| AGENDA ITEM REVIEW FORM |
3.B.
Industrial Development Authority
- Meeting Date:
- 10/02/2024
- Department Head:
- Kay Macuil
- Submitted By:
- Janet Taylor, Legal Secretary, Attorney's Office
ITEM:
Discussion and possible action on any and all matters regarding Resolution No. 2024-01. A resolution of the Board of Directors of the Industrial Development Authority of the City of San Luis, Arizona, granting final approval of the issuance of debt in the maximum stated principal amount of $80,000,000, in one or more series or issuances, the proceeds of which are to be lent to the Regional Center for Border Health, Inc. (Glenn J. Gimbut, General Counsel of the IDA Board)
SUMMARY:
The non-profit Regional Center for Border Health, Inc. ("RCBH") is building an approximately sixteen-bed (16-bed) hospital in San Luis, Arizona, to be called the "Border Health Medical Campus/San Luis Community Hospital." It is expected to be 64,000 square feet. It will be on a ten-acre (10-acre) parcel that the Regional Center for Border Health, Inc. owns. The anticipated address will be 311 South Oak Avenue, adjacent to the Regional Center for Border Health's Medical Mall, 151 South Oak Avenue.
RCBH seeks to borrow $80,000,000 to finance a portion of the costs associated with designing, constructing, and equipping the new hospital. In addition, the financing will pay for the costs associated with the issuance of the debt and will fund a reserve fund for unplanned contingencies that may arise. Revenue from the RCBH's healthcare operations less operation and maintenance expenses, will pay the principal and interest on the loan. The Regional Center for Border Health's obligation of the revenues will be on a parity with the lien of RCBH's outstanding USDA financing. RCBH is actively working with USDA to obtain the consent that the USDA requires for this.
The resolution submitted to the Board in this item will authorize Healthcare Facilities Revenue Bonds to be issued to finance the new hospital as described above. Neither the City of San Luis nor the IDA will be liable for the debt. Because RCBH is using the IDA process, all or a majority of the debt is expected to be issued as tax-exempt, allowing those who purchase the debt to be exempt from income tax payments on the income from the interest payments.
The bond lawyer or lawyers will be available by phone or video conference during the Board meeting.
RCBH seeks to borrow $80,000,000 to finance a portion of the costs associated with designing, constructing, and equipping the new hospital. In addition, the financing will pay for the costs associated with the issuance of the debt and will fund a reserve fund for unplanned contingencies that may arise. Revenue from the RCBH's healthcare operations less operation and maintenance expenses, will pay the principal and interest on the loan. The Regional Center for Border Health's obligation of the revenues will be on a parity with the lien of RCBH's outstanding USDA financing. RCBH is actively working with USDA to obtain the consent that the USDA requires for this.
The resolution submitted to the Board in this item will authorize Healthcare Facilities Revenue Bonds to be issued to finance the new hospital as described above. Neither the City of San Luis nor the IDA will be liable for the debt. Because RCBH is using the IDA process, all or a majority of the debt is expected to be issued as tax-exempt, allowing those who purchase the debt to be exempt from income tax payments on the income from the interest payments.
The bond lawyer or lawyers will be available by phone or video conference during the Board meeting.
RECOMMENDATION / SUGGESTED MOTION:
I MOVE TO ADOPT RESOLUTION NO. 2024-01 TO FINANCE THE BORDER HEALTH MEDICAL CAMPUS/SAN LUIS COMMUNITY HOSPITAL IN THE FORM AS PRESENTED.