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HomeMy WebLinkAboutRES 980512-L - Bond Health Facilities DevRESOLUTION NO. 1805101- L A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS, AUTHORIZING THE MAYOR TO APPROVE THE ISSUANCE OF BONDS BY GEORGETOWN HEALTH FACILITIES DEVELOPMENT CORPORATION FOR WESLEYAN HOMES, INC.; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, Georgetown Health Facilities Development Corporation (the "Issuer") was created under the auspices of the City of Georgetown, Texas (the "City"); and WHEREAS, the Issuer has presented to the City a Notice of Intention to issue bonds (the "Bonds") for the benefit of Wesleyan Homes, Inc. (the "Obligor") to finance and refinance the cost of construction, improvement and equipping of certain facilities to be owned and operated by the Obligor; and WHEREAS, a public hearing was held with respect to the issuance of the Bonds by the Issuer for the benefit of the Obligor; and WHEREAS, it is deemed necessary and advisable that this Resolution be adopted. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS, THAT: SECTION 1. The facts and recitations contained in the preamble of this resolution are hereby found and declared to be true and correct, and are incorporated by reference herein and expressly made a part hereof, as if copied verbatim. The City Council hereby finds that this resolution implements the Health & Human Services Policy of the Century Plan - Policy Plan Element, which states: "Comprehensive, affordable health and human services are available through public and private organizations"; and further finds that the adoption of this resolution is not inconsistent or in conflict with any other Century Plan Policies, as required by Section 2.03 of the Administrative Chapter of the Policy Plan. SECTION 2. The Mayor is hereby authorized to approve, on behalf of the City of Georgetown, Texas, the issuance of the aforesaid Bonds in the maximum aggregate principal amount of $7,000,000.00 for the Obligor, further approves the Project as described in the Notice of Intention relating to the Bonds, and such approval shall be solely for the purposes of Section 147(f) of the Internal Revenue Code of 1986 and the City of Gerogetown shall have no liabilities for the payment of the Bonds nor shall any of its assets be pledged to payment of the Bonds. Georgetown Health Facilities Development Corporation Bond Approval Resolution for Wesleyan Homes, Inc. Page 1 of 2 T?&S - L SECTION 3. This resolution shall be effective immediately upon adoption. RESOLVED this f-ti'day of ATTEST: Sandra D. Lee, City Secretary APPROVED AS TO FORM: Y; - Marianne Landers Banks City Attorney Georgetown Health Facilities Development Corporation Bond Approval Resolution for Wesleyan Homes, Inc. Page 2 of 2 I -Fey. WIOS j f'R - L ..; THE CITY OF GEORGETOWN: By: Le'b Wood, Mayor TAX LETTER OF REPRESENTATION MPHDRAFT 050598-1 April , 1998 Georgetown Health Facilities Development Corporation c/o City of Georgetown 609 Main Street Georgetown, Texas 78626 McCall, Parkhurst & Horton L.L.P. 717 North Harwood, 9th Floor Dallas, Texas 75201 $6,750,000 Georgetown Health Facilities Development Corporation Revenue Bonds (Wesleyan Homes, Inc. Project) Series 1998 Ladies and Gentlemen: This letter is written with respect to $6,750,000 principal amount of the Georgetown Health Facilities Development Corporation Revenue Bonds (Wesleyan Homes, Inc. Project) Series 1998 (the "Bonds") the proceeds of which are to be used to provide "health facilities" within the meaning of Chapter 221, Texas Health and Safety Code, that are located in the City of Georgetown, Texas and that are owned or to be owned by Wesleyan Homes, Inc. (the "Company"), a nonprofit corporation which is an exempt organization described in section 501(c)(3) of the Internal Revenue Code of 1986 (the "Code"). The Bonds are being issued (a) to reimburse the Company for costs of "health facilities" and to provide "health facilities," within the meaning of the Act, that are more specifically described in Exhibit "A" to the Loan Agreement between the Issuer and the Company, dated April 1, 1998, (b) to establish a debt service reserve fund for the Bonds and (c) to provide funds to pay the costs of issuance of the Bonds. The "health facilities" to be financed and refinanced described above are collectively referred to as the "Facilities." You have asked the undersigned to provide information and representations relating to the financing of the Facilities. We understand that you are relying, among other things, on the information and representations contained herein in determining (a) that the proceeds of the Bonds