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03/02/1990 (2) :~. ','. ,": "'.',~:,,, ;;,.:'. ,'. ..,:'......L.~...~:.'.~!.~ ~.'.'.,' ,.:.'.......:.,.,:.: .." .." ,+' ,.,.".' ~ .t, '''',1" \. ," \..... ,,' . I j .: , . , \ . > , . ' ' . . ...,. :..I...._:~.,.,:\.' .,~...~~..~.,',...,. '.., ,~,>'" ' j , .\ . .) CLEARW ATER HEALTH , FACILITIES AUTHORITY . MINUTES . Date Co V'] .---..........._*....h4......~_~.."'e'li->-.'.....\.t.........~.- ,.... ~H.,.. "....~........................l+n.....l1.'.'+.';,.. "I' ."1'.", . ... <: .;::. ':: \ .,.,.,.,.' .':.::~,:...::',:- .' , .. ,." " '.. >' '. ,.'. >, '.' .1...... '. '~I' ': 1" ' . ,. I ' . ., . - , ..," '",1,'., .. I' ,',', ,I .l.'~,: :."':: .;', : ;'''''J' ."I...~'-I q,',~' .'."" J ~ .,'.... \':',.~ ':~ :"'..' ",:'. .,' " : <';,'1'.\<,:,:"",:,.:. /~ CLEARWATER HEALTH FACILITIES AUTHORITY SPECIAL MEETING March 2, 1990 The City of Clearwater Health Facilities Authority met in special session in 'the Commission Chambers, City Hall, 112 S. Osceola Avenue, Clearwater, Florida, on Friday, March 2, 1990. The following members were present: C. J. Wollett, Chairman George Bouse, Vice-Chairman Frank George, Jr. (arrived at 2:10 P.M.) . Ruth Condon Florence Hosch ,:) Also present: Michael Wright, Asst. City Manager-Community Services, City of Clearwater M. A. Galbraith, Jr., City Attorney, City of Clearwater William Cantlin, Chief Accountant, City of Clearwater Grace Dunlap, Foley & Lardner, Bond Counsel . Gerald J. Neal, Esq., Foley & Lardner, Bond Counsel, National Healthplex, , Inc. Ronald Felty, National Healthplex, Inc., Buyer Jerry Harden, Administrator, Drew Village Nursing Center Brian L. Barth, Continental Medical Systems, Inc., Seller Michael Benedict, Morgan Stanley, Financial Advisor Cynthia E. Goudeau, City Clerk Mary K. Diana, Assistant City Clerk The meeting was called to order at 2:03 P.M. by Chairman Wollett. The purpose of this meeting is to consider the ratification of Resolution No., 90-1 authorizing the issuance of not exceeding $7,000,000 Revenue Bonds (National Healthplex, Inc. Project) Series 1990. III. Request Ratification of the Actions of Chairman: (A) Selection of Legal Counselj (8) Selection of Financial Advisor; (C) Approval of Expenses Incurred by Chairman in (A), (8), and (C) Long Distance Calls. . Chairman Wollett requested ratification of his actions in the selection of the firms of Bryant, Miller & Olive as Legal Counsel and Morton Stanley as Financial Advisor for the Authority. Mr. Bouse moved to accept the firms selected by the Chairman and the motion was duly seconded and carried unanimously. o CHFA 1 3/2/90 < .~ j' '. ~' ~~., . : c, ,:,.. ". ;~"l: ': ~; ~. F ,~ " '~) '0 IV. Consideration of Adoption of IGuide1ines" Similar to Those Adopted by Pinellas County Health Facilities Authority. Ms. Hosch moved to adopt the "Guidelines" as set forth in the Administrative Procedures for the Clearwater Health Facilities Authority. The motion was duly seconded and carried unanimously. Discussion ensued regarding whether or not the "Guidelines" would be effective retroactively and it was indicated they would be in effect from this point on. Mr. George arrived at 2:10 P.M. Assistant City Manager Michael Wright referred to page l1(G) of the Administrative Procedures requesting the one-quarter percent for indigent care be given to the County. Mr. Hosch moved to rescind the previous motion adopting the Administrative Procedures. The motion was duly seconded and carried unanimously. In response to a question, it was indicated the fee for indigent care could go directly to the County at closing. This fee could also be waived at the Authority's discretion. Mr. Bouse moved to adopt the Administrative Procedures as amended on page l1(G) by changing "City of Clearwater" to "Pinellas County. II The motion was duly seconded