facilities located within the corporate
boundaries of the City of Newport Beach; and
The City Council, by the adoption of this ordinance,
intends to establish a procedure for the issuance and sale of
bonds for the purpose of providing financing to health care
institutions; and
The City Council, has determined that, in exercising
its powers under this ordinance, the City will, at no time, be
obligated, either directly or indirectly, to repay any money,
pledge or encumber any assets, or to levy any form of taxation or
assessment;
Because the exercise of powers under this ordinance
will have no financial impact the City Council finds that its
exercise of the powers specified will promote the health, safety
• and welfare of the residents of the City of Newport Beach and
County of Orange because City- assisted financing enables non-
profit health care facilities to borrow money at lower interest
rates and those savings are then passed along to the public in
the form of lower costs and /or better medical care;
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• Section 2. The City Council does ordain as follows:
Chapter 3.26 is hereby added to the Municipal Code to
read as follows:
Chapter 3.26
HEALTH CARE FACILITY REVENUE BOND ORDINANCE
3.26.010 Short Title
3.26.020 Purpose
3.26.030 Definitions
3.26.040 Powers
3.26.050 Bonds
AA
3.26.060
Purpose
3.26.070
Liberal Construction
3.26.080
Effect of Omission or Defect
•
3.26.090
Authority.
3.26.100
Provisions of this Ordinance are Complete,
3.26.110
Inconsistency with Other Statutes
3.26.120
Partial Invalidity
3.26.010
Short Title This chapter shall be known as
the "Health Care Facility
Revenue Bond Ordinance" of the City of
Newport Beach.
3.26.020
Purpose The City Council finds that the
ordinance codified
in this Chapter is intended to establish a
procedure whereby
the City provides assistance in the financing
of improvements to
non - profit health care facilities located
within the City of
Newport Beach. By providing such assistance,
•
and in reducing the
cost of financing improvements, the City will
enable non - profit
health care facilities to lower costs of
medical services and
to provide better and more efficient service
than would otherwise be available.
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• The City Council also declares that the significant
public benefit that derives from the exercise of powers described
in this ordinance will not result in any adverse financial impact
on the City of Newport Beach, nor will the City take any action
which would create any debt or liability on the part of the City,
any obligation to levy or impose taxes or assessments or
otherwise affect the finances or credit of the City of Newport
Beach.
The City Council also declares that, in order to ensure
that the participation of the City in financing is for a public
purpose, the City may impose fees, charges or financial
commitments on the part of the participating institution, as may
be necessary or appropriate to recover administrative costs and
expenses incurred in the exercise of the powers and duties
conferred by this ordinance or to defray certain costs annually
• incurred by the City in providing emergency health care.
3.26.030 Definitions Unless the context otherwise
requires, the terms defined in this ordinance shall have the
following meanings:
(a) 'Bonds' means any bonds, notes, certificates,
debentures or other obligations issued or entered into by the
City pursuant to this ordinance and payable exclusively from
revenues as in this ordinance defined and from any other funds
specified in this ordinance upon which such obligations may be
made a charge and from which they are made payable.
(b)
'City'
means
the
City
of
Newport Beach.
(c)
'Cost'
means
the
total
of
all costs incurred by or
on behalf of a participating health institution necessary or
• incident to carrying out the purpose, as specified in Sections
2 -1, 2 -2 and 2 -3, for which a series of bonds is issued, as are
approved by the City as reasonable and necessary for carrying out
all works and undertakings necessary or incident to such
purpose. 'Cost,' as applied to a project or portion thereof
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• financed with the proceeds of any series of bonds issued here-
under means and includes, without limitation, all or any part of
the cost of construction and acquisition of all lands,
structures, real or personal property, rights, rights -of -way,
franchises, easements and interests acquired or used for such
project, the cost of demolishing or removing any buildings or
structures on land so acquired, including the cost of acquiring
any lands to which such buildings or structures may be moved, the
cost of all machinery and equipment, financing charges, reserves
for principal and interest and for extensions, enlargements,
additions, replacements, renovations and improvements, the cost
of engineering, reasonable financial and legal services, plans,
specifications, studies, surveys, estimates, administrative ex-
penses and other expenses necessary or incident to determining
the feasibility of constructing any such project or incident to
• the construction or acquisition or financing thereof. 'Cost'
also may include reimbursement of any such costs incurred by the
participating health institution prior to or after the enactment
of this ordinance or prior to or after the enactment of a resolu-
tion of the Council with respect to the issuance of such series
of bonds.