are to be used to provide qualified facilities within the meaning of section 145 of the Code and the regulations proposed or promulgated thereunder as of the date of this letter, (b) the average reasonably expected economic life of the Facilities within the meaning of section 147(b) of the Code, (c) the material necessary for the Issuer to submit the statement required by section 149(e) of the 1986 Code relating to information reporting requirements and (d) whether any obligations other than the Bonds are deemed to be part of the same "issue" as the Bonds. After due investigation and study, and to the best of their knowledge and belief, the undersigned on behalf of the Company hereby certifies that the following representations are true and correct. 1. The undersigned is the duly chosen, qualified and acting officer of the Company for the office shown below such signature. I am familiar with the facts herein are certified or have consulted with those representatives of the Company and its related parties as I deem necessary for purposes of these representations. I am duly authorized to execute and deliver this certificate on behalf of the Company. 2. To the best of the knowledge, information and belief of the undersigned, all written information famished and statements made by the undersigned to McCall, Parkhurst & Horton L.L.P., in writing in connection, with their review of the status of the Company under section 501(c)(3) of the Code, the use of the proceeds of the Bonds, and the purchase and operation of the Facilities are true, correct and complete. Furthermore, the representations, covenants and statements made by the Company in the Bond documents regarding the tax-exempt status of the Company, the Facilities and the Bonds are true, accurate and correct as of the date hereof. 3. The Facilities are to be used exclusively in furtherance of the exempt purposes for which the Company was organized and which have been described by the Company to the Internal Revenue Service in the Application for Recognition of Exemption (or in a subsequent written submission) in support of the determination by the Internal Revenue Service as .to the exempt status of the Company under section 501(c)(3) of the Code. 4. All of the proceeds, received from the sale of the Bonds, will be used for the payment of costs in the amount of, and in the manner set forth in, the schedule(s) prepared by First Southwest Company, a copy of which are attached hereto as Exhibit "A." Such schedules were prepared on the basis of information furnished by the Company. 5. The Company (a) has incurred or will incur, within a six-month period beginning on the date hereof, a substantial binding obligation to third parties to commence substantial the acquisition, construction, reconstruction and renovation of the Facilities financed with the proceeds of the Bonds pursuant to which it is obligated to expend at least five percent of the net sale proceeds of the Bonds, (b) will proceed with due diligence to complete the Facilities financed with the proceeds of the Bonds, and (c) will complete such Facilities and expend all of the proceeds of the Bonds prior to April 1, 2001. 6. The costs, if any, to be reimbursed were paid not more than the later of (a) three years prior to the date hereof, or (b) 18 months after the later of the date such cost was paid or the date the Facilities were placed in service. No such cost was paid more than 60 days prior to the date hereof. 7. The description and location of the Facilities are accurately set forth in those certain Notices of Public Hearing, otherwise included in the Transcript of Proceedings, that were published on December 31, 1998. 8. The costs to be paid or reimbursed from the proceeds of the Bonds are capitalizable into the tax bases of Facilities. Such costs represent the cost of capital assets, start-up expenditures within 9 the meaning of section 195 of the Code or interest and carrying costs described in section 266 of the Code. 9. The Facilities financed with the proceeds from the sale of the Bonds co s thei slue a are al rental property for family units, the first use of which is by the Company and pursuant facilities which meet the following criteria: (a) The Facilities will consist of a full-service skilled nursing home which provides room and board and skilled nursing care on a twenty-four hour basis; (b) The Facilities will be regulated under the law governing nursing home facilities in the State where they are located, including all building code restrictions for nursing homes, and additionally, where the State specifically regulates continuing care facilities the Facilities will