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HomeMy WebLinkAboutResolution - 2002-R0322 - Resolution Approving The Issuance Of A Financing Agreement - Covenant Health - 08/29/2002Resolution No. 2002-R 0322 Item No. 54 August 29, 2002 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LUBBOCK APPROVING THE ISSUANCE OF A FINANCING AGREEMENT FOR THE BENEFIT OF COVENANT HEALTH SYSTEM WHEREAS, Covenant Health System ("the Hospital") has requested the Lubbock Health Facilities Development Corporation (the "Corporation") to execute and deliver a master financing agreement, a schedule thereto and certain other documents to finance certain improvements to the health facilities owned and operated by the Hospital (the "Project"); WHEREAS, pursuant to Section 147(f) of the Internal Revenue Code of 1986 (the "Code") the issuance of certain obligations, including the master financing agreement and related documents, by the Corporation must be approved by the City of Lubbock (the "City"); and WHEREAS, pursuant to Section 147(f) of the Code, the Corporation has, following notice duly given, held a public hearing regarding the issuance of the master finance agreement and related documents and now desires to approve the issuance thereof; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK as follows: I. The City Council hereby approves the issuance of a Master Financing Agreement and related documents (the "Documents") by the Lubbock Health Facilities Development Corporation to finance the Project. It is the intent of the City Council that this resolution constitute approval of the issuance of such Document for the purposes of Section 147(1) of the Code, and does not otherwise constitute an endorsement of the issuance of the Documents. The City shall have no obligation of any kind with respect to the payments under the Documents. 2. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this resolution and the financing transaction approved hereby. DOCSSC1:306901.2 3. This resolution shall take effect immediately upon its passage. PASSED AND ADOPTED this 29th day of August, 2002, by the following vote: AYES: 6 NOES: o ABSENT: 1 .2 [SEAL] Attest: By �,�' ity Secretary 2 DOCSSC1:306901.2 Resolution No. 2002-RO322 Attachment A RESOLUTION RELATING TO THE AUTHORIZATION AND ISSUANCE BY THE LUBBOCK HEALTH FACILITIES DEVELOPMENT CORPORATION OF A MASTER FINANCING AGREEMENT WITH COVENANT HEALTH SYSTEM AND GE CAPITAL PUBLIC FINANCE, INC. AND APPROVING AND AUTHORIZING EXECUTION AND DELIVERY OF DOCUMENTS RELATED THERETO, RATIFYING THE HOLDING OF A PUBLIC HEARING AND OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the Lubbock Health Facilities Development Corporation (the "Issuer") is a nonprofit corporation and constituted authority, created by the City of Lubbock, Texas, in accordance with the Health Facilities Development Act (Chapter 221, Texas Health and Safety Code) (the "Act"), authorized to incur indebtedness for the purpose of acquiring, constructing, providing, improving, financing and refinancing health facilities in order to assist the maintenance of the public health, including financing the purchase of equipment; WHEREAS, Covenant Health System, a nonprofit public benefit corporation duly organized and existing under the laws of the State of Texas ("CHS"), has applied for the assistance of the Issuer in providing funds to purchase two medical transport helicopters to be used by CHS (the "Project"), all as more particularly described in that certain Master Financing Agreement ("MFA"), dated as of September 1, 2002, by and among the Issuer, CHS and GE Capital Public Finance, Inc. ("GECPF"), presented to the Board of Directors of the Issuer for consideration; WHEREAS, the necessity and convenience of the Project and the financing of the Project by means of the MFA have been fully examined and discussed, the instruments relating thereto (including, without limitation, Schedule No. 1 to the MFA, the Addendum Relating to Helicopter and form of Escrow Agreement) have been presented to the Board for its consideration at this meeting, and the material provisions of such documents have been described to the Board and fully considered at this meeting; and THIS BOARD OF DIRECTORS OF THE ISSUER HEREBY FINDS AND DETERMINES THAT: 1. The financing of the Project is required, necessary and convenient for health care within the State of Texas. 