AGENDA MEMORANDUM

 

 

Meeting Date:      September 26,  2011

 

From:                          Fred A. Morrison, City Attorney

 

Subject:                      Resolution authorizing Leesburg Regional Medical Center/Villages Regional Hospital 2011 Refunding Bond Issue

 

 

Staff Recommendations:

Staff recommends Aadopting the Resolution authorizing the City to act as conduit for the issuance of bonds on behalf of LRMC and TVRH (the “Obligated Group”) to refund their existing indebtedness.

 

Analysis:

 

In the past the City has acted as conduit for the Obligated Group to issue various bonds which are repaid solely from revenues provided by the Obligated Group and are not obligations of the City.  Due to the impending expiration of the Regions Bank letter of credit and in order to restructure certain of its outstanding debt on terms the Obligated Group finds to be more favorable, the Obligated Group wishes to issue new bonds for the purpose of refunding certain of its existing indebtedness.  The City is authorized to issue bonds for TVRH pursuant to an Interlocal Agreement previously entered into between the City and the Sumter County Industrial Development Authority.

 

The resolution presented for consideration authorizes the issuance of the 2011 Refunding Bonds in an aggregate principal amount not to exceed $66,000,000 to finance the current refunding of the outstanding Series 2008A, Series 2008C and Series 2009B (taxable) Bonds and authorizes the sale of the 2011 Refunding Bonds in a negotiated private placement to JPMorgan Chase Bank, N.A.  The resolution also approves and authorizes various documents with respect to the issuance of the 2011 Refunding Bonds, including a Trust Indenture with The Bank of New York Mellon Trust Company, N.A. and a Financing Agreement with LRMC and TVRH.

 

The 2011 Refunding Bonds will be repaid only from revenues provided by the Obligated Group, and will not in any manner be an obligation of the City.

 

Fiscal Impact:

 

There will be no fiscal impact to the City.  The 2011 Refunding Bonds will be paid solely from the pledged revenues which will consist of proceeds paid by the Obligated Group.  The costs of issuance will also be paid by the Obligated Group.

 

 

Submission Date and Time:    9/22/11 10:02 PM____

 

Department: __Legal__

Prepared by: Fred A. Morrison _ Attachments:  Yes_X__ No__

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Newspapers:

                                       

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. _____JB_____________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by: City Manager ___

 

Account No. _________________

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________

 


RESOLUTION NO. _____

A RESOLUTION OF THE CITY OF LEESBURG, FLORIDA (THE "CITY"), AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $66,000,000 aggregate principal amount of CITY OF LEESBURG, FLORIDA, HOSPITAL REVENUE REFUNDING BONDS (CENTRAL FLORIDA HEALTH ALLIANCE PROJECTS), SERIES 2011 FOR THE PURPOSE OF FINANCING THE CURRENT REFUNDING OF THE OUTSTANDING CITY OF LEESBURG, FLORIDA HOSPITAL REVENUE REFUNDING BONDS (LEESBURG REGIONAL MEDICAL CENTER PROJECT), SERIES 2008A, cITY OF LEESBURG, FLORIDA HOSPITAL REVENUE REFUNDING BONDS (THE VILLAGES REGIONAL HOSPITAL PROJECT), SERIES 2008C AND CITY OF LEESBURG, FLORIDA TAXABLE HOSPITAL REVENUE REFUNDING BONDS (THE VILLAGES REGIONAL HOSPITAL PROJECT), SERIES 2009B; PROVIDING THAT SUCH BONDS SHALL NOT CONSTITUTE A GENERAL OBLIGATION OF THE CITY OR THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION THEREOF BUT SHALL BE PAYABLE SOLELY FROM REVENUES HEREIN PROVIDED; authorizing and approving the execution and delivery of a FINANCING AGREEMENT BETWEEN THE CITY AND LEESBURG REGIONAL MEDICAL CENTER, INC. AND The Villages Tri-County Medical Center, Inc. (TOGETHER, THE "OBLIGATED GROUP") and a TRUST INDENTURE BETWEEN THE CITY AND THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.; AUTHORIZING THE MAYOR OR MAYOR PRO TEM TO AWARD THE SALE OF SAID 2011 BONDS TO JPMORGAN CHASE BANK, N.A. IN A NEGOTIATED PRIVATE PLACEMENT; PROVIDING CERTAIN FINDINGS WITH RESPECT TO THE FOREGOING; PROVIDING AN EFFECTIVE DATE FOR THIS RESOLUTION; AND PROVIDING CERTAIN OTHER DETAILS WITH RESPECT THERETO.