be regulated pursuant to that law; (c) All residents of the Facilities will be under the care of a physician and a number of physicians refer patients to the Facilities and make routine visits; (d) The Facilities will be eligible providers of services certified under both the federal Medicare and Medicaid programs and are qualified for Medicare and Medicaid reimbursement pursuant to the transfer of such licenses; (e) In connection with the care to be provided as a part of the patient daily fee paid by residents, additional services will be provided including special diet preparation, medication administration, various medical treatments and medical supervision; and (f) All residents at the Facilities will be subject to uniform and mandatory charges (whether or not separately stated) for significant non -housing services, including health care and meals, provided by the Facilities' management. 10. No portion of the Facilities consists of an airplane, skybox or other private luxury box, any facility primarily used for gambling or any store the principal business of which is the sale of alcoholic beverages for consumption off premises. 11. The Facilities will be strictly "pay-as-you-go" facilities and no endowments are solicited or accepted. The Company has not received any gift, bequest or contribution that was solicited for the purpose of defraying any portion of the costs of the Facilities or which is specifically earmarked or dedicated to such purpose. In addition, no gift, bequest or contribution has been received by the Company for the purpose of, or specifically earmarked for the payment of debt service on the Bonds. If the Company conducts a special fund-raising program with respect to the Facilities, and of a gift, bequest or contribution is received which is specifically earmarked or dedicated for the Facilities, then the Company will either (1) deposit such gift, bequest or contribution to the Debt Service Fund for the purpose of paying debt service on the Bonds within a year of the date of receipt of such gift, bequest or contribution or (2) invest such gift, bequest or contribution in state or local governmental obligations (other than private activity bonds) the interest on which is excludable from gross income for federal income tax purposes pursuant to section 103(a) of the Code or (3) use such gift, bequest or contribution for costs of the Facilities in excess of the costs of the Facilities financed with the proceeds of the Bonds. If the gift, bequest or contribution is used to acquire state or local obligations, then the proceeds of any 3 sale or payment of such state or local obligations will be used immediately upon receipt to pay debt service on the Bonds or to acquire additional state or local obligations. 12. In the Agreement, the Company has covenanted that so long as any of the Bonds remain outstanding, it will not use, or permit to be used, the proceeds of the Bonds, or any investment earnings thereon, in any manner that would cause the Bonds to be treated as private activity bonds, other than a "qualified 501(c)(3) bond," within the meaning of section 145 of the Code. The Company is aware that compliance with this covenant will require specifically, but not by way of limitation, that so long as any Bonds remain outstanding, the Company will not lease, sublease, rent or otherwise permit, any part of the Facilities to be used by persons, other than political subdivisions and agencies of a state, instrumentalities thereof and organizations described in section 501(c)(3) of the Code which are exempt from federal income taxes under section 501(a) of the Code (hereafter "exempt persons") if such lease, sublease, rental or use would result in more than three percent of the proceeds of the Bonds deemed to be used, directly or indirectly, in the non -qualifying use in the trade or business of a person who is not an exempt person in excess of three percent of the proceeds of the Bonds. For purposes of this representation, the Company understands that an organization described in section 501(c)(3) of the Code is not considered an exempt person with respect to any unrelated trade or business, within the meaning of section 513(a) of the Code, which it conducts, and that any use of proceeds of the Bonds or any investment earnings thereon in any manner contrary to the guidelines set forth in Revenue Procedure 97-13, including any revisions or amendments thereto, shall constitute the use of such proceeds in the trade or business of a person, other than an exempt person. 