Henry Legaspi, the secretary for the hospital district, told the district trustees the $250,000 "will not be available."
"The money will be put towards paying off the debt sooner and will not be given to the district," Legaspi said.
"That's the way it's got to be."
In the next week the authority will be refinancing and restructuring the bonds to take advantage of low interest rates.
The authority is a joint powers association made up of members of the hospital district board and the City Council.
It was created in 1996 to manage and purchase the $9.235 million bond issue taken out to pay the hospital district's debts.
David Ouzan, a hospital district trustee, had said at previous meetings that the trustees would "fight" to receive $250,000 annually from the authority when the bonds were restructured.
The trustees were going to use the money and property tax revenue to offer services at the hospital building on Highway 98 that has been "temporarily closed" since Dec. 20, 1997.
A taxpayers' group threatened to file an injunction against the city if it had decided to give the district the $250,000.
Rudolfo Moreno is the treasurer for the authority and a member of the United Taxpayers of Imperial County group.
He said the deal he brokered with the city on behalf of the group "is a good deal for the authority and a good deal for them."
"The authority had to give the district $250,000 a year until the bonds are paid off but in return for them giving up that right, the authority will pay down a large portion of their debt," Moreno said Thursday night.
While the district had been entitled to the $250,000, it could never use the money to provide medical services because the money was tied up paying off debt.
Now that part of the debt will be paid and the district won't be receiving the $250,000 again, the trustees are looking toward offering medical services by using only the $220,000 taken in annually in property tax revenue.
Eduardo Rivera, the attorney for the district, and Legaspi briefed the trustees and "gave them options" of what to do next.
One option presented by Legaspi would have the hospital trustees ask a doctor and a small staff to set up a clinic in the front of the building to offer urgent-care services.
Legaspi said he has talked to two doctors who have showed interest in coming to Calexico.
Another option would be for the district trustees to run a care center themselves.
The trustees decided against that after deliberation between the trustees and legal counsel.
They unanimously directed Legaspi to get firm commitments from the doctors so they could look over the proposals.
The district and Legaspi cannot move on those proposals until the new bond issuance is finalized and the district knows exactly how much of its debt will be paid.
Rivera told the trustees that the exact amount to be paid isn't final and they could influence it to their benefit.
"You, the elected members, need to talk to the individual members of the City Council so they understand your efforts are in good faith to provide medical services," Rivera said.
He said the $450,000 loan provided to the district by the city Redevelopment Agency in 1998 has a "high-rate" of 10 percent interest.
He said it is possible the City Council, seated as the RDA board, could decide to waive interest or help the district in other ways.
Robert Swerdling of Minneapolis-based Piper and Jaffrey Financial Underwriter is working with bond holders in New York this week to finalize the sale of the bonds that would refinance the more than $9 million the authority owes.
By refinancing the bond now, the authority can take advantage of low interest rates and restructure the bonds so they are paid off sooner than previously anticipated.
Staff Writer Aaron Claverie can be reached at 337-3419.