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SPECIAL MEETING
EL CENTRO CITY COUNCIL
CITY HALL, CONFERENCE ROOM A
1275 MAIN STREET, EL CENTRO, CA
TUESDAY, MARCH 11, 2025, 5:30 P.M.
OPEN SESSION
The El Centro City Council met in a special meeting session on Tuesday, March 11, 2025, at 5:34 p.m. in Council Chambers, El Centro City Hall, 1275 Main Street, El Centro, California.
PRESENT: Council: Ellett, Carter, Marroquin, Camarena
City Clerk Wyles, Interim City Manager Paramo, City Attorney Martyn Evans ABSENT: None
Pledge of Allegiance to the flag of the United States of America was led by Council Member Ellett and Invocation was given by Mayor Pro-Tem Carter.
PRESENTATIONS:
1. Background video regarding the City’s role in ECRMC, AB918, and current negotiations for the transfer of the City’s real estate and license to IVHD.
2. Finance Presentation and Impact of Proposed City Payment, presentation by Elizabeth Fuchen, Interim Finance Director and Andy Heath, Consultant.
3. Staff report regarding transfer of El Centro Regional Medical Center to IVHD.
4. Public Input/Comments were received by Virginia Torres, Kay Pricola, Pete Rodriguez, Monica Perez, Sky Ainsworth, Edgard Garcia, Chris Bjornberg, Josh Schneiderman, Adriana R. Ochoa, Laura Goodsell, Katie Burnsworth, James Garcia, Mary Helen McCombs, Cheryl Walker, Dr. Andra LaFree, Arturo Proctor, Dr. Mervat Kelada, Jose Aldana and Ana Brinkerhoff.
City Council took a recess at 7:17 p.m. and reconvened at 7:29 p.m. with all Council Members present.
5. City Council discussed and took action on the City Term Sheet. Moved by Carter, second by Marroquin, to approve the City Term Sheet, the transaction if for IVHD to acquire all of the assets and liabilities of El Centro Regional Medical Center, AB918 requires that ECRMC will use commercially reasonable efforts to maintain at least $5,000,000 dollars of cash on hand. The assets transfer at closing include the four residential properties owned by the City on the street behind ECRMC and the clinic property at 385 Main as well as the main building at 1415 Ross. In addition to the above and exchange for full and complete release by IVHD of the City, ECRMC and their respective managers and affiliates of all claims and liabilities other than obligations under the definitive transaction documents. The City and ECRMC will transfer the assets of the hospital and the City and the city shall make a one-time cash payment to IVHD of $5,000,000 upon the closing. The definitive transaction documents will contain covenants requiring that all of the foregoing funds only be used to fund operations at El Centro Regional Medical Center and no event will the City be required to pay any amounts in excess of the above referenced cash payment, plus the expenses referenced below. This one-time payment is intended to
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support healthcare for city residents. Prior to the closing, ECRMC will enter into a three-year line of credit for $15,000,000 that will remain in place following the closing. The LOC shall have a balance of zero at closing. City will not guarantee, co-sign or anyway be responsible for the LOC. The city will cooperate with IVHD in the tax measure that has to be on the ballot by November 2026. The terms of the transaction will not change in the event that the tax measure does not pass. At closing ECRMC will terminate its employees and IVHD will offer to employ all of the terminated ECRMC employees effective immediately, as of the closing date, at compensation levels consistent with what each employee received immediately pre-closing. At or prior to closing, IVHD will establish or make available a private retirement plan for participation by transferred employees. These are the closing conditions which we had a lot of discussion about. Among other customary conditions to closing, at the closing, the assets must include at least $5,000,000 of cash on hand and the liability shall not include more than $29,000,000 dollars specified payables. Specified payables mean the sum of the following amounts calculated from ECRMC balance sheet. ECRMC accounts payables, accrued expenses and accrued compensation not including accrued benefit.
To summarize, assuming this is approved by the IVHD board as they have indicated they will do.
Parties will begin negotiating a written definitive agreement. That definitive agreement will be provided by the city. The initial draft of the definitive agreement will be provided by the city’s outside council.
No party will be obligated to indemnify another. IVHD will not be require to close the transaction in the event of a material brief of the representation or warranties prior to closing. They will not attempt to procure a type of insurance called representation and warranties insurance in connection with closing.
There will be certain standards provisions in the definitive agreement. The transfer of hospital licenses is a prerequisite consummating the transaction and the merger. IVHD will pay for this. IVHD will use its best efforts to operate ECRMC as a general acute care hospital for ten years post-closing. The City will be responsible through its El Centro Financing Authority to use commercially reasonable efforts to transfer the Preston-Hollow bond obligations to IVHD. Basically, on the same terms and conditions as currently existing in that bond issue. There are some additional provisions called binding provisions, which regulate the party’s relationship. They provide access to books and facilities they provide the ECRMC will conduct business in the same way it had been conducted but will coordinate with IVHD.
Each party bares its own cost and expenses. The city provides the $1.5 million dollar closing cost as it’s been discussed. The provision is governed by the laws of the State of California. There are certain nondisparagement clauses, press release clauses, standard provision that this is a binding agreement and it constitutes the entire agreement and basically says these provisions will terminate on the 90th day following the term sheet. If there has been no definitive agreement reached by that time.
Council members Camarena and Council Member Ellett had a few questions regarding the term sheet.
After a brief discussion, Council members voted.
AYES: Ellett, Carter, Marroquin
NOES: None
ABSENT: None
ASTAINED: Camarena
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ADJOURNMENT
With no further business the meeting was adjourned at 8:03 p.m. ____________________________
Norma Wyles, City Clerk
APPROVED BY:
_________________________
Sonia Carter, Mayor Pro-Tem