Financing For The New Hospital
Capital costs for the new Laguna Honda were funded by $299 million in general obligation bonds and $100 million in revenue from the settlement of city consumer protection lawsuits against the top five cigarette companies filed in the late 1990s. Voters approved the funding package, known as Proposition A, in 1999 by 73%.
In the year and a half that the new Laguna Honda went out to bid, construction costs rose by 30%. The 30-year average had been 3% annually. Hospitals throughout the state that were rebuilding to meet more stringent seismic requirements imposed by California State Senate Bill 1953 were forced to reduce scope and add dollars. Laguna Honda was among them.
The city closed the gap with additional tobacco settlement revenue ($97 million) and city-issued certificates of participation, tax exempt securities used to raise capital funds or purchase equipment ($72 million). Including interest income, final construction funding was just under $585 million.
The Laguna Honda financing package contains some unique elements to reduce the cost to property taxpayers. In addition to the use of revenue from the settlement of the city’s tobacco lawsuits, California State Senate Bill 1128 authorizes the city to receive partial federal reimbursement for construction costs associated with certain seismic upgrades related to health care. As a result, up to 45% of Laguna Honda capital costs could be paid for by federal dollars.
Read more about this topic: Laguna Honda Hospital And Rehabilitation Center
Famous quotes containing the word hospital:
“Time rushes toward us with its hospital tray of infinitely varied narcotics, even while it is preparing us for its inevitably fatal operation.”
—Tennessee Williams (1914–1983)