2. The financing of the Project by means of the MFA will improve the adequacy, cost, and accessibility of health care in the City of Lubbock and the State of Texas, and will assist in the maintenance of the public health and furtherance of, and is necessary and convenient to accomplish, the corporate purposes of the Issuer. I The operation of the Project will constitute a lawful activity, is qualified for approval and complies with and promotes the purposes and satisfies the requirements of the Act and our Statement of Policy. 4. All requirements for and prerequisites to final approval under the Board's Statement of Policy have been met, will be met prior to execution of the MFA or should be waived. Resolution (August 20, 2002) Page 1 5. The terms and conditions of the MFA and the above-described instruments relating thereto and the manner of disbursing the proceeds thereof, are advisable so long as the aggregate principal amount of Schedule No. 1 to the MFA does not exceed $10,000,000 and the net effective interest rate with respect to Schedule No. 1 to the MFA does not exceed fifteen percent (15%). The date, stated payment dates, interest rates, terms of prepayment and other terms of the MFA and Schedule No. 1 shall be as provided in the MFA, Schedule No. 1 and related documents, as finally executed. 6. A public hearing (the "Hearing") on the financing of the Project has been held with reasonable public notice, and the MFA is expected to be approved, in accordance with section 147(f) of the Internal Revenue Code of 1986, as amended, by the City Council of the City of Lubbock or the Mayor of the City of Lubbock, Texas. 7. The approval of the Application and execution of the MFA and the above-described instruments related thereto will be in the best interest of the City of Lubbock and its citizens. 8. To the extent that this Resolution conflicts with any prior resolution of the Board or any provision of the Board's Statement of Policy, this Resolution shall control. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Lubbock Health Facilities Development Corporation: 1. Acceptance of Application for Financing. The Board formally accepts and, as provided herein, approves the application made by Covenant Health System for the financing of two medical transport helicopters and related equipment. 2. Ratification of the Holding of a Public Hearing; Authorization of Action by Issuer Counsel to Publish Notice of Public Hearing, and Appointment of Hearing Officer. A public hearing required by federal income tax law is hereby authorized to be held on behalf of the Issuer and all action taken by or on behalf of the Issuer in furtherance thereof is hereby ratified. The actions of the President of the Issuer in authorizing the publication of notice and holding the public hearing are ratified. The acts of Diane Potter and her law firm, Orrick, Herrington & Sutcliffe, LLP, in causing public notice to be published are hereby ratified, on behalf of the Issuer. Further, the Notice of Public Hearing and the publication the publication thereof are hereby ratified. The acts of Don C. Dennis, Issuer's Counsel, acting as hearing officer, in holding the public hearing in accordance with the requirements of section 147(f) of the Internal Revenue Code of 1986 are hereby ratified on behalf of the Issuer. The selection of the time and place of such meeting by Don C. Dennis is further ratified. A copy of the Notice of Public Hearing and Minutes of said Hearing are attached to this Resolution as Appendix A and are incorporated herein by reference. 3. Approval of Transaction Documents. The Board, at the request of the Corporation, hereby approves, subject to the final approval of counsel to the Issuer, the terms of the MFA, Schedule No. 1, the Addendum Relating to Helicopter, and the Escrow Agreement, in substantially the forms and to the effect as presented to the Board. Resolution (August 20, 2002) Page 2 4. Execution of Transaction Documents. The President (or in the event of the absence or disability of the President, the Vice President) and, if required by the form of document, the Secretary (or in the event of the absence or disability of the Secretary, any Assistant Secretary) are authorized and directed to execute and deliver the MFA, Schedule