(d) 'Council' means the City Council of the City of
Newport Beach.
(e) 'Health facility' means any facility, place or
building which is maintained and operated for the diagnosis,
care, prevention or treatment of human illness, physical or
mental, including convalescence, rehabilitation or care during
and after pregnancy, or for any one or more of these services,
• and which provides to residents of the City health care services
designated as such in an agreement between the City and the par-
ticipating health institution providing or operating such
facility, place or building.
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'Health facility' includes a portion of the above types
isof facilities and includes facilities opeated in conjunction with
one of the above types of faclities and required or useful, as
determined by resolution of the Council, for the operation of a
health facility, including but not limited to: a laboratory, a
laundry, a nurses' or interns' residence, a housing facility for
patients, staff or employees and the families of any of them, an
administration building or buildings to house offices of the
participating health institution, a research, maintenance,
storage, utility or parking facility and all structures or
facilities related to any of the foregoing.
'Health facility' shall not include any building used
or to be used primarily for sectarian instruction or study or as
a place for devotional activities or religious worship.
(f) 'Improvement of a health facility' shall include,
• without limitation, the additions to or replacement of a health
facility or the acquisition of equipment in connection with the
operation of such health facility.
(g) 'Participating health institution' means a private
nonprofit corporation or association authorized by the laws of
the State of California to provide or operate a health facility
as defined in this ordinance and which, pursuant to the
provisions of this ordinance, undertakes the financing of the
acquisition, construction or improvement of a health facility or
undertakes the refunding or refinancing of obligations incurred
to finance the acquisition, construction or improvement of a
health facility, or any corporation which is a nonprofit corpora-
tion in California or a sister state of the United States of
• America which is the sole member of such a corporation or
association.
(h) 'Revenue' means amounts received by the City as
repayment of principal, interest, and all other charges with
respect to a loan under this ordinance, any proceeds received by
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• the City from mortgage, hazard or other insurance on or with res-
pect to such a loan, all other rents, charges, fees, income and
receipts derived by the City from the financing or refinancing of
a health facility under this ordinance, any amounts received by
the City as investment earnings on moneys deposited in a reserve
fund or any similar fund securing bonds, and such other moneys as
the Council may, in its discretion, lawfully designate as
revenues.
3.26.040 Powers
The City Council shall, within the context of this
ordinance, have the following powers:
(a) Loan For Health Facility
The City may make, purchase, or otherwise contract for
the making of, a secured or unsecured loans, upon such terms and
• conditions as the City shall deem proper, to any participating
health institution for the cost of acquiring, constructing,
rehabilitating or improving a health facility or financing
thereof or of working capital therefor, including reimbursement
to such participating health institution of costs already
expended for such such purpose.
(b) Loan to Refund or Refinance Health Facility
The City may make, purchase, or otherwise contract for
the making of a secured or unsecured loan, upon such terms and
conditions as the City shall deem proper, to any participating
health institution or exchange its bonds in order to refund or
refinance outstanding obligations of such participating health
institution incurred to finance the cost of acquiring, construct-
ing, rehabilitating or improving a health facility or financing
• of working capital for such health facility, whether such obliga-
tions were incurred prior to or after the enactment of this ordi-
nance, if the City finds that such refunding or refinancing is in
the public interest and either alleviates a financial or operat-
ing hardship of such participating health institution, or is in
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connection with other financing by the City for such participat-
• ing health institution or may be expected to result in lower
charges or containment of the rate of increase in hospital rates
and savings to third parties, including government, and to others
who must pay for care, or any combination thereof.
(c) Sale or Lease of Health Faclity by Ci
The City may acquire, construct, enlarge, remodel,
renovate, alter, improve, furnish, equip, own or lease as lessee
a health facility for the purpose of selling or leasing such
health facility to a participating health institution and may
designate such participating health institution as its agent to
undertake to construct, enlarge, remodel, renovate, alter,
improve, furnish, and equip such health facility.
The City may sell or lease, upon such terms and condi-
tions as the City shall deem proper, to any such participating
• health institution any health facility owned by the City under
this ordinance, including a health facility conveyed to the City
in connection with a financing under this ordinance but not being
financed or refinanced hereunder.
