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:	December 2, 2010
RE:	Lawrence Memorial Hospital Industrial Revenue Bond Issuance

Please place the following item on the City Commission agenda for December 7, 2010:

Adopt on first and second reading, Ordinance No. 8600, authorizing the issuance of up to $13,500,000 in Industrial Revenue Bonds for Lawrence Memorial Hospital for the purpose of financing various improvements at the hospital.

Background: 

Earlier in November, the City Commission was provided information that the hospital was planning a bond issuance in order to finance various improvements at the hospital.  Specifically, the hospital intends to finance up to $13,500,000 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.  Attached is a letter of request from the hospital and a summary provided by bond counsel that outlines the provisions of the bond issuance. 

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. 

Next Steps:

The City Commission is requested to declare an emergency and adopt on first and second reading of an ordinance authorizing the issuance of the bonds.  The bond issuance is then anticipated to be closed prior either later in 2010, or early in 2011, depending upon market conditions.    

Action Requested:

Adopt on first and second reading, Ordinance No. 8600, authorizing the issuance of industrial revenue bonds for the Lawrence Memorial Hospital project.