No. 1, Addendum Relating to Helicopter, and to execute and deliver any and all certificates, agreements and other instruments described therein or determined by such officers to be appropriate, upon the conditions therein described; the President and the Secretary (and such alternates) are authorized, with the advice of counsel to the Issuer, to require, negotiate and approve such changes in the terms of each such instrument (prior to the execution and delivery thereof) as such officers shall deem necessary or appropriate, and such officers (and such alternates) are hereby appointed as a committee of two of the Board (the "Committee") for such purpose with power to exercise the authority of the Board in such regard, and the approval of the terms of each such instrument, with advice of counsel to the Issuer, by such officers shall be conclusively evidenced by their execution and delivery thereof, and such Committee is authorized to approve the final principal amount of Schedule No. 1 to the MFA (not to exceed $10,000,000 in aggregate principal amount), the net effective interest rate with respect to such Schedule No. 1 (not to exceed fifteen percent (15%); and 5. Transmittal of Notice of Intent to Sponsoring Entity. The President, Vice President or the Secretary of the Board of Directors of the Issuer are hereby severally authorized and directed to transmit to the City Council of the City of Lubbock, Texas, a notice relating to the financing of the Project and thethe execution of the MFA described herein and the other described documents relating thereto, substantially in the form of Appendix B to this Resolution, in accordance with Section 221.062 of the Act. Such notice shall be delivered to the City Council as soon as practicable but in no event later than the 15th day before the date of execution and delivery of the MFA. 6. Consummation of Transaction. The officers of this Board, or any of them, are authorized to take any and all action necessary to carry out and consummate the transactions described in the instruments approved hereby, to cause to be performed the obligations of the Issuer thereunder, and otherwise to give effect to the actions authorized hereby and the intent hereof. 7. Approval by Counsel. The form and substance of all documents and instruments to be executed and delivered in connection with this transaction shall be subject to approval of counsel for the Issuer. PASSED AND ADOPTED this 20th day of August, 2 02. -57A President ATTEST: Resolution (August 20, 2002) Page 3 Secretary APPENDIX A TO RESOLUTION NOTICE OF PUBLIC HEARING Resolution No. 2002-RO322 NOTICE IS HEREBY GIVEN that on June 28, 2002, a public hearing as required by Section 147(f) of the Internal Revenue Code of 1986 (the "Code") will be held with respect to the proposed issuance of a master finance agreement by the Lubbock Health Facilities Development Corporation in an amount not to exceed $12,000,000 for certain purposes, including the purchase and financing of certain equipment, including helicopters, and financing certain costs relating to the issuance of the finance agreement. The financed equipment will be used by Covenant Health System, a nonprofit corporation and an organization described in Section 501(c)(3) of the Code, and will be kept generally at 6006 North Cedar, West Airport District, Lubbock, Texas. In order for interest on the financing agreement to be exempt from federal income taxation, the Code requires that the issuance be approved by an appropriate elected official of the City of Lubbock (the "City") following a public hearing. Approval of the financing for this purpose does not create, and shall not be construed as creating, any debt, obligation, or liability of the City, nor approval of the project to be financed with the proceeds of the financing agreement to any other applicable provision of law. The hearing will commence at 10:00 a.m. or as soon thereafter as the matter can be heard, and will be held at Committee Room 103, City Hall of the City, 1625 13th Street, Lubbock, Texas. Interested persons wishing to express their views on the financing or on the nature and location of the project may attend the public hearing or, prior to the time of the hearing, submit written comments. Additional information concerning the financing and the hearing may be obtained