COUNTY OF SAN MATEO

Inter-Departmental Correspondence

COUNTY MANAGER'S OFFICE

DATE:

March 20, 2002

BOARD MEETING DATE:

April 2, 2002

TO:

Honorable Board of Supervisors

FROM:

Paul Scannell, Assistant County Manager

SUBJECT:

Public Hearing and Approval of California Statewide Communities Development Authority Revenue Bonds for the benefit of Kaiser Foundation Hospitals

Recommendation

Conduct a public hearing regarding the issuance by California Statewide Communities Development Authority ("CSCDA") of bonds for the benefit of Kaiser Foundation Hospitals and affiliates ("Kaiser") and refinancing the acquisition, improvement and equipping of certain facilities known as Redwood City Medical Center, located within the County of San Mateo. Following the hearing, adopt a resolution approving such bond issuance.

Background

Kaiser Foundation Hospitals, a California nonprofit public benefit corporation ("Kaiser"), plans to borrow the proceeds of the revenue bonds proposed to be issued by CSCDA, in part, to finance the acquisition, construction, renovation, equipment and other capital improvements at the Redwood City Medical Center replacement facility and certain other Kaiser facilities. Through the tax-exempt borrowing of moneys for the above-mentioned improvements, it is anticipated that Kaiser will be able to continue to deliver health care in the communities it serves.

Discussion

Kaiser has applied to CSCDA for its assistance in financing the acquisition, construction and improvement of certain medical facilities through the issuance of revenue bonds in an amount not to exceed $500 million. CSCDA is a joint exercise of powers authority consisting of numerous California counties, cities and special districts, including the County of San Mateo. CSCDA is authorized in its Joint Exercise of Powers Agreement ("Agreement") to assist California charitable organizations through the issuance of revenue bonds. Said Agreement also requires a public approval by each participating member of CSCDA in which any portion of the project being financed is located. The federal tax law also requires a public hearing to be conducted by a government unit having jurisdiction over the area in which the financed facility is located and approval by the governing body prior to the issuance of tax-exempt bonds.

Orrick, Herrington & Sutcliffe LLP, bond counsel to CSCDA, has prepared and caused to be published the required notice of public hearing. Orrick also prepared the form of resolution submitted to the County of San Mateo Board of Supervisors for its consideration.

The County is not liable for payment with respect to the bonds.

A representative from Kaiser and CSCDA will be present at the Board of Supervisors meeting to respond to any questions.