Whittier Municipal Code Ch. 3.08 Health and Educational Facility Revenue Bond Law

This chapter may be cited as the "city health and educational facilities revenue bond law."

(Ord. 2483 § 2, 1989: Ord. 2361 § 1 (part), 1985: prior code § 6600)

The council 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 certain health institutions which 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, the rates and charges may increase at an ever accelerated pace because the health institutions cannot obtain financing at equivalent cost from private sources. The council further 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 certain educational institutions which provide educational services primarily within the city so as to give this and future generations of youth the fullest opportunity to learn and develop their intellectual and mental capacities and to provide private institutions of higher education an additional means by which to expand, enlarge and establish dormitory, academic and related facilities, to finance such facilities and to refinance existing facilities.

(Ord. 2483 § 3, 1989; Ord. 2361 § 1 (part), 1985: prior code § 6601)

Unless the context otherwise requires, the terms defined in this section 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 provided in this chapter upon which the obligations may be made a charge and from which they are payable.

B. "City" means the city of Whittier.

C. "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" includes 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. "Cost" also means the total of all costs incurred by or on behalf of an educational institution as are necessary to carry out all works and undertakings incident to the acquisition, construction, financing or refinancing of an educational facility, including, but not limited to 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 an educational facility, 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, interest prior to, during and for a period after completions of such construction, provisions for working capital, reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations and improvements, the cost of engineering, financial and legal services, plans, specifications, studies, surveys, estimates, administrative expenses and other expenses necessary or incident to determining the feasibility of constructing any project or incident to the construction or acquisition or financing thereof.

D. "Council" means the city council of the city.

E. "Health facility" means any facility, place or building within the city (or, if located outside the city's boundaries, that it is owned by a participating health institution whose primary acute care facilities are located within the city), which is maintained and operated, principally, for the diagnosis, care, prevention and treatment of human illness, physical or mental, including as accessory uses, convalescence, rehabilitation and care during and after pregnancy, and which provides and will continue providing to residents of the city essential health care services designated as such in an agreement between the city and the participating health institution providing or operating the facility, place or building, but excluding nonacute care facilities such as rest homes unless maintained and operated by a participating health institution whose primary activity is the maintenance and operation of acute care facilities.

"Health care facility" includes a portion of one of the above types of facilities and includes the following facilities if operated in conjunction with one of the above types of facilities: 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, an office building, a research, maintenance, storage, utility or parking facility and all structures or facilities related to any of the foregoing or required or useful for the operation of a health facility.

"Health facility" does not include any facility or building used or to be used primarily for sectarian instruction or study or as a place for devotional activities or religious worship.

F. "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 section, 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.

G. "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 or educational 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 council may, in its discretion, lawfully designate as revenues.

H. "Educational facility" means a structure suitable for use as a dormitory, dining hall, student union, administration building, academic building, library, laboratory, research facility, classroom, health care facility (including for an institution of higher education which maintains and operates a school of medicine, structures or facilities providing or designed to provide services as a hospital or clinic, whether such hospital or clinic is operated directly by the institution of higher education or by a separate nonprofit corporation, the member or members of which consist of the educational institution or the members of its governing body), and parking, maintenance, storage or utility facility and other structures or facilities related thereto or required or useful for the instruction of students or the conducting of research or the operation of an institution for higher education, and the necessary and usual attendant and related facilities and equipment, which facility is located in the city or, if located outside the boundaries of the city, is part of an educational institution whose main campus is located within the city.

I. "Educational institution" means a private college or secondary school which neither restricts entry on racial or religious grounds or any other nonprofit educational institution empowered to provide a program of education beyond the high school level.

(Ord. 2483 § 4, 1989; Ord. 2361 § 1 (part), 1985: prior code § 6602)

If the jurisdiction of the council 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 the proceedings or the bonds issued pursuant to this chapter.

(Ord. 2361 § 1 (part), 1985: prior code § 6631)

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

(Ord. 2361 § 1 (part), 1985: prior code § 6632)

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

(Ord. 2361 § 1 (part), 1985: prior code § 6630)

This chapter shall be deemed to provide a complete additional and alternative method for doing the things authorized by this chapter, 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 by this chapter 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. 2361 § 1 (part), 1985: prior code § 6633)

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. 2361 § 1 (part), 1985: prior code § 6634)

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 deems proper, to any participating health institution or educational institution for the cost of acquiring or constructing a health or educational facility or financing thereof; provided, however, that with respect to participating health institutions, no such loan shall exceed the total cost of the health facility as determined by the participating health institution and approved by the city.