from, and written comments should be addressed to, the Lubbock Health Facilities Development Corporation, c/o Don C. Dennis, Esq., 920 Avenue Q, Lubbock, Texas, 79401. Written comments must be received prior to the hearing. Dated: June 14, 2002. Resolution No. 2002-RO322 APPENDIX B NOTICE OF INTENTION TO EXECUTE MASTER FINANCING AGREEMENT STATE OF TEXAS ) CITY OF LUBBOCK ) LUBBOCK HEALTH FACILITIES ) DEVELOPMENT CORPORATION ) NOTICE IS HEREBY GIVEN TO THE CITY COUNCIL OF THE CITY OF LUBBOCK, TEXAS, IN ACCORDANCE WITH SECTION 221.062 OF THE TEXAS HEALTH AND SAFETY CODE THAT ON September 16, 2002, or as soon thereafter as possible, the Lubbock Health Facilities Development Corporation (the "Issuer") intends to execute and deliver a Master Financing Agreement, dated as of September 1, 2002 ("MFA"), with Covenant Health System ("CHS") and GE Capital Public Finance, Inc. ("GECPF"), and Schedule No. 1 thereto ("Schedule 1") and an Addendum Relating to Helicopters, all in an aggregate principal amount not to exceed $10,000,000 with a final payment not later than October 2012. I. The Health Facilities The proceeds of Schedule No. 1 will be used by CHS to finance the acquisition of two medical transport helicopters, including specialized avionics, which will replace helicopters used by CHS in and around the hospital and health facilities owned and operated by CHS in the Lubbock area. In addition, the proceeds of Schedule 1 will be used to pay placement costs with GECPF, legal and other fees and costs relating to the delivery of the MFA and Schedule 1. II. Project Costs The total projected cost of the project as described above will not exceed $10,000,000. Expenses associated with the execution and delivery of the MFA will not exceed $200,000. III. Necessity. Financing the project as described above is necessary in order to reduce the cost of health facilities necessary to promote the present and prospective health, safety and general welfare of the people of the City of Lubbock, Texas, and the State of Texas and to improve the adequacy, cost and accessibility of health care to the general public. IV. User The user of the health facilities being financed through the execution and delivery of the MFA and Schedule No.1 is CHS, a nonprofit corporation organized under the laws of the State of Texas ("CHS"). SIGNED and SEALED this day of August, 2002. LUBBOCK HEALTH FACILITIES DEVELOPMENT CORPORATION LIN President, Board of Directors FILED, this day of August, 2002, with the City Council of the City of Lubbock, Texas. CITY OF LUBBOCK, TEXAS City Secretary M:\LHFDC\COV-HEL\lhfdc res 8-20-02a.wpd (8-20-02) Resolution No. 2002-RO322 Attachment B NOTICE OF INTENTION TO EXECUTE MASTER FINANCING AGREEMENT STATE OF TEXAS CITY OF LUBBOCK LUBBOCK HEALTH FACILITIES DEVELOPMENT CORPORATION NOTICE IS HEREBY GIVEN TO THE CITY COUNCIL OF THE CITY OF LUBBOCK, TEXAS, IN ACCORDANCE WITH SECTION 221.062 OF THE TEXAS HEALTH AND SAFETY CODE THAT ON September 16, 2002, or as soon thereafter as possible, the Lubbock Health Facilities Development Corporation (the "Issuer") intends to execute and deliver a Master Financing Agreement, dated as of September 1, 2002 ("MFA"), with Covenant Health System ("CHS") and GE Capital Public Finance, Inc. ("GECPF"), and Schedule No. 1 thereto ("Schedule I") and an Addendum Relating to Helicopters, all in an aggregate principal amount not to exceed $10,000,000 with a final payment not later than October 2012. I. The Health Facilities The proceeds of Schedule No. 1 will be used by CHS to finance the acquisition of two medical transport helicopters, including specialized avionics, which will replace helicopters used by CHS in and around the hospital and health facilities owned and operated by CHS in the Lubbock area. In addition, the proceeds of Schedule 1 will be used to pay placement costs with GECPF, legal and other fees and costs relating to the delivery of the MFA and Schedule 1. II. Project Costs The total projected cost of the project as described above will not exceed $10,000,000. Expenses associated with the execution and delivery of the MFA will not exceed $200,000. III. Necessity Financing the project as described above is necessary in order to reduce the cost of health facilities necessary to promote the present and prospective health, safety and general welfare of