R 2424
. .
RESOLUTION NO, 2424
RESOLUTION OF THE CITY OF ARROYO GRANDE
PROVIDING FOR AND AUTHORIZING INSTALLMENT PURCHASE FINANCING
FOR ARROYO GRANDE COMMUNITY HOSPITAL
WHEREAS, the City of Arroyo Grande. a municipal
~ corporation duly organized and existing under and pursuant to
the laws of the State of California (herein called the
"City"), is authorized under provisions of the California i
Government Code. particularly Chapter 5 of Part 2 of ,
Division 3 of Title 4 thereof (herein called the "Act"). to I
I
purchase, sell and lease both personal and real property for
the common benefit and as is necessary or proper for municipal
purposes;
. WHEREAS. vista Hospital Systems. Inc. . a California
nonprofit public benefit corporation (herein called the
"Corporation"), has proposed that the City provide installment
purchase financing for the health facilities of the
Corporation situated within the City (herein called the
"Health Facilities"). which program includes but is not
limited to financing of the acquisition. improvements and
betterments to facilities of the Corporation and such
facilities as are appurtenant or related thereto, acquisition
of equipment, refinancing outstanding indebtedness. and
payment of_fe~s and expenses incurred in connection with the
foregoing or in connection with the installment purchase
financing thereof as herein authorized (herein called the
"project");
WHEREAS. the City has full legal right. power and
authority under the Act to purchase, sell and lease real and
personal property for the common benefit and as is necessary
or proper for municipal purposes; and
WHEREAS. the City now desires to give its
preliminary approval to such financing;
NOW. THEREFORE. Bg IT RESOLVED by the City Council
of the City of Arroyo Grande. as follows:
{
i
I
,
1
. 7 . . I
i
1-
.~
,
! J
:
I
Section 1. The City Council of the City hereby
finds and determines that it is for the common benefit of the
City and its residents and it is necessary and proper for
municipal purposes within the terms of the Act that the City
assist the Corporation, which operates a general acute care
health facility located within the City, in financing the
project in the manner hereinafter in this Resolution provided
i in order to provide essential health care services and
facilities to the residents of the City, and to aid in
! acquiring, constructing, rehabili tating, improving and
refinancing health care facilities.
I
, Section 2. Pursuant to the Act, an installment
, purchase and installment sale financing in an aggregate
, principal amount not to exceed $26,000,000 is hereby
I
! authorized in order to finance the project through the
purchase of the Health Facilities by the City and the sale of
the Health Facilities to the Corporation.
Section 3. The City shall provide the 'installment
purchase financing for the Project as authorized herein
pursuant to agreements whereby the City will purchase the
Health Facilitjes from the Corporation and concurrently sell
the Health Facilities back to the Corporation, all under terms
whereby the City's obligation to make installment payments for
the purchase of the Health Facilities is limited to the
revenues it receives from the Corporation on said sale of the
Health Facilities. The financing hereby authorized shall be
consummated subject to the conditions that (i) the City by
resolution shall have first agreed to acceptable final terms
and conditions for the installment purchase and sale
, agreements and related trust agreement and all other documents
and agreements to be executed by the City in connection with
I such financing, (ii) all requisite governmental approvals
I
i shall have first been obtained, (iii) the City's obligations J
I under its installment purchase agreement with the Corporation
i shall be payable solely from revenues received from the
! Corporation pursuant to the installment sale agreement, and
i neither the taxing power nor the full faith and credit of the
City shall be pledged to the payment of the principal of or
interest on any such installment purchase agreement, and
(iv) the Corporation shall have eXecuted the letter agreement
referred to in Section 4 of this Resolution,
Section 4. The City Manager of the City is hereby
authorized to execute and deliver the letter agreement, in
substantially the form attached hereto as Exhibit A.
2
, 1. 6 ,
--
._-~-
Section 5. This Resolution shall take effect
immediately.
PASSED AND ADOPTED this 9th day of October, 1990 by
the following vote: i
AYES: Council Members Dougall, Smith, Olsen, Moots and Mayor Millis I
I
NOES: None I
I
ABSENT: None
I
~
ABSTAIN: None I
I
\0.- i
I
I
,
,
,
I
ha.~ i
i
City erk of the City ,
of Arroyo Grande
[SEAL] ,
i
I
(
i
, 3
.7. 6 I
I
i
,
I
I
I
I
-'-~,..,._--
i
I J
,
CITY CLERK'S CERTIFICATE
, I, Nancy A. Davi~ , City Clerk of the City of
,
I Arroyo Grande, California, hereby certify as follows:
The foregoing is a full, true and correct copy of a
resolution duly adopted at a regular meeting of the City
: Council of the City of Arroyo Grande duly and regularly and
legally held at the regular meeting place thereof on
October 9 , 1990, of which meeting all of the members of said
City Council had due notice and at which a majority thereof
were present.
