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AGENDA ITEM REVIEW FORM |
3.B.
Special City Council Meeting
- Meeting Date:
- 10/02/2024
- Department Head:
- Kay Macuil
- Submitted By:
- Kay Macuil, City Attorney, Attorney's Office
Action Requested:
Motion
Resolution
Resolution
ITEM:
Discussion and possible action on any and all matters regarding Resolution No. 2334. A resolution of the Mayor and City Council of the City of San Luis, Arizona, approving the issuance of debt issued by the Industrial Development Authority of the City of San Luis, Arizona, in the maximum stated principal amount of $80,000,000 in one or more series or issuance, the proceeds of which are to be lent to the Regional Center for Border Health, Inc., and declaring an emergency. (Glenn Gimbut, Assistant City Attorney)
(6 votes in favor are required to pass immediately as an emergency per A.R.S. § 19-142.)
SUMMARY:
Regional Center for Border Health, Inc. (“RCBH”), an Arizona non-profit corporation, proposes to develop a hospital in San Luis, Arizona. The hospital project will bring good jobs to San Luis.
RCBH proposes borrowing $80,000,000 for the hospital project using the conduit of the Industrial Development Authority of San Luis (“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.
A public hearing was held before this item on the City Council’s agenda. A.R.S. § 35-721(B) requires the City Council’s approval for the IDA to proceed.
Under Arizona Statute A.R.S. § 35-742, neither the city nor the IDA is liable in any manner for the loan.
For details, the Bond Attorney from the Law Firm Kutak Rock can answer questions by phone or videoconferencing when this item is called.
RCBH proposes borrowing $80,000,000 for the hospital project using the conduit of the Industrial Development Authority of San Luis (“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.
A public hearing was held before this item on the City Council’s agenda. A.R.S. § 35-721(B) requires the City Council’s approval for the IDA to proceed.
Under Arizona Statute A.R.S. § 35-742, neither the city nor the IDA is liable in any manner for the loan.
For details, the Bond Attorney from the Law Firm Kutak Rock can answer questions by phone or videoconferencing when this item is called.
RECOMMENDATION / SUGGESTED MOTION:
| I HEREBY MOVE TO APPROVE AND ADOPT RESOLUTION NO. 2334. |
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.