and carried unanimously. Michael Benedict, Morgan Stanley, indicated the material in regard to the sale of Drew Village Nursing Center is presently being reviewed. He indicated an inducement resolution was not necessary to recover costs and he felt adopting the resolution at ,this time would just show an intent to continue. Gerald J. Neal, Foley & Lardner, referenced a letter stating the Authority would be reimbursed all reasonable costs and expenses incurred by the Financial Advisor and Bond Counsel. He indicated the inducement resolution has been revised to reflect the appointment of Morgan Stanley & Company as Financial Advisor and approving the resolution would not obligate the Authority if not recommended by the Financial Advisor after review. Discussion ensued regarding how this project would benefit Clearwater and it was felt there were enough available nursing home beds in the community. A question was raised regarding whether or not the inducement resolution was in lieu of an application fee. Concern was expressed regarding costs to the Authority and it was indicated the adopted "Guidelines" covered all areas of expense. It was indicated the applicant would sign an indemnity agreement and pay the application fee up front. Discussion ensued in regard to the rating of the bonds, to whom the bonds would be offered and what would happen in the case of a default. It was CHFA 2 3/2/90 ;': ,:, :..', ~':'::\":,,;,.". ....'~"..~:,~.',..._:,.;:'.\..~.'.."I..\ :':.~.;:~,:..: ~.'.,:,..".':..:..,.\I~:, "I~'.' I,.'. ,':.'.I.,f"'~",' :;':" 't',\~",":;":' .,,",: .";, '.'(; . ',,'/.' .,Jr..,::,;'. " ,~ ~ indicated the bonds would not be rated in the top four categories, would be privately placed with a credited investor in $100,000 minimum denominations and the Authority would have no legal liability in case of default with NCNB acting as proposed trustee. Discussion ensued in regard to the obtaining a certificate of need in order to expand or improve a nursing home and it was indicated Housing Rehabilitative Services determines the need for additional nursing beds. Brian L. Barth, Continental Medical Systems, Inc., discussed the current debt service of $670,271.20 indicating, in the proposed bond issue, the portion for Drew Village Nursing Home would be approximately $591,000 with an approximate savings under the new bond issue of $80,000. He indicated that Continental has the responsibil ity to make the state aware of such a transaction. He said preliminary approval has been received from the state and that just a transfer not a reissuance of the certificate of need would be required. In response to a question, it was indicated no principal reduction in the debt service amount is taking place. Mr. Benedict indicated the new issuance will payoff the bonds reducing the debt service. He said the old bonds will be defeased with the new bonds and an accounting firm will be required to certify that there are sufficient funds to defease. Jerry Harden, Administrator of Drew Nursing Village, reported the facility serves 60 percent of Medicaid (indigent) patients and he indicated the elderly "",,,,, population is growing rapidly in Pinellas County. He said there are many ,~ certificates of need that have not been carried out in the County. The Drew Village Nursing facility is unique in rehabilitative care. Ronald Felty indicated the best cash flow is received through bond financing making more dollars available to the residents. Discussion ensued in regard to a 30-year bond term and it was indicated bond terms are calculated by a certified accountant to ensure that the useful life of the facility outlasts the term of the bonds. Discussion ensued in regard to the Form of Investor Letter and it was indicated it relieves the Authority and the City of any responsibil ity. In response to questions, it