HomeMy WebLinkAboutA029 - Council Action Form dated September 11, 2012 �XPI
.. OLD CAF
#27
9-11-12
ITEM # 30
DATE: 08- 44-12
-- COUNCIL ACTION FORM
SUBJECT: SETTING SEPTEMBER 11, 2012, AS THE DATE OF PUBLIC HEARING
FOR CREEL AUTHORIZATION
CENTERHOSPITAL SERIES 2012, IN AN AMOUNEVENUE T
MARY GREELE
NOT TO EXCEED $26,000,000
BACKGROUND:
Mary Greeley Medical Center (MGMC) is in the process of implementing a major facility
expansion to continue to provide quality regional medical services. The Medical Center
also has an opportunity for savings by refunding outstanding Series 2003 bonds. The
Municipal Code section that specifies duties and authorities of the Hospital Trustees
does not delegate activities related to the issuance and sale of revenue bonds.
Therefore, Council action is required to issue revenue bonds for the Hospital.
Since revenue bonds are being issued, only revenues from MGMC will be used to
pay back the bonds. Even though the issuance of revenue bonds by MGMC does not
create a financial obligation or pledge of credit or taxing authority for the City of Ames,
failure to follow through with bond payments could have a negative impact on the future
credit of the City. Therefore, when available, the City Council previously required
MGMC to purchase insurance to protect the City in the unlikely event of default. Since
this type of insurance is no longer available, this bond issue will not be insured.
However, it should be remembered that because of the strong financial condition of the
Hospital, the City Council supported the most recent issuance of hospital revenues
bonds even without the insurance protection.
ALTERNATIVES:
1. Establish September 11, 2012, as the date to hold a public hearing and take action
to authorize the issuance of Hospital Revenue Bonds, Mary Greeley Medical Center
Series 2012, in an amount not to exceed $26,000,000.
2. Delay the hearing on the issuance of Hospital Revenue Bonds.
MANAGER'S RECOMMENDED ACTION:
Mary Greeley Medical Center provides quality medical services to both Ames and a
large surrounding area, and is a major economic contributor to the community.
Issuance of these bonds is needed to provide funding for the Medical Center's planned
facility expansion, and will also provide savings by refunding outstanding bonds.
Issuance of these bonds involves no financial obligation on the part of Ames property
taxpayers.
1
Therefore, it is the recommendation of the City Manager that the City Council adopt
Alternative No. 1, thereby establishing September 11, 2012, as the date to hold a public
hearing and take action to authorize the issuance of Hospital Revenue Bonds, Mary
Greeley Medical Center Series 2012, in an amount not to exceed $26,000,000.
2