COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager’s Office

DATE:

February 13, 2007

BOARD MEETING DATE:

March 13, 2007

SPECIAL NOTICE/HEARING:

14 Day Newspaper

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Reyna Farrales, Deputy County Manager

SUBJECT:

Public Hearing and Resolution Approving California Statewide Communities Development Authority Revenue Bonds for the benefit of Catholic Healthcare West

RECOMMENDATION:

A)

Conduct a public hearing regarding the issuance by California Statewide Communities Development Authority (“CSCDA”) of bonds for the benefit of Catholic Healthcare West (“CHW”) and financing and refinancing the acquisition, improvement and equipping of certain facilities known as Sequoia Hospital located within the County of San Mateo.

B)

Adopt a resolution approving such bond issuance.

VISION ALIGNMENT:

Commitment: Responsive, effective and collaborative government.

Goal(s) 20: County decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain.

BACKGROUND:

CHW was founded in 1986 when the Sisters of Mercy Burlingame Regional Community and the Sisters of Mercy Auburn Regional Community merged their health care ministries into one organization.  The Sisters forged this union to enhance their charitable capabilities, expand the Catholic health care ministry, and promote social justice. The CHW network of more than 7,800 physicians and approximately 44,000 employees provides quality health care services during more than four million patient visits annually throughout California, Arizona, and Nevada. In 2006, CHW provided more than $465 million in community benefit and free care for the poor (over $800 million including the unpaid cost of Medicare).

CHW owns and operates Sequoia Hospital in the County of San Mateo located at 170 Alameda de las Pulgas in Redwood City. Sequoia Hospital opened in 1950 and is governed jointly by the Sequoia Hospital District and Catholic Healthcare West. The hospital's cardiovascular services department is among the best in the nation and the hospital is also known for its Northern California Diabetes Institute and birth center. Sequoia Hospital has 421 licensed beds and serves over 135,000 patient visits and admissions annually.

CHW has applied to CSCDA for its assistance in refinancing existing debt obligations and financing additional capital improvements through the issuance of revenue bonds in an amount not to exceed $985 million for 28 medical facilities throughout California, including Sequoia Hospital. CHW will use up to $125 million of the proposed bond issue at Sequoia Hospital to construct a 4-story patient tower with 104 patient beds, 8 operating rooms, 8 cardiovascular, interventional suites, and a 628 space parking structure. The proposed financing will also include renovations to the existing hospital along with seismic upgrades.

DISCUSSION:

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.

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

FISCAL IMPACT:

There is no fiscal impact to the County associated with any action the County takes.