(d) Recovery of Costs and Expenses by City
The City may charge participating health institutions
application, commitment, financing and other fees, to recover all
administrative and other costs and expenses incurred in the
exercise of the powers and duties conferred by this ordinance, or
impose fees, charges or other financial commitments to ensure,
that the exercise of such powers is in furtherance of the public
health, safety and welfare of the citizens of the City of Newport
Beach. The City Council is also specifically authorized to
• require the payment of such fees as it deems appropriate in order
to defray certain costs annually incurred by the City in
providing emergency health care.
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(e) Insurance or Guarantee of Payment
The City may obtain, or aid in obtaining, from any
department or agency of the United States or of the State of
California or any private company, any insurance or guarantee as
to, or of, or for the payment or repayment of, interest or
principal, or both, or any part thereof, on any loan, lease or
sale obligation or any instrument evidencing or securing the
same, made or entered into pursuant to the provisions of this
ordinance; and may accept payment in such manner and form as
provided therein in the event of a default by a participating
health institution and may assign any such insurance or guarantee
as security for bonds. The City also may provide for the
maintenance of letters of credit or other credit enhancement
devices, for the guarantee of, or for the payment or repayment
of, interest or principal, or both, or any part thereof, of any
• series of bonds issued pursuant to this ordinance.
(f) Fixing Rents, Fees, Rates, Etc.
The City may fix rents, payments, fees, charges and
interest rates for financing under this ordinance and may agree
to revise from time to time such rents, payments, fees, charges
and interest rates to reflect changes in interest rates on bonds,
losses due to defaults or changes in other expenses related to
this ordinance, including City administrative expenses.
(9) Deeds of Trust or Mortgages as Security
The City may hold deeds of trust, mortgages or other
security instruments as security for loans under this ordinance
and may pledge or assign the same as security for repayment of
bonds. Such deeds of trust, mortgages or other security instru-
ments may be assigned to, and held on behalf of the City by, any
bank or trust company within any state of the United States of
America appointed to act as trustee by the City in any resolution
or indenture providing for issuance of bonds.
(h) Employment of Experts and Consultants
The City may employ such engineering, architectural,
financial, accounting, legal or other services as may be
necessary in the judgment of the City for the pruposes of this
ordinance.
(i) Do All Things Necessary and Convenient
In addition to all other powers specifically described
in this ordinance, the City may do all things necessary or
convenient to carry out the purposes of this ordinance provided,
however, that at no time shall the City Council take any action
which would:
1. Constitute a
2. Constitute a
the City;
3. Obligate the
contingently, to impose an
make any appropriation for
indebtedness; or
debt of liability of the City;
pledge of the faith and /or credit of
City, directly, indirectly or
P form of taxation or assessment, or to
the payment of any bonds or
4. Obligate the City to pledge or otherwise encumber
any of its assets.
3.26.050 Bonds The City may, from time -to -time, issue
bonds for any of the purposes specified in subsections a, b or c
of section 3.26.040. Bonds shall be negotiable instruments for
all purposes, subject only to the provisions of such bonds for
registration.
1. Issuance of Limited Obligation Bonds
Every issue of bonds shall be a limited obligation of
the City payable solely from all or any specified part of the
revenues and the moneys and assets authorized in this ordinance
to be pledged or assigned to secure payment of bonds. Such reve-
nues, moneys or assets shall be the sole source of repayment of
such issue of bonds. Bonds issued under the provisions of this
ordinance shall not be deemed to constitute a debt or liability
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of the City or a pledge of the faith and credit of the City, but
shall be payable solely from specified revenues, moneys and
assets. The issuance of bonds shall not directly, indirectly, or
contingently obligate the City to levy or pledge any form of
taxation or to make any appropriation for their payment. All
bonds shall contain on the face thereof a statement to the
following effect:
Neither the faith and credit nor the taxing power of
the City of Newport Beach, the State of California, nor any
political subdivision thereof is pledged to the payment of the
principal of or premium or interest on this bond.
2. Amount of Bonds.
In determining the amount of bonds to be issued, the
City may include all costs of the issuance of such bonds,
reserves for debt service and for repairs, replacement, additions
• and improvements, and interest on the bonds during the
construction period and for such period thereafter as the City
may determine.