BE IT RESOLVED by the City Commission of the City of Leesburg, Florida, that:

 

SECTION 1.  AUTHORITY.

  This Resolution is adopted pursuant to the Constitution of the State of Florida, Chapter 166, Florida Statutes, Part I of Chapter 163, Florida Statutes, Part II of Chapter 159, Florida Statutes, and other applicable provisions of law (collectively, the "Act").

SECTION 2.  DEFINITIONS.

  All terms used herein in capitalized form, unless otherwise defined herein, shall have the same meaning as ascribed to them in the Master Trust Indenture, dated as of December 1, 2008, as amended and supplemented from time to time, including as particularly supplemented by the Sixth Supplemental Indenture (as defined herein) (the "Master Indenture") between Leesburg Regional Medical Center, Inc. and The Villages Tri-County Medical Center, Inc., as the current Members of the Obligated Group (together, the "Obligated Group") and The Bank of New York Mellon Trust Company, N.A., as Master Trustee (in such capacity, the "Master Trustee"), the Bond Indenture (as defined herein) or the Financing Agreement (as defined herein).

SECTION 3   FINDINGS.

  The City of Leesburg, Florida (the "City"), acting through its City Commission, has found and determined and does hereby declare that:

A.        The City has previously issued its $22,655,000 City of Leesburg, Florida, Hospital Revenue Refunding Bonds (Leesburg Regional Medical Center Project), Series 2008A (the "2008A Bonds"), currently outstanding in the principal amount of $20,840,000, pursuant to an Indenture of Trust dated as of June 1, 1988, as supplemented and amended, including as specifically supplemented and amended by the Tenth Supplemental Indenture of Trust dated as of August 1, 2008 and loaned the proceeds thereof to the Obligated Group under the Financing Agreement dated as of June 1, 1988, as supplemented and amended, including, as particularly supplemented and amended by the Tenth Supplemental Financing Agreement dated as of August 1, 2008 (the "2008A Financing Agreement").

 

B.         The City has previously issued its $35,000,000 City of Leesburg, Florida, Hospital Revenue Refunding Bonds (The Villages Regional Hospital Project), Series 2008C (the "2008C Bonds"), the entire principal of which is currently outstanding, pursuant to an Indenture of Trust dated as of June 1, 1988, as supplemented and amended, including as specifically supplemented and amended by the Eleventh Supplemental Indenture of Trust dated as of December 1, 2008 and loaned the proceeds thereof to the Obligated Group under the Financing Agreement dated as of June 1, 1988, as supplemented and amended, including, as particularly supplemented and amended by the Eleventh Supplemental Financing Agreement dated as of December 1, 2008 (the "2008C Financing Agreement").

 

C.        The City has previously issued its $7,500,000 City of Leesburg, Florida, Taxable Hospital Revenue Refunding Bonds (The Villages Regional Hospital Project), Series 2009B (the "2009B Bonds" and, together with the 2008A Bonds and the 2008C Bonds, the "Refunded Bonds"), the entire principal of which is currently outstanding, pursuant to a Trust Indenture dated as of December 1, 2009 and loaned the proceeds thereof to the Obligated Group under the Financing Agreement dated as of December 1, 2009 (the "2009B Financing Agreement" and, together with the 2008A Financing Agreement and the 2008C Financing Agreement, the "Prior Financing Agreement").

 

D.        The Obligated Group is obligated to make debt service payments under the Prior Financing Agreement and the Master Indenture sufficient to pay debt service on the Refunded Bonds.

 

E.         The Obligated Group desires to cause the Refunded Bonds to be refunded and has requested the City to issue its not to exceed $66,000,000 City of Leesburg, Florida Hospital Revenue Refunding Bonds (Central Florida Health Alliance Projects), Series 2011 (the "2011 Refunding Bonds") to finance such refunding. 