was indicated a rating in the top three categories cannot be achieved with a nursing facility, Continental Medical Systems, Inc. is unrated and the Drew Village Nursing Center does not qualify for insurance on the bonds. Concern was expressed regarding the Authority's purpose as this issue involves a private enterprise company wanting to sell a nursing facility to a not-for-profit corporation using the least expensive method. Mr. Felty indicated Continental Medical Systems is sell ing all their nursing home facilities, and selling to a not-for-profit corporation will assure the patients of quality care. v CHFA 3 3/2/90 ......~.ol).....io...Jj....~i''":",...,cT' ." . '.. '.,. .. ~ ',.,.';.,,:'. 1IiIIIIIIIIIII.'".,. "..\',.',:~.:;:':., ":::~:::~',i"{:,t:';\\lJ.:I:::;,;;:iA.:':":',g:, ..:;:'f,.';':,,'.l;,:,,,:::./:/<"t,:\' ,,:,::,: ,.,."".",.",\...:::,' I.'I"'''~ ':.' ,:" ~.,:.j',.'..u:".~.::'~~......,~~:.c'~.,:.i::'1..':;'..",.:J'.'..~.,;\' .,.t;~,',.;...:.: :1 ,l'.' /:+I:~.~;I:..:\:.;..~~.~~':< '.."...,...',:) . ,'; .':\'-,:': ..' ':"'..,:.....:,.: ::, ':',';' .'~ :~ Discussion ensued in regard to the number of nursing homes owned by not- for-profit companies and third party paying patients. It was felt that having a high level of Medicaid patients was not in the best interest for nursing homes, and it was indicated the state mandates the percentage of Medicaid patients with Drew Village having over 60 percent. The meeting recessed from 3:35 P.M. to 3:44 P.M. Concern was expressed regarding cross-collateral funding in case of default by one of the four nursing facilities, and it was indicated the bond holder wants this protection and it was felt it would be beneficial to the Clearwater facility. In response to a question, it was indicated the bonds would be issued for only the Drew Village Nursing Center with the mortgage on all four facilities securing the bonds. National Healthplex Inc. is a newly formed not-far-profit corporation and does not have any money invested in the project at the present time. ~.~ VII. Consideration of Resolution 90-01 to Issue Bonds Requested by Applicant, National Healthplex, Inc. Chairman Wcllett read the resolution by title only indicating there is no legal obligation to go forward. Ms. Hosch moved to pass and adopt Resolution 90-01 contingent upon the Financial Advisor's opinion. The motion was duly seconded. Upon roll call the vote was: UAyes: II Members Bouse, Condon, Hosch, George and Wollett. IINays:1I None. Discussion ensued in regard to the possibility of a TEFRA hearing and the validation of the bonds. It was felt that both the legal counsel and financial advisor should be present at the next meeting. No date had been set. VIII. Minutes of Special Meeting of February 14, 1990. Ms. Hosch moved to approve the minutes of the Special Meeting of February 14, 1990 as submitted. The motion was dUly seconded and carried unanimously. IX. Adjournment. The meeting ,adjourned at 4:10 P.M. ~ C I, Mary Kathryn Diana, Assistant City Cl k the City of Clearwater, Florida, certify the foregoing to be a true and correct copy of the minutes of the March 2, 1990 meeting of the Clearwater Health Fad.lit1e~ Authority, and all persons dealing with the Authority may rely upon this certificate. Witness my hand and the corporate seal of the City of Cl~arwater this /fd- day of ~ 1990. CHFA 4 ~ 3/2/90 '~~ A..i '/':'on ,~! .~.;..:.:,~,,:.,....~~"';. ... \~'" .. c , . ~' ,..' ' . ~, ..-.- 0'.. .", . >', "..'. . ,. " ~. '.:',~ .... I<<''''-...~I;},'''''' "::',:::';,:"':':,:::_"" ' . ,',', ,,", ,,' ",,>\',,< ":'i:),?j'. ,'. 'c'>,/~'iD>(" '::,,'i,:J;:/,;:::,:,.;~,t:,)>j:, ;')':<t ,. ,,' , , '" ,,', . " ' , ' '. " [I . Jl!lf'JtI ., I ("q, "", ",'" '" " ''''. ' , ,,'.. .~. . " .'..,~. d.'.. '.':: ..., ,": L;;'J., .', 0,,'): .: '. ",,' T}: ' """,,>':,,' : :.' ......, .',