At said meeting said resolution was adopted by the
following vote:
AYES: Council Members Dougall, Smith, Olsen, Moots and
Mayor Millis
NOES: None
ABSENT: None
ABSTAIN: None
I I have carefully compared the same with the original
, minutes of said meeting on file and of record in my office,
and the foregoing is a full, true and correct copy of the
original resolution adopted at said meeting and entered in
said minutes.
Said resolution has not been amended, modified,
supplemented or rescinded since the date of its adoption, and
the same is now in full force and effect.
I
Dated: January 9 , 1991. J
I
I
~(].~
City Cler of the City of
Arroyo Grande
[SEAL]
66151
.-----
---.-_.
Exhibit .A
-. [City of Arroyo Grande letterhead]
October 9, 1990
Vista Hospital Systems, Inc.
2370 Pine Street
San Francisco, California 94115
Re: Vista Hospital Systems, Inc,
Installment Purchase Financing
Ladies and Gentlemen:
The purpose of this letter is to set forth certain
terms and conditions under which the City of Arroyo Grande
(the .City.) 'will assist in the financing and refinancing of
the capital improvements program (the "Project") of vista
Hospital Systems, Inc. (the .Corporation").
The City and the Corporation intend to enter into
agreements with the law firm of Orrick, Herrington &
Sutcliffe, as special counsel and the investment banking firm
of The First Boston Corporation, as underwriter, to advise and
assist the City with respect to the installment purchase
financing of the Project.
By signing and returning the enclosed copy of this
letter you hereby agree to the fOllowing on behalf of the
Corporation.
1, The Corporation agrees to pay all costs
involved in any such installment purchase financing, including
by way of example and not limitation, fees and disbursements
f"" of special counsel and compensation to the underwriter and any
,
I
, A-I
Ii 7 . Ii I
-.----
-"-.---
.
other experts engaged by the Corporation or by the City in j
connection with any such financing, printing costs,
publication costs and costs of bond insurance. Such costs may
be paid from the moneys received from the underwriter in
connection with any such financing. In the event that any
such financing is not consummated for any reason, the
Corporation agrees to assume the City's obligations, if any,
for payment of all such costs.
2. The Corporation agrees to pay the cost of
preparation of any studies, reports or other documents
necessary to be prepared by or for the City to comply with the
California Environmental Quality Act.
3. The Corporation agrees to pay any and all costs
incurred by the City in connection with any legal action
challenging the consummation or validity of any such financing,
The City agrees to proceed, and to direct the
aforementioned special counsel and underwriter to 'proceed,
with the planning and preparation of the necessary proceedings
for the financing of the Project. The Corporation understands
that this letter agreement does not exempt it from any
requirements of the City, or any department or agency thereof
or other governmental body, that would apply in the absence of
the proposed financing, and compliance with such requirements
is an express precondition to any such financing by the City.
The Corporation further understands and agrees
that: (1) the installment purchase financing by the City is
contingent upon the City's being satisfied with all of the
terms and conditions of the financing agreements and other
related documents_ and agreements and that any such installment
purchase financing is in the best interests of the City, and
that the City shall not be liable to the Corporation or to any
other party if the City shall determine for any reason not to
consummate the financing; and (2) all of the conditions,
limitations and other provisions contained in Resolution No.
2424, adopted by the City on October 9, 1990 (a copy of which
is enclosed herewith) are expressly incorporated herein by
reference and made a part of this letter agreement.
A-2
.1. . ,
---- _.------
If the foregoing is satisfactory, kindly execute the
enclosed copy of this letter and return it to the City of
.Arroyo Grande, 214 E. Branch Street, Arroyo Grande, California
93420, Attention: City Manager. ,
i
Very truly yours, i
CITY OF ARROYO GRANDE
By:
City
r
CONFIRMED AND ACCEPTED:
VISTA HOSPITAL SYSTEMS, INC.
By
name:
title:
Dated:
!
!
,
I
,....--
A-3
, 78 , I