3. Type, Form and Sale of Bonds.
Bonds may be issued as serial bonds, term bonds,
installment bonds or passthrough certificates or any combination
thereof. Bonds shall be authorized by resolution of the Council
and shall bear such date or dates, mature at such time or times,
bear interest at such fixed or variable rate or rates, be payable
at such time or times, be in such denomination, be in such form,
carry such registration privileges, be executed in such manner,
be payable in lawful money of the United States of America at
such place or places, be subject to such terms of redemption and
• have such other terms and conditions as such resolutions or any
indenture authorized by such resolution to be entered into by the
City may provide. Bonds may be sold at either a public or
private sale and for such prices as the City shall determine.
Pending prepartion of definitive bonds, the City may issue
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•
•
•
temporary bonds, which shall be exchanged for such definitive
bonds when prepared.
4. Terms and Conditions of Bonds.
Any resolution authorizing any bonds or any issue of
bonds, or any indenture authorized by such resolution to be
entered into by the City, may contain provisions respecting any
of the following terms and conditions, which shall be a part of
the contract with the holders of such bonds:
(a) The terms, conditions and form of such bonds
and the interest and principal to be paid
thereon;
(b) Limitations on the uses and purposes to which
the proceeds of sale of such bonds may be
applied, and the pledge or assignment of such
proceeds to secure the payment of such bonds;
(c) Limitations on the issuance of additional
parity bonds, the terms upon which additional
parity bonds may be issued and secured, and
the refunding of outstanding bonds;
(d) The setting aside of reserves, sinking funds,
and such other funds as are necessary and the
regulation and disposition therof;
(e) The pledge or assignment of all or any part of
the revenues and the use and disposition
therof, subject to such agreements with the
holders of bonds as may then be outstanding;
(f) Limitation on the use of revenues for
expenditures for operating, administration or
other expenses of the City;
(g) Specification of the acts or omissions to act
which shall constitute a default in the duties
of the City, a participating health
institution to holders of such bonds, and
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providing the rights and remedies of such
• holders in the event of default, including any
limitations on the right of action by
individual bondholders;
(h) The appointment of a corporate trustee to act
on behalf of the City and the Holders of its
bonds, the pledge or assignment of loans,
deeds of trust, mortgages and any contracts or
agreements to such trustee, and the rights of
such trustee;
(i) The procedure, if any, by which the terms of
any contract with bondholders may be amended
or abrogated, the amount of such bonds the
holders of which must consent thereto, and the
manner in which such consent may be given; and
• (j) Any other provisions which the Council may
deem reasonable and proper for the purposes of
this ordinance and the security of the
bondholders.
5. Pledge of Revenues.
Any pledge of revenues, other moneys or assets, or any
centralized pool of said revenues, shall be valid and binding
from the time such pledge is made. Revenues, moneys and assets
so pledged and thereafter received by the City shall immediately
be subject to the lien of such pledge without any physicial
delivery thereof or further act, and the lien of any such pledge
shall be valid and binding as against all parties having claims
of any kind in tort, contract, or otherwise against the City,
• irrespective of whether such parties have notice thereof.
Neither the resolution nor any indenture by which a pledge is
created need be filed or recorded exept in the records of the
City.
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6. Liability of Council and Officers.
• Neither the members of the Council, the officers or
employees of the City, nor any person executing any bonds shall
be liable personally on the bonds or be subject to any personal
liability or accountability by reason of the issuance thereof.
7. Purchase of Bonds by City.
The City shall have the power out of any funds available
therefor to purchase its bonds. The City may hold, pledge,
cancel, or resell such bonds, subject to and in accordance with
agreements with the bondholders.
8. Compelling Performance.
Any holder of bonds issued under the provisions of this
ordinance, and any trustee appointed pursuant to any resolution
authorizing the issuance of bonds, except to the extent the
rights thereof may be restricted by such resolution or any
• indenture authorized thereby to be entered into by the City may,
either at law or in equity, by suit, action, mandamus, or other
proceedings, protect or enforce any and all rights specified in
law or in such resolution or indenture, and may enforce and
compel the performance of all duties required by this ordinance
or by such resolution or indenture to be performed by the City or
by any officer, employee or agent thereof, including the fixing,
charging, and collecting of rates, fees, interest, and charges
authorized and required by the provisions of such resolution or
indenture to be fixed, charged, and collected.
