Santa Ana : $34-Million Bond Issue to Benefit Hospital

City officials and representatives of Western Medical Center have completed work on a $34-million bond issue that will pay for new equipment, clear some of the hospital’s debts and pay for future expansion plans.

Santa Ana is merely acting as “a conduit” for the bonds, said city spokeswoman Robin Simpson, and will have no liability for repayment. The partnership is only intended to provide the hospital with the city’s tax-exempt status, she said, adding that the city profits by getting “a first-rate hospital.”

Collateral for the bonds, Simpson said, would probably be the hospital property at 1001 N. Tustin Ave., and the bonds are guaranteed by Long-Term Credit Bank of Japan, according to a statement issued by Western Medical Center. Hospital President Wayne Schroeder said the bonds would help provide medical services to the community “at a time when government reimbursement for those services is declining.”

Schroeder also praised the city’s program. “This is an example of how the city, without exposure to itself, can become a partner in encouraging the development of modern health care facilities,” he said.

Simpson said that the city never has issued bonds for a hospital before and that there are no plans to do so again in the near future. She noted that Western Medical Center can qualify for the program because it is one of the few hospitals in the area operating on a nonprofit basis.

The deal was complete Tuesday. Schroeder said the hospital hopes to use the cash to finance expansion of its intensive and critical care units.