Chapter 4.80 — CITY OF PASADENA HEALTH FACILITIES REVENUE BOND LAW

This chapter may be cited as the city of Pasadena "health facilities revenue bond law."

(Ord. 5519 § 1 (part), 1981)

The board of directors finds and declares that it is necessary, essential, a public purpose and a municipal affair for the city to be authorized to provide financing to health institutions serving the city that provide essential services to residents of the city in order to aid such health institutions in containing costs and thereby to enable such health institutions to establish lower charges or containment of the rate of increase in hospital rates. Unless the city intervenes to provide such financing or refinancing, such rates and charges may increase at an ever accelerated pace because such health institutions cannot obtain financing at equivalent cost from private sources.

(Ord. 5519 § 1 (part), 1981)

Unless the context otherwise requires, the terms defined in this chapter shall have the following meanings:

A.

"Bonds" means any bonds, notes, certificates, debentures or other obligations issued by the city pursuant to this chapter and payable exclusively from revenues as in this chapter defined, and from any other funds specified in this chapter upon which such obligations may be made a charge and from which they are payable.

B.

"Cost" means the total of all costs incurred by or on behalf of a participating health institution as are approved by the city as reasonable and necessary for carrying out all works and undertakings necessary or incident to acquisition, construction, financing or refinancing of a health facility. "Cost" shall include all such costs, including costs for construction undertaken by a participating health facility as its own contractor, which under generally accepted accounting principles are not properly chargeable as an expense of operation and maintenance.

C.

"Health facility" includes multilevel facilities, an institutional arrangement where a residential facility for persons 62 years or older is operated as a part of, or in conjunction with, an intermediate care facility, a skilled nursing facility or a general acute care hospital as those terms are defined in Section 15432 of the California Government Code. "Health facilities" also includes outpatient mental health facilities.

D.

"Participating health institution" means a private nonprofit corporation or association authorized by the laws of the state to provide or operate a health facility as defined in this chapter and which, pursuant to the provisions of this chapter, undertakes the financing of the acquisition and construction of a health facility or undertakes the refunding or refinancing of obligations incurred to finance the acquisition and construction of a health facility.

E.

"Revenues" means amounts received by the city as repayment of principal, interest, and all other charges with respect to a loan under this chapter, 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 facility under this chapter, 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 board may, in its discretion, lawfully designate as revenues.

(Ord. 6255 § 1, 1988; Ord. 6130 § 1, 1986; Ord. 5519 § 1 (part), 1981)

The city may make, purchase, or otherwise contract for the making of a mortgage or other secured or unsecured loan, upon such terms and conditions as the city shall deem proper, to any participating health institution for the cost of acquiring or constructing a health facility or financing thereof; provided, however, that no such loan shall exceed the total cost of such health facility as determined by the participating health institution and approved by the city.

(Ord. 5519 § 1 (part), 1981)

The city may make, purchase, or otherwise contract for the making of a mortgage or other secured or unsecured loan, upon such terms and conditions as the city shall deem proper, to any participating health institution to refund or refinance outstanding obligations of such participating health institution incurred to finance the cost of acquiring or constructing a health facility, whether such obligations were incurred prior to or after the enactment of the ordinance codified in this chapter, 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 health institution, or is in connection with other financing by the city for such participating health institution or may be expected to result in lower charges or containment of the rate of increase in hospital rates and a saving to third parties, including government, and to others who must pay for care, or any combination thereof.

(Ord. 5519 § 1 (part), 1981)

The city may acquire, construct, enlarge, remodel, renovate, alter, improve, furnish, equip, own and 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 conditions as the city shall deem proper, to a participating health institution any health facility owned by the city under this chapter, including a health facility conveyed to the city in connection with a financing under this chapter but not being financed or refinanced hereunder.

(Ord. 5519 § 1 (part), 1981)

The city may charge participating health institutions application, commitment, financing and other fees, in order to recover all direct administrative and other costs and expenses incurred in the exercise of the powers and duties conferred by this chapter.

(Ord. 5519 § 1 (part), 1981)

The city may obtain, or aid in obtaining, from any department or agency of the United States or of the state 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 chapter; and may accept payment in such manner and form as provided therein in the event of default by a participating health institution, and may assign any such insurance or guarantee as security for bonds.

(Ord. 5519 § 1 (part), 1981)

The city may fix rents, payments, fees, charges and interest rates for financing under this chapter 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 chapter, including city administrative expenses.

