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HomeMy WebLinkAbout85-23 - Amending Chapter 3.26 to Permit the Issuance of Revenue Bonds for Hospitals and Recreational FacilitiesORDINANCE NO. 85 -23 AN ORDINANCE OF THE CITY OF NEWPORT BEACH • AMENDING CHAPTER 3.26 TO PERMIT THE ISSUANCE OF REVENUE BONDS FOR HOSPITALS AND RECREATIONAL FACILITIES. THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DOES ORDAIN AS FOLLOWS: SECTION 1. Chapter 3.26 of the Newport Beach Municipal Code is amended to read as follows: Sections: 3. 26.010 3. 26.020 3. 26.030 • 3.26.040 3. 26.050 3.26.060 3.26.070 3.26.080 3.26.090 3.26.100 3.26.110 3.26.120 • Short Title. Purpose. Definitions. Powers. Bonds. Independent Validity of Bonds. Liberal Construction. Effective of omission or Defect. Authority. Provisions of this Ordinance are Complete, Alternative. Inconsistency with Other Statutes. Partial Invalidity. 3.26.010 Short Title. This chapter shall be known as the "Health Care and Recreation Facilities Revenue Bond Ordinance" of the City of Newport Beach. (Ord.). -1- 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 and recreation • 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, recreational facilities to lower costs of those services, to provide better and more efficient service than would otherwise be available, and will enable non - profit recreation facilities to provide sports or recreational opportunities that would otherwise be unavailable to residents of the City. 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, • or 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 institutions, 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 and recreation facilities and programs. -2- 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 institution necessary or incident to carrying out the purpose, as specified in subsection (a), (b) or (c) Section 3.26.040, 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, financed with the proceeds of any series of bonds issued • hereunder 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 expenses and other expenses necessary or incident to determining the feasibility or constructing any such project or incident to • determining the feasibility of constructing any such project or incident to the construction or acquisition or financing -3- 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 participating health institution providing or operating such facility, place or building. "Health facility" includes a portion of the above types of facilities and includes facilities operated in conjunction • with one of the above types of facilities 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) "Recreation facility" means any facility, place or building which is maintained and operated by a non - profit corporation for the purpose of providing facilities for sports and recreational activities, as well as equipment and -4- thereof. "Cost" also may include reimbursement of any such costs incurred by a participating institution prior to or after the enactment of this ordinance or prior to or after the enactment of a resolution 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 participating health institution providing or operating such facility, place or building. "Health facility" includes a portion of the above types of facilities and includes facilities operated in conjunction • with one of the above types of facilities 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) "Recreation facility" means any facility, place or building which is maintained and operated by a non - profit corporation for the purpose of providing facilities for sports and recreational activities, as well as equipment and -4- comprehensive programs to improve physical fitness, and which provides to all residents of the City such facilities and programs as designated in an agreement between the City and the participating recreation institution providing or operating such • facility, place or building. "Recreation facility" includes a portion of a recreation facility and includes facilities operated in conjunction with a recreation facility and required or useful, as determined by resolution of the Council, for the operation of a recreation facility, including but not limited to: an administration building or buildings to house offices of the participating recreation institution, a maintenance, storage, utility or parking facility and all structures or facilities related to any of the foregoing. "Recreation 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. (g) "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. (h) "Improvement of recreation facility" shall include, without limitation, the additions to or replacement of a recreation facility, or the acquisition of equipment in connection with the operation of such a facility. (i) "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 -5- corporation in California or a sister state of the United States of America which is the sole member of such a corporation or association. (j) "Participating recreation institution" means a • private non - profit corporation or association authorized by the laws of the State of California to provide or operate a recreation 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 recreation facility or undertakes the refunding or refinancing of obligations incurred to finance the acquisition, construction or improvement of a recreation facility, or any corporation which is a non - profit corporation in California or a sister state of the United States of America which is the sole member of such a corporation or association. (k) "Participating institution" means a participating health institution or a participating recreation institution. (1) "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 the City from mortgage, hazard or other insurance on or with respect to such a loan, all other rents, charges, fees, income and receipts derived by the City from the financing or refinancing of a health or recreation 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. (Ord. 84 -4 S 2 (part), 1984). 