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7.B. - Page 1 <br />REPORT <br />To the Honorable Mayor and City Council <br />From the City Manager <br />March 19, 2012 <br />SUBJECT <br />Public hearing on issuance of bonds by the California Statewide Communities <br />Development Authority for Kaiser Permanente. <br />RECOMMENDATION <br />1. Hold public hearing on California Statewide Communities Authority's proposed <br />issuance of bonds on behalf of Kaiser Permanent; and <br />2. Approve resolution authorizing Statewide Communities Development Authority to <br />issue up to $2,000,000 of bonds on behalf of Kaiser Permanente and affiliated <br />agencies in connection with the construction and improvement of health facilities <br />located in Redwood City. <br />BACKGROUND <br />The City has received a request from the California Statewide Communities <br />Development Authority (CSCDA) to conduct a public hearing as required by the Internal <br />Revenue Code in order for CSCDA to issue tax - exempt revenue bonds in an aggregate <br />amount not to exceed $2 billion on behalf of Kaiser Permanente. <br />Founded in 1933, Kaiser is the largest nonprofit healthcare program in the country. <br />Kaiser will use the proceeds of the CSCDA bonds to finance facilities located in <br />Redwood City, Oakland, San Leandro, Anaheim and Fontana. The Redwood City <br />facility is at a location bounded by Veterans Boulevard, Maple Street, Marshall Street <br />and Walnut Street. Approximately $425 million of the $2 billion to be financed will be <br />used for the Redwood City facility. <br />CSCDA is a joint powers authority that is sponsored by the League of California Cities <br />and the California State Association of Counties. Redwood City is one of the more than <br />500 California cities, counties and special districts that are members of the CSCDA. <br />ANALYSIS <br />CSCDA intends for the bonds to be tax - exempt. The Internal Revenue Code requires <br />that the issuance of such "Private Activity Bonds" be approved by the elected body of <br />the governmental entity having jurisdiction over the area where the project to be <br />financed is located. This "approval" serves as the City's consent for CSCDA to be <br />