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AGENDA ITEM REVIEW FORM

7.I.

Regular City Council Meeting

Meeting Date:: 09/10/2025
Department Head:: Kay Macuil
Submitted By:: Kay Macuil, City Attorney, Attorney's Office

Action Requested:

Motion
Resolution

ITEM:

Public Hearing followed by discussion and possible action on any and all matters regarding Resolution No. 2375. A Resolution of the Mayor and City Council of the City of San Luis, Arizona, amending Resolution No. 2334 previously adopted October 2, 2024, concerning the issuance of debt by the Industrial Development Authority of the City of San Luis, Arizona, the proceeds of which are to be lent to the Regional Center for Border Health, Inc., and declaring an emergency. (Kay Marion Macuil, City Attorney)

(6 votes in favor are required to pass immediately as an emergency per A.R.S. § 19-142.)

A. Presentation by Staff and the Regional Center for Border Health, Inc.
B. Open Public Hearing
C. Call to the Public
D. Close Public Hearing
E. Discussion and Action on Resolution No. 2375

SUMMARY:

On October 2, 2024, the City Council passed Resolution No. 2334, to approve that the Regional Center for Border Health, Inc. (“RCBH”), an Arizona non-profit corporation, obtain financing through the Industrial Development Authority of San Luis, so RCBH's bonds would be exempt from federal income taxes. RCBH is developing a hospital in San Luis, Arizona.

Under Arizona Statute A.R.S. § 35-742, neither the city nor the Industrial Development Authority of San Luis (“IDA”) is liable in any manner for the loan.

At the October 2, 2024 Council Meeting, RCBH proposed borrowing $80,000,000 for the hospital project using the conduit of the IDA. IDAs have the legal power to issue debt exempt from federal income taxes. The tax exemption makes interest rates more favorable and debt more marketable than loans, where the income from interest payments is taxable. To date the bonds were never issued.

Before the City Council today is Resolution No. 2375, which amends Resolution No. 2334 for RCBH to borrow a total of $100,000,000 for the hospital project to cover increased construction and other project costs.

A public hearing is required before discussion of this item under A.R.S. § 35-721(B) for approval of the Industrial Development Authority of San Luis ("IDA") to issue the bonds. A Public Hearing is needed at this time because, under Section 147(f) of the Internal Revenue Service Code, the Bonds must be issued within one year after the public hearing held on October 2, 2024. Therefore, a new Public Hearing is needed.

RECOMMENDATION / SUGGESTED MOTION:

A. STAFF PRESENTATION
B. MAYOR NIEVES RIEDEL TO OPEN THE PUBLIC HEARING
C. MAYOR NIEVES RIEDEL TO CALL THE PUBLIC ON THIS ITEM
D. MAYOR NIEVES RIEDEL TO CLOSE THE PUBLIC HEARING
E. I MOVE TO APPROVE AND ADOPT RESOLUTION NO. 2375 AND DECLARE AN EMERGENCY

Fiscal Impact

IS THERE FISCAL IMPACT ASSOCIATED WITH THIS ITEM:: No
CITY/STATE/FEDERAL FUNDS:: N/A
TOTAL:: N/A
BUDGETED AMOUNT:: N/A
AVAILABLE AMOUNT TO TRANSFER:: N/A
ACCT NAME & GL#/REMAINING BALANCE BEFORE PURCHASE:: N/A

FISCAL IMPACT STATEMENT (IF THIS IS A BUDGET TRANSFER, YOU MUST ATTACH THE BUDGET ADJUSTMENT FORM):

There is no fiscal impact to the City of San Luis nor to the San Luis Industrial Development Authority. The Regional Center for Border Health, Inc. is responsible for payment of the loan.

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