9. Refunding Bonds - -Use of Proceeds.
The City may issue bonds for the purpose of refunding
any bonds then outstanding, including the payment of any
• redemption premiums thereof and any interest accrued or to accrue
to the earliest or any subsequent date or dates of redemption,
purchase or maturity of such bonds.
(a) The proceeds of bonds issured for the purpose
of refunding any outstanding bonds may, in the
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S
• discretion of the City, be applied to the
purchase or retirement at maturity or
redemption of such outstanding bonds, either
at their earliest or any subsequent redemption
date or dates or upon the purchase or
retirement at the maturity thereof and may,
pending such application, be placed in escrow,
to be applied to such purchase or retirement
at maturity or redemption on such date or
dates as may be determined by the City.
(b) Pending use for purchase, retirement at
maturity or redemption of outstanding bonds,
any proceeds held in escrow pursuant to
subdivision (b) may be invested and reinvested
as provided in the resolution or indenture.
• Any interest or other increment earned or
realized on any such investment may be applied
to the payment of the outstanding bonds to be
refunded or to the payment of interest on the
refunding bonds. After the terms of the
escrow have been fully satisfied and carried
out, any balance of such proceeds and any
interest or increment earned on such proceeds
and any interest or increment earned or
realized from the investment thereof may be
returned to the City to be used by it for any
lawful purpose.
(c) All bonds issued pursuant to this section
• shall be subject to the provisions of this
ordinance in the same manner and to the same
extent as other bonds issued pursuant to this
ordinance.
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•
•
10. Independent Validity of Bonds.
The validity of the authorization and issuance of any
bonds is not dependent on and shall not be affected in any way by
any proceedings taken by the City for the making of any loan or
the entering into of any agreement, or by the failure to make any
loan or enter into any agreement, for which bonds are authorized
to be issued under this ordinance.
Section 3.26.070 Liberal Construction
This ordinance, being necessary for the welfare of the
City and its inhabitants, shall be liberally construed to effect
its purposes.
Section 3.26.080 Effect of Omission or Defect. If the
jurisdiction of the Council to order the proposed act is not
affected, any omission or any other defect in the proceedings
shall not invalidate such proceedings or the bonds issued pur-
suant to this ordinance.
Section 3.26.090 Authority. This ordinance is full
authority for the issuance of bonds by the City for the purposes
specified herein.
Section 3.26.100 Provisions of this Ordinance are
Complete, Alternative. This ordinance shall be deemed to provide
a complete, additional, and alternative method for doing the
things authorized thereby, and shall be regarded as supplemental
and additional to the power conferred by other laws. The is-
suance of bonds under the provisions of this ordinance need not
comply with the requirements of any other law applicable to the
issuance of bonds. The purposes authorized hereby may be
effectuated and the bonds may be issued for any such purposes
under this ordinance notwithstanding that any other law may pro-
vide for such purposes or for the issuance of bonds for like
purposes and without regard to the requirements, restrictions,
limitations or other provisions contained in any other law.
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•
•
Section 3.26.110 Inconsistency with Other Statutes.
To the extent that the provisions of this ordinance are
inconsistent with the provisions of any general statute, .a
special act or parts thereof, including the Newport Beach
Municipal Code provisions for Revenue Bonds, the provisions of
this ordinance shall be deemed controlling.
Section 3.26.120 Partial Invalidity. If any section,
subsection, sentence, clause or phrase of this ordinance is for
any reason held to be invalid or unconstitutional by the decision
of any court of competent jurisdiction, such decision shall not
affect the validity of the remaining portions of the ordinance.
The City Council hereby declares that it would have passed this
ordinance and each section, subsection, sentence, clause and
phrase thereof, irrespective of the fact that any one or more
sections, subsections, sentences, clauses or phrases be declared
invalid or unconstitutional.
This Ordinance was introduced at a regular meeting of
the City Council of the City of Newport Beach held on
the 23rd day of January , 1984, and was adopted
on the 13th day of February , 1984 by the following
vote, to wit:
AYES, COUNCILMEMBERS Hart, Maurer, Cox,
Heather, Strauss, Plummer, Agee
NOES, COUNCILMEMBERS None
ABSENT COUNCILMEMBERS None
ORP /Bonds
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