California Senate Bill 1953 requires all California General Acute-Care Hospitals to meet graduated structural and nonstructural seismic strengthening requirements by established deadlines of January 1, 2002, 2008, and 2030. The extent of work required depends on the structural design, age, and use of the impacted buildings. To ensure timely compliance with the seismic requirements, the City of Alameda Health Care District (“District”) began its planning efforts in 2020, in collaboration with Alameda Health System (“AHS”). Planning focused on actions that must be taken to comply with and fund the required seismic upgrades to Alameda Hospital. 

The District was authorized on January 10, 2002, subject to certain terms and conditions, including authorization to levy an annual special tax (the “Parcel Tax”) of up to $298 per parcel. Revenues raised by the Parcel Tax are to be used to defray operating expenses of Alameda Hospital, pay for capital improvement expenditures for Alameda Hospital and for debt repayment related to capital improvements to Alameda Hospital.

As a result of passage of the Parcel Tax measure in 2002 and the District’s ability to secure legislative approval of a statutory lien, there was only one viable financing option available to fund the planning, design and construction costs associated with Alameda Hospital’s seismic compliance project. That financing option was “Certificates of Participation” (“COPs”). COPs, secured by Parcel Tax revenues, are the funding source for principal and interest payments for the financing necessary to fund the seismic and related projects. The District Board approved this by passing Authorizing Resolution No. 2024-01 at its June 10, 2024 meeting. 

Section 5451.8 of the California Government Code (the “Lien Statute”) imposes a lien on the Parcel Tax revenues to secure the District’s obligations under the COPs. Pursuant to the Lien Statute, the Parcel Tax revenues are to be used first to fund any COP principal and interest obligation. To ensure compliance with this lien obligation, parcel tax dollars are deposited into a trust account that pays principal and interest payments prior to any other use.

The overall seismic project is comprised of three separate projects. The first project is focused on meeting 2030 seismic requirements. The second project repurposes underutilized hospital space to create an 18-bed short stay skilled nursing site. The third project replaces the exterior facade of the hospital. The total cost of the projects is estimated to be in excess of $70 million. Construction is scheduled to begin in November 2026.

The initial sale of COPs (2024 Financing Program, Series A) was in the amount of $13,500,000 and closed in August of 2024.  The sale of additional COPs (2026 Financing Program, Series B) closed in October of 2026 and raised an additional $58,000,000.