13. The management company, if any, or other service providers, if any, have been or will be chosen based on the reasonableness of its compensation, and its experience in the health care field. The service provider has no role or relationship (including, but not limited to, not more than 20 percent of the voting power of the governing body) with the Company or any related entity which would impair or otherwise limit the ability of the Company to exercise its rights, including cancellation rights, under the service contract. 14. The useful lives of the property constituting the Facilities are at least equal to the lives set forth in Exhibit "B." The weighted average maturity of the Bonds does not exceed 20 years. 15. The total of any non -qualifying costs and issuance costs (including the underwriter's discount) are no greater than five percent of the net proceeds of the bonds. The total of the issuance costs and the underwriter's discount financed with the proceeds of the Bonds is no greater than two percent of the proceeds of the Bonds. 16. Other than with respect to obligations on which McCall, Parkhurst & Horton L.L.P. has acted as Bond Counsel, no obligations have been sold within 15 days prior to the date of sale which constitute or will constitute obligations issued by or on behalf of a municipal issuer (i.e., a state or a political subdivision thereof), the proceeds of which were or will be used to provide facilities the principal user or users of which are or will be the Company or any related person within the meaning of section 147(a) of the Code, and which will be payable from the same source or sources as the Bonds. Except for the Bonds, no such obligations will be sold on or within 15 days following the date hereof. 17. Attached hereto as Exhibit "C" is a copy of Information Return for Tax -Exempt Private Activity Bond Issues (IRS Form 8038), Parts H through VIII of which have been completed with respect to the Bonds by the Company; the information contained in those Parts is complete and correct. 4 That in consideration of the Issuer's issuance of the Bonds, and the rendering of the opinion of McCall, Parkhurst & Horton L.L.P. and the Company agree to protect, indemnify and hold the Issuer and such firm ham*ss from any and all damages, losses and expenses, including reasonable attorneys' fees, arising at any time from or with respect to the representations and statements made and described in paragraphs 1 through 17, inclusive, above. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.] CERTIFICATE FOR RESOLUTION THE STATE OF TEXAS COUNTY OF WILLIAMSON CITY OF GEORGETOWN We, the undersigned officers of said City, hereby certify as follows: 1. The City Council of said City convened in REGULAR MEETING ON THE 12TH DAY OF MAY, 1998, at the City Hall, and the roll was called of the duly constituted officers and members of said City Council, to -wit: Leo Wood, Mayor Sandra Lee, City Secretary Shelley Davis Susan Hoyt Lee Bain Charlie Barton Charles Burson Ferd Tonn and all of said persons were present, except the following absentees: thus constituting a quorum. Whereupon, among other business, the following was trans cted at said Meeting: a written RESOLUTION GRANTING APPROVAL TO THE ISSUANCE OF BONDS BY GEORGETOWN HEALTH FACILITIES DEVELOPMENT CORPORATION FOR WESLEYAN HOMES, INC. was duly introduced for the consideration of said City Council and read in full. It was then duly moved and seconded that said Resolution be adopted; and, after due discussion, said motion carrying with it the adoption of said Resolution, prevailed and carried by the following vote: AYES: All members of said City Council shown present above voted "Aye". NOES: 40 ABSTENTIONS: D 2. That a true, full and correct copy of the aforesaid Resolution adopted at the Meeting described in the above and foregoing paragraph is attached to and follows this Certificate; that said Resolution has been duly recorded in said City Council's minutes of said Meeting; that the above and foregoing paragraph is a true, full and correct excerpt from said City Council's minutes of said Meeting pertaining to the adoption of said Resolution; that the persons named in the above and fore- going paragraph are the duly chosen, qualified and acting officers and members of said City Council as indicated therein; that each of the officers and members of said City Council was duly and sufficiently notified officially and personally, in advance, of the time, place and purpose of the aforesaid Meeting, and that said Resolution would be introduced and considered for adoption at said Meeting, and each of said officers and members consented, in advance, to the holding of said Meeting for such purpose, and that said Meeting was open to the public and public