the people of the City of Lubbock, Texas, and the State of Texas and to improve the adequacy, cost and accessibility of health care to the general public. IV. User The user of the health facilities being financed through the execution and delivery of the MFA and Schedule No. I is CHS, a nonprofit corporation organized under the laws of the State of Texas ("CHS"). SIGNED and SEALED this 0-6 day of August, 2002. LUBBOCK HEALTH FACILITIES DEVELOPMENT CORPORATION By: President, Board of irectors FILED, this A01 day of August, 2002, with the City Council of the City of Lubbock, Texas. CITY OF LUBBOCK, TEXAS By: ity Secretary M:ILHFDCICOV-HELlnotice to city.wpd (8-20-02) Resolution No. 2002-RO322 Attachment C MINUTES OF PUBLIC HEARING Lubbock Health Facilities Development Corporation Re: Master Financing Agreement among GE Capital Public Finance, Inc., and Lubbock Health Facilities Development Corporation and Covenant Health System I, Don C. Dennis, Hearing Officer of Lubbock Health Facilities Development Corporation (the "Issuer"), called the Public Hearing of the Issuer on June 28, 2002 to order. I declared that a Public Hearing, required under Section 147(f) of the Internal Revenue Code of 1986, was open for purposes of discussing the project to be financed, refinanced or acquired with the financing (the "Project") by Covenant Health System. I declared that the required notice of the Public Hearing for the Project was published in the Lubbock Avalanche -Journal, being a newspaper of general circulation in City of Lubbock, Texas. I proceeded to hold the Public Hearing. No members of the public attended the hearing to make any comments or to discuss the Project. No written comments were received. After sufficient time was given for all present to make their comments with respect to the Project, I declared the Public Hearing closed. Dated: August 20, 2002. By: Don C. Dennis Hearing Officer Resolution No. 2002-80322 Attachment D Certificate of Mayor of City of Lubbock (Approval of Applicable Elected Representative) WHEREAS, a public hearing was held on June 28, 2002 by the Lubbock Health Facilities Development Corporation ("Issuer") and no member of the public appeared at such public hearing; and WHEREAS, it is necessary for the undersigned, as the highest elected official of City of Lubbock, Texas, to approve the Master Financing Agreement, a schedule thereto and certain other documents among GE Capital Public Finance, Inc., Issuer and Covenant Health System (the "Agreement") and the financing of the Equipment thereunder to satisfy the requirements of Section 147(1) of the Internal Revenue Code of 1986, as amended (the "Code"); NOW, THEREFORE, the undersigned Mayor of the City of Lubbock, Texas, hereby approves the execution and delivery of the Agreement, a schedule thereto and certain other documents and the financing of the Equipment described therein in an amount not to exceed $10,000,000, and such approval shall be solely for the purposes of Section 147(f) of the Code and City of Lubbock, Texas shall have no liabilities for the payment of such obligations nor shall any of its assets be pledged to the payment of such obligations. In Witness Whereof; I have set my hand this 22nd day of August, 2002. Mayor City of Lubbock, Texas DOCSSC 1:306901.2 BOERNER & DENNIS ATTORNEYS AT LAW 920 Avenue Q Lubbock, Texas 79401 (806)763-0044 Joe V. Boerner, Jr. William A. Franklin August 26, 2002 Hand Delivered Rebecca Garza, City Secretary City of Lubbock 1625 13t' Street Lubbock, Texas 79401 P. O. Box 1738 Lubbock, Texas 79408 (806) 763-2084 (fax) Don C. Dennis Board Certified—Civil Trial Law Texas Board of Legal Specialization Re: Lubbock Health Facilities Development Corporation - Master Financing Agreement - Covenant Health System Dear Ms. Garza: Enclosing for filing with the City is the following: Notice of Intention to Execute Master Financing Agreement I have enclosed three originally executed copies. Please return two copies to me showing your receipt for filing. Feel free to contact me or Andy Burcham if you have any questions about this matter. Thank you for your attention to this matter. Yours very truly, BOERNER & D IS Don C. Dennis Rebecca Garza, City Secretary August 26, 2002 Page 2 DCD Encl. Copy to: Andy Burcham City of Lubbock M:\LHFDC\COV-HEL\city sec 8-26-02.wpd (8-26-02)