3.26.040 Powers. The City Council shall, within the context of this ordinance, have the following powers: • (a) Loan For Health or Recreation Facility. The City may make, purchase, or otherwise contract for the making of a -6- secured or unsecured loan upon such terms and conditions as the City shall deem proper, to any participating institution for the cost of acquiring, constructing, rehabilitating or improving a health or recreation facility or financing thereof or of working • capital therefor, including reimbursement to such participating institution of costs already expended for such purpose. (b) Loan to Refund or Refinance Health or Recreation 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 institution or exchange its bonds in order to refund or refinance outstanding obligations of such participating institution incurred to finance the cost of acquiring, constructing, rehabilitating or improving a health or recreation facility or financing of working capital for such facility, whether such obligations were incurred prior to or after the enactment of this ordinance, if the City finds that such refunding or refinancing is in the public interest and either alleviates a financial or • operating hardship of such participating institution, or is in connection with other financing by the City for such participating 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 or Recreation Facility by City. The City may acquire, construct, enlarge, remodel, renovate, alter, improve, furnish, equip, own or lease as lessee a health or recreation facility for the purpose of selling or leasing such facility to a participating institution and may designate such participating institution as its agent to undertake to construct, enlarge, remodel, renovate, alter, improve, furnish, and equip such facility. • The City may sell or lease, upon such terms and conditions as the City shall deem proper, to any such -7- participating institution any health or recreation facility owned by the City under this ordinance, including a 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 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 and recreation facilities and programs. (e) Insurance of 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 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 services 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 ME 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. (g) Deeds of Trust or ISortages 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 instruments 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 under this ordinance. (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 of the purposes 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 Council take any action which would: 1. Constitute a debt of liability of the City; 2. Constitute a pledge of the faith and /or credit of the City; 3. Obligate the City, directly, indirectly or contingently, to impose any form of taxation or assessment, or to make any appropriation for the payment of any bonds or indebtedness; or 4. Obligate the City to pledge or otherwise encumber any of its assets. (Ord. 84 -4 $ 2 (part), 1984). • -9- C7 • • 3.26.050 Bonds. the City may, from time to time, issue bonds for any of the purposes specified in subsections (a), (b) and (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 revenues, 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 of the City or 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, 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, installments 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 -10- 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 resolution 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 may determine. Pending preparation of definitive bonds, the City may issue 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 thereof; (e) The pledge or assignment of all or any part of the revenues and the use and disposition thereof, 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; -11- (g) Specification of the acts or omissions to act which shall constitute a default in the duties of the City or a participating instruction to holders of such bonds, and 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 physical 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 except in the records of the City. G. 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. -12- • • 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 or redemption, purchase or maturity of such bonds. (a) The proceeds of bonds issued for the purpose of refunding any outstanding bonds may, in the 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 -13- 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 or realized on any such 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. • 3.26.060 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 the 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. (Ord.84 -4 §2 (part), 1984). 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. (Ord. 84 -4 52 (part), 1984). 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 -14- shall not invalidate such proceedings or the bonds issued pursuant to this ordinance. (Ord. 84 -4 S2 (part), 1984). 3.26.090 Authority. This chapter is full • authority for the issuance of bonds by the City for the purposes specified herein. (Ord. 84 -4 $2 (part), 1984). 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 issuance 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 provide 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. (Ord. 84 -4 $2 (part), 1984). 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. (Ord. 84 -4 $2 (part), 1984). 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. -15- 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. (Ord. 84 -4 §2 (part), 1984). This Ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the 12th day of August, 1985, and was adopted on the 26th day of August , 1985 by the following vote: ATTEST: .? City Clerk AYES, COUNCILMEMBERS Agee, Cox, Hart, Heather, Maurer, Plummer, Strauss NOES, COUNCILMEVIBERS ABSENT COUNCILMEMBERS -16-