Memorandum

City of Lawrence

City Manager’s Office

TO:	David L. Corliss, City Manager
FROM:	Diane Stoddard, Assistant City Manager
CC:	Cynthia Wagner, Assistant City Manager
Date:	March 3, 2011
RE:	Industrial Revenue Bond Financing for Lawrence Memorial Hospital

Please place the following item on the City Commission agenda for March 8, 2011:

Declare an emergency and adopt on first and second reading Ordinance No. 8612, authorizing the issuance of up to $10.5 million in Industrial Revenue Bonds for Lawrence Memorial Hospital for the purpose of financing various improvements at the hospital and repealing Ordinance No. 8600.

Background: 

On December 7, 2010, the City Commission approved an ordinance authorizing the issuance of up to $13.5 million for LMH bonds.  However, because of market conditions LMH chose to delay the issuance of the bonds until 2011.  The only change between the previously approved ordinance and this one is reducing the amount to up to $10.5 million, changing the name of one document and changing the series designation and the dates.  The ordinance also repeals Ordinance No. 8600 passed on December 7, 2010.

The proposed use of the proceeds from the sale of the bonds is the same as in December.  The hospital intends to finance up to $10.5 million to 1) renovate the first floor of the main hospital facility to permit the expansion of laboratory facilities and services; 2) relocate the endoscopy lab and pain management services to the main hospital facility; 3) renovate the main kitchen at the hospital; 4) renovate the Fourth Street Medical Plaza to consolidate all information technology staff and relocate and expand the information technology departments; and 5) acquire various items of equipment and improvements necessary to support the health care services provided by the hospital. 

It is key to point out that with Industrial Revenue Bond financing, the City only serves as a conduit for the financing and assumes no obligation whatsoever regarding the repayment of the bonds for the project.  This type of financing, however, will assist the project with more favorable financing terms than conventional financing. 

Action Requested:

Declare an emergency and adopt on first and second reading Ordinance No. 8612, authorizing the issuance of industrial revenue bonds for various improvements at the Lawrence Memorial Hospital.