 

F.         The City will issue the 2011 Refunding Bonds pursuant to a Trust Indenture dated as of October 1, 2011 (the "Bond Indenture") by and between the City and The Bank of New York Mellon Trust Company, N.A., as Trustee (in such capacity, the "Bond Trustee") and will loan the proceeds of the 2011 Refunding Bonds to the Obligated Group to currently refund the Refunded Bonds pursuant to a Financing Agreement dated October 1, 2011 (the "Financing Agreement") by and between the City and the Obligated Group. 

 

G.        The City is authorized under the Act and an Interlocal Agreement by and between the City and the Sumter County Industrial Development Authority (the "Authority") dated as of January 1, 2006, as supplemented by a First Supplemental Interlocal Agreement by and between the City and the Authority dated as of December 1, 2008 to issue the 2011 Refunding Bonds to finance the current refunding of the Refunded Bonds.

 

H.        Adequate provision has been made in the Master Indenture, the Financing Agreement and the Bond Indenture for the refunding and redemption of the Refunded Bonds, and for the payment by the Obligated Group of amounts sufficient to pay the principal of and interest and, if any, premium on the 2011 Refunding Bonds and all costs and expenses relating thereto in the amounts and at the times required.

 

I.          The 2011 Refunding Bonds will be privately placed with JPMorgan Chase Bank, N.A. ("JPMorgan") and will initially bear interest at a Bank Loan Interest Rate as provided in the Bond Indenture.

 

J.          The Obligated Group's obligation to make debt service payments sufficient to pay debt service on the 2011 Refunding Bonds will be evidenced and secured by the Financing Agreement and by an Obligation issued by the Obligated Group under the Master Indenture, which Obligation will constitute Additional Indebtedness under the Master Indenture.

 

K.        The Obligated Group is financially responsible based on the criteria established by the Act, and is fully capable and willing to fulfill its obligations under the Financing Agreement and Master Indenture and Obligation issued pursuant to the Master Indenture, including the obligation to make payments in installments, in the amounts and at the times required, sufficient to timely discharge the debt service on the 2011 Refunding Bonds and such other obligations and responsibilities as are imposed under the Financing Agreement and the Master Indenture, and Obligation issued pursuant to the Master Indenture.  The payments to be made by the Obligated Group to the City and the other security provided by the Financing Agreement and the Master Indenture are adequate within the meaning of the Act for the security of the 2011 Refunding Bonds.

 

L.         The City is not obligated to pay the 2011 Refunding Bonds except from the proceeds derived from the installment payments made by the Obligated Group pursuant to the Financing Agreement and payments received on Obligations issued by the Obligated Group under the Master Indenture, or from other amounts or collateral pledged therefor and neither the faith and credit nor the taxing power of the City or of the State of Florida or any political subdivision thereof is pledged to the payment of the principal of, the premium, if any, or the interest on the 2011 Refunding Bonds.

 

M.        The Obligated Group will not discriminate among its patients due to race, religion or national origin.

 

N.        The negotiated sale of the 2011 Refunding Bonds is necessary and is in the best interest of the City for the following reasons: the 2011 Refunding Bonds will be special and limited obligations of the City, the debt service of which and other costs and expenses related to the 2011 Refunding Bonds shall be payable out of moneys derived by the City from payments to be received under the Financing Agreement and payments received on an Obligation issued by the Obligated Group under the Master Indenture; the Obligated Group will be required to pay all costs of the City in connection with the refunding of the Refunded Bonds which are not paid out of the proceeds of the 2011 Refunding Bonds or otherwise and to operate and maintain its hospital facilities at its own expense; the cost of issuance of the 2011 Refunding Bonds, which must be borne directly or indirectly by the Obligated Group, is likely to be greater and the time until issuance longer if the 2011 Refunding Bonds are sold at public sale by competitive bids than if the 2011 Refunding Bonds are sold at negotiated sale, and there is no basis, considering prevailing market conditions, for any expectation that the terms and conditions of a sale of the 2011 Refunding Bonds at public sale by competitive bids would be more favorable than at negotiated sale; hospital revenue bonds having the characteristics of the 2011 Refunding Bonds are typically sold at negotiated sale under prevailing market conditions; and the Obligated Group has undertaken substantial negotiations with JPMorgan regarding the 2011 Refunding Bonds.