(Ord. 5519 § 1 (part), 1981)

The city may hold deeds of trust or mortgages as security for loans under this chapter and may pledge or assign the same as security for repayment of bonds. Such deeds of trust or mortgages may be assigned to, and held on behalf of the city by, any bank or trust company appointed to act as trustee by the city in any resolution or indenture providing for issuance of bonds.

(Ord. 5519 § 1 (part), 1981)

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 purposes of this chapter.

(Ord. 5519 § 1 (part), 1981)

In addition to all other powers specifically granted by this chapter, the city may do all things necessary or convenient to carry out the purposes of this chapter.

(Ord. 5519 § 1 (part), 1981)

A.

The city may, from time to time, issue bonds for any of the purposes specified in Sections 4.80.110, 4.80.120, and 4.80.130. Bonds shall be negotiable instruments for all purposes, subject only to the provisions of such bonds for registration.

B.

Every issue of bonds shall be a limited obligation of the city payable from all or any specified part of the revenues and the moneys and assets authorized in this chapter 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 chapter 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 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 is pledged to the payment of the principal of, or premium or interest on this bond."

(Ord. 5519 § 1 (part), 1981)

In determining the amount of bonds to be issued, the city may include all costs of the issuance of such bonds, reserve funds, and capitalized bond interest.

(Ord. 5519 § 1 (part), 1981)

Bonds may be issued as serial bonds, term bonds, installment bonds or pass-through certificates or any combination thereof. Bonds shall be authorized by resolution of the board 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 denominations, be in such form, either coupon or registered, 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 a public sale and for such prices as the city shall determine. Pending preparation of definitive bonds, the city may issue temporary bonds, which shall be exchanged for such definitive bonds when prepared.

(Ord. 5519 § 1 (part), 1981)

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 or a participating health institution;

G.

Specification of the acts or omissions to act which shall constitute a default in the duties of the city or a participating health institution 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 other contracts 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 board may deem reasonable and proper for the purposes of this chapter and the security of the bondholders.

(Ord. 5519 § 1 (part), 1981)

Any pledge of revenues or other moneys or assets pursuant to the provisions of this chapter 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.

(Ord. 5519 § 1 (part), 1981)

Neither the members of the board, 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.

(Ord. 5519 § 1 (part), 1981)

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.

(Ord. 5519 § 1 (part), 1981)

Any holder of bonds issued under the provisions of this chapter or any of the coupons appertaining thereto, 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 chapter 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.

(Ord. 5519 § 1 (part), 1981)

A.

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.

B.

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 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.

C.

Pending use for purchase, retirement at maturity or redemption of outstanding bonds, any proceeds held in escrow pursuant to subsection B of this section 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 from the investment thereof may be returned to the city to be used by it for any lawful purpose.

D.

All bonds issued pursuant to this section shall be subject to the provisions of this chapter in the same manner and to the same extent as other bonds issued pursuant to this chapter.

(Ord. 5519 § 1 (part), 1981)

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 chapter.

(Ord. 5519 § 1 (part), 1981)

This chapter, being necessary for the welfare of the city and its inhabitants, shall be liberally construed to effect its purposes.

(Ord. 5519 § 1 (part), 1981)

If the jurisdiction of the board to order the proposed act is not affected, any omission of any officer or the city in proceedings under this chapter or any other defect in the proceedings shall not invalidate such proceedings or the bonds issued pursuant to this chapter.

(Ord. 5519 § 1 (part), 1981)

This chapter is full authority for the issuance of bonds by the city for the purposes specified herein.

(Ord. 5519 § 1 (part), 1981)

This chapter shall be deemed to provide a complete, additional, and alternative method for doing the things authorized hereby, and shall be regarded as supplemental and additional to the powers conferred by other laws. The issuance of bonds under the provisions of this chapter need not comply with the requirements of any other law applicable to the issuance of bonds. The purposes authorized hereby may be effectuated and bonds may be issued for any such purposes under this chapter, 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. 5519 § 1 (part), 1981)

To the extent that the provisions of this chapter are inconsistent with the provisions of any general statute or special act or parts thereof, the provisions of this chapter shall be deemed controlling.

(Ord. 5519 § 1 (part), 1981)

If any provision of this chapter or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect any other provision or application of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared to be severable. The board declares that it would have adopted and passed this chapter and each chapter, section, subsection, sentence, clause, phrase and word hereof, irrespective of the fact that any one or more of the other chapters, sections, subsections, sentences, clauses, phrases or words hereof be declared invalid or unconstitutional.

(Ord. 5519 § 1 (part), 1981)