notice of the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code. 3. That the Mayor of said City has approved and hereby approves the aforesaid Resolution; that the Mayor and the City Secretary of said City have duly signed said Resolution; and that the Mayor and the City Secretary of said City hereby declare that their signing of this Certificate shall constitute the signing of the attached and following copy of said Resolution for all purposes. SIGNED AND SEALED the 12th day of May, 1998. z' City Secretary Mayo SEAL RESOLUTION GRANTING APPROVAL TO THE ISSUANCE OF BONDS BY GEORGETOWN HEALTH FACILITIES DEVELOPMENT CORPORATION FOR WESLEYAN HOMES, INC. THE STATE OF TEXAS CITY OF GEORGETOWN WHEREAS, Georgetown Health Facilities Development Corporation (the "Issuer") was created under the auspices of the City of Georgetown, Texas (the "City"); and WHEREAS, the Issuer has presented to the City a Notice of Intention to issue bonds (the "Bonds") for the benefit of Wesleyan Homes, Inc. (the "Obligor") to finance and refinance the cost of construction, improvement and equipping of certain facilities to be owned and operated by the Obligor; and WHEREAS, a public hearing was held with respect to the issuance of the Bonds by the Issuer for the benefit of the Obligor; and WHEREAS, it is deemed necessary and advisable that this Resolution be adopted. THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF GEORGETOWN, TEXAS THAT the City of Georgetown hereby approves the issuance of the aforesaid Bonds in the maximum aggregate principal amount of $7,000,000 for the Obligor, further approves the Project as described in the Notice of Intention relating to the Bonds, and such approval shall be solely for the purposes of Section 147(f) of the Internal Revenue Code of 1986 and the City of Georgetown shall have no liabilities for the payment of the Bonds nor shall any of its assets be pledged to payment of the Bonds. NOTICE OF INTENTION March 27, 1998 City Council City of Georgetown 609 Main Georgetown, Texas 78626 Re: Georgetown Health Facilities Development Corporation Revenue Bonds (Wesleyan Homes, Inc. Project) Series 1998 Dear Members of the City Council: Pursuant to Section 221.062 of the Health Facilities Development Act, Chapter 221, Texas Health and Safety Code, as amended (the "Act"), the Act under which the City of Georgetown, Texas created Georgetown Health Facilities Development Corporation (the "Issuer"), notice is hereby given that the Issuer intends to issue its above -captioned bonds (the "Series 1998 Bonds") for the purpose of providing financing and refinancing for part of the cost of health facilities (as such term is defined in the Act) (the "Project") for Wesleyan Homes, Inc., a non-profit corporation organized and existing under the laws of the State of Texas. The maximum anticipated size of the proposed bond issue is approximately $7,000,000 plus any necessary original issue discount. The Project is generally described in Schedule A attached hereto. The necessity for such Project is to assist the maintenance of public health and to provide health facilities for the promotion and development of health care, all for the public purpose of promoting the health and welfare of the citizens of the State of Texas and the Project is needed for the purpose of improving the adequacy, cost and accessibility of health care, research and education within this State. The proposed Series 1998 Bonds shall be issued not earlier than the fifteenth (15th) day following the date of filing of this letter. Sincerely, Georgetown Health Facilities Development Corporation By_ Title: Filed, this day of , 1998. City Secretary, City of Georgetown, Texas Fa President SCHEDULE A THE PROJECT The Project will consist of the financing and refinancing of (a) a 40 -bed Alzheimer's unit adjacent to the 184 -bed skilled care nursing home (the "Nursing Center") of Wesleyan Homes, Inc. ("Wesleyan") located at 2001 Scenic Drive in Georgetown, Texas, (b) capital improvements at the Nursing Center, (c) capital improvements at Wesleyan's 87 -unit independent living retirement facility (the "Retirement Home") located at 1105 Church Street in Georgetown, Texas and (d) acquisition of approximately 20 acres of land on Williams Drive in Georgetown, Texas (the "New Campus Site") for future use as a site for new senior living facilities. It is estimated that the proceeds of the Series 1998 Bonds will be spent as follows: Alzheimer's unit $3,500,000 Improvements to Nursing Center 1,910,000 Improvements to Retirement Home 350,000 Acquisition of New Campus Site 400,000 Debt Service Reserve Fund 700,000 Cost of Issuance 140,000 $7,000,000