 

O.        It is in the best interest of the City to authorize the acceptance of the expected offer of JPMorgan to purchase the 2011 Refunding Bonds in a negotiated private placement.  Prior to the sale of the 2011 Refunding Bonds, JPMorgan will provide the City with disclosure statements containing the information required by Section 218.385(6), Florida Statutes and the truth-in-bonding statement required pursuant to Section 218.385, Florida Statutes.

 

P.         Neither the Bond Trustee nor the holder of the 2011 Refunding Bonds shall have the right directly or indirectly to require the City to levy ad valorem taxes to pay the 2011 Refunding Bonds or to fund the operations of the hospital facilities of the Obligated Group.

 

Q.        The Obligated Group has represented to the City that no certificate of need from the Agency of Health Care Administration of the State of Florida is required in accordance with Sections 408.031-.045, Florida Statutes and Chapter 59C-1 of the Florida Administrative Code in connection with the issuance of the 2011 Refunding Bonds and the refunding of the Refunded Bonds.

 

SECTION 4.  AUTHORIZATION AND APPROVAL OF REFUNDING, PRIVATE PLACEMENT AND ISSUANCE OF 2011 REFUNDING BONDS.

  The refunding and redemption of the Refunded Bonds contemplated herein and in the Bond Indenture and the Financing Agreement is hereby authorized and approved.  The giving of conditional notice of redemption of the Refunded Bonds is hereby ratified and confirmed.  Subject and pursuant to the provisions hereof and of the Bond Indenture, Master Indenture and the Financing Agreement, for the purpose of financing the current refunding of the Refunded Bonds, the issuance of the 2011 Refunding Bonds under the authority of the Act in, in one or more series, in an aggregate principal amount not to exceed $66,000,000 is hereby authorized.  The negotiated private placement of the 2011 Refunding Bonds with JPMorgan is hereby authorized.

The Series 2011 Bonds shall be designated "City of Leesburg, Florida Hospital Revenue Refunding Bonds (Central Florida Health Alliance Projects), Series 2011."  The Mayor or Mayor Pro Tem is hereby authorized to change such designations as appropriate in the event the 2011 Refunding Bonds are not initially issued in calendar year 2011, or if the 2011 Refunding Bonds are sold in more than one series.  The 2011 Refunding Bonds shall be subject to payment as provided in the Bond Indenture.  Notwithstanding anything contained herein to the contrary, the 2011 Refunding Bonds shall not be issued until the conditions precedent to the issuance thereof under the Bond Indenture have been complied with and upon issuance, the 2011 Refunding Bonds shall constitute Related Bonds under the Master Indenture entitled to the security and benefits thereof.

 

The 2011 Refunding Bonds shall be dated the date of original issuance thereof, shall initially bear interest from the dated date thereof at a Bank Loan Interest Rate determined in the manner provided in and payable at the times and in the manner provided in the Bond Indenture.  The 2011 Refunding Bonds shall mature and be subject to optional and mandatory redemption, shall be issued in registered form without coupons, shall be in the denomination or denominations, shall be payable at the place or places and in the manner, shall be executed, authenticated and delivered, shall otherwise be in such form, and subject to such terms and conditions, all as provided in the Bond Indenture.

 

The 2011 Refunding Bonds and the premium, if any, and interest thereon shall not be deemed to constitute a general debt, liability or obligation of the City or a debt, liability or obligation of the State of Florida or any political subdivision thereof, or a pledge of the faith and credit or taxing power of the City, the State of Florida or any political subdivision thereof, but shall be payable solely from the revenues and other collateral provided and pledged therefor in the manner and to the extent provided in the Bond Indenture.  The City shall not be obligated to pay the 2011 Refunding Bonds or any premium or interest thereon except from the revenues, collateral and proceeds pledged therefor as provided in the Bond Indenture.  Neither the City, nor the State of Florida, nor any political subdivision thereof shall be directly, indirectly or contingently obligated to levy or pledge any form of taxation whatsoever for the payment of the 2011 Refunding Bonds or to make any appropriation for the payment thereof.

 

SECTION 5.  AUTHORIZATION AND APPROVAL OF FINANCING AGREEMENT.