(Ord. 2483 § 5, 1989: Ord. 2361 § 1 (part), 1985: prior code § 6605)

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 deems proper, to any participating health institution or educational institution to refund or refinance outstanding obligations of such participating health or educational institution incurred to finance the cost of acquiring or constructing a health or educational facility, whether the obligations were incurred prior to or after the enactment of this chapter, if the city finds the refunding or refinancing is in the public interest and either alleviates a financial or operating hardship of the health or educational institution, or is in connection with other financing by the city for the participating health institution or educational 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. 2483 § 6, 1989: Ord. 2361 § 1 (part), 1985: prior code § 6606)

A. The city may acquire, construct, enlarge, remodel, renovate, alter, improve, furnish, equip, own and lease as lessee a health or educational facility for the purpose of selling or leasing the health or educational facility to a participating health institution or educational institution as its agent to undertake to construct, enlarge, remodel, renovate, alter, improve, furnish, and equip the health facility.

B. The city may sell or lease, upon such terms and conditions as the city deems proper, to a participating health institution or educational institution any health or educational facility owned by the city under this chapter, including a health or educational facility conveyed to the city in connection with a financing under this chapter but not being financed or refinanced under this chapter.

(Ord. 2483 § 7, 1989: Ord. 2361 § 1 (part), 1985: prior code § 6607)

The city may charge participating health institutions and educational facilities 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. 2483 § 8, 1989: Ord. 2361 § 1 (part), 1985: prior code § 6608)

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 or educational institution, and may assign any such insurance or guarantee as security for bonds.

(Ord. 2483 § 9, 1989: Ord. 2361 § 1 (part), 1985: prior code § 6609)

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. 2361 § 1 (part), 1985: prior code § 6610)

The city may hold deeds of trust or mortgages as security for loans under this chapter and may pledge or assign them as security for repayment of bonds. The 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. 2361 § 1 (part), 1985: prior code § 6611)

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. 2361 § 1 (part), 1985: prior code § 6612)

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. 2361 § 1 (part), 1985: prior code § 6613)

A. Issue. The city may, from time to time, issue bonds for any of the purposes specified in Sections 3.08.090 and 3.08.100.

Bonds shall be negotiable instruments for all purposes, subject only to the provisions of the bonds for registration.

B. Obligation Bonds. 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, money 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. 2361 § 1 (part), 1985: prior code § 6615)

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

(Ord. 2361 § 1 (part), 1985: prior code § 6616)

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 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 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 the resolution or any indenture authorized by the 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 preparation of definitive bonds, the city may issue temporary bonds, which shall be exchanged for the definitive bonds when prepared.

(Ord. 2361 § 1 (part), 1985: prior code § 6617)

Any resolution authorizing any bonds or any issue of bonds, or any indenture authorized by the 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 the bonds:

A. The terms, conditions and form of the bonds and the interest and principal to be paid thereon;

B. Limitations on the uses and purposes to which the proceeds of sale of the bonds may be applied, and the pledge or assignment of the proceeds to secure the payment of the 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 or educational 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 or educational institution to holders of such bonds, and providing the rights and remedies of the 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 the trustee;

I. The procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of the bonds the holders of which must consent thereto, and the manner in which the consent may be given; and

J. Any other provisions which the council may deem reasonable and proper for the purposes of this chapter and the security of the bondholders.

(Ord. 2483 § 10, 1989; Ord. 2361 § 1 (part), 1985: prior code § 6618)

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 the 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 the 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. 2361 § 1 (part), 1985: prior code § 6623)

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. 2361 § 1 (part), 1985: prior code § 6624)

Any pledge of revenues or other moneys or assets pursuant to the provisions of this chapter shall be valid and binding from the time the pledge is made. Revenues, moneys and assets so pledged and thereafter received by the city shall immediately be subject to the lien of the 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. 2361 § 1 (part), 1985: prior code § 6619)

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.

(Ord. 2361 § 1 (part), 1985: prior code § 6620)

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. 2361 § 1 (part), 1985: prior code § 6621)

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 the resolution or indenture, and may enforce and compel the performance of all duties required by this chapter or by the 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 the resolution or indenture to be fixed, charged and collected.

(Ord. 2361 § 1 (part), 1985: prior code § 6622)