  The execution and delivery of the Financing Agreement between the City and the Obligated Group is hereby authorized and approved.  The form of the Financing Agreement attached hereto as Exhibit "B" is hereby approved, subject to such changes, insertions and omissions and such filling of blanks as may be made in such form of Financing Agreement and approved by the Obligated Group and either of the officers of the City executing the same, such execution and delivery to be conclusive evidence of such approval.  The Mayor or Mayor Pro Tem of the City and the City Clerk or Assistant City Clerk of the City or their duly authorized alternate officers are hereby authorized and empowered to execute and deliver the Financing Agreement in substantially the form attached hereto, subject to such changes, insertions and omissions and filling of blanks therein as authorized hereby.

SECTION 6.  APPROVAL AND AUTHORIZATION OF BOND INDENTURE; Appointment of Bond Trustee.

  In order to provide for the issuance of the 2011 Refunding Bonds and the terms thereof, the execution and delivery of the Bond Indenture between the City and the Bond Trustee is hereby authorized.  The form of the Bond Indenture attached hereto as Exhibit "A" is hereby approved, subject to such changes, insertions and omissions and such filling of blanks therein as may be made in such form of Bond Indenture and approved by the Bond Trustee and either of the officers of the City executing the same, such execution and delivery to be conclusive evidence of such approval.  The Mayor or Mayor Pro Tem of the City and the City Clerk or Assistant City Clerk of the City or their duly authorized alternate officers are hereby authorized and empowered to execute and deliver the Bond Indenture in substantially the form attached hereto, subject to such changes, insertions and omissions and filling of blanks therein as authorized hereby.

SECTION 7.  ASSIGNMENT OF FINANCING AGREEMENT.

  The City's interest in the Financing Agreement, other than certain reserved rights, shall be assigned by the City to the Bond Trustee under the terms of the Bond Indenture, Financing Agreement and Master Indenture.

The Bank of New York Mellon Trust Company, N.A. is hereby appointed as the initial Bond Trustee under the Bond Indenture.

 

SECTION 8.  APPLICATION OF PROCEEDS.

  The proceeds from the sale of the 2011 Refunding Bonds shall be disposed of in the manner provided in the Bond Indenture and as provided by a certificate of the City delivered at or prior to the delivery of the 2011 Refunding Bonds.

SECTION 9.  AUTHORIZATIONS.

 

A.        The Mayor or the Mayor Pro Tem and the City Clerk or any Assistant City Clerk of the City are hereby authorized and directed to execute the 2011 Refunding Bonds as provided herein and in the Bond Indenture, and the Mayor or the Mayor Pro Tem of the City or the City Clerk or any Assistant City Clerk of the City is hereby authorized and directed upon the execution of the 2011 Refunding Bonds to deliver such Bonds in the amounts authorized to be issued hereunder or such lesser amount as requested by the Obligated Group, to the Bond Trustee for authentication and delivery to or upon the order of JPMorgan, upon payment of the purchase price therefore and upon delivery by JPMorgan of a purchaser's certificate as provided in the Bond Indenture.

 

B.         The Mayor or the Mayor Pro Tem and the City Clerk or any Assistant City Clerk of the City and the City's Attorney, and such other officers and employees of the City as may be designated by the Mayor or the Mayor Pro Tem, are each designated as agents of the City in connection with the issuance and delivery of the 2011 Refunding Bonds and the redemption of the Refunded Bonds, and are authorized and empowered, collectively or individually, to take all action and steps and to execute all instruments, documents and contracts whether or not expressly contemplated hereby, and to execute and do all acts and things required by the provisions of this Resolution and by the provisions of the 2011 Refunding Bonds, the Bond Indenture and the Financing Agreement, as may be necessary for the full, punctual and complete performance of all the terms, covenants, provisions and agreements herein and therein contained, or as otherwise may be necessary or desirable to effectuate the purpose and intent of this Resolution.  The Mayor or Mayor Pro Tem and the City Clerk or any Assistant City Clerk of the City are hereby designated as the primary officers of the City charged with the responsibility of issuing the 2011 Refunding Bonds.

 

SECTION 10.            REPEAL OF INCONSISTENT PROVISIONS.

  All resolutions or parts thereof in conflict herewith are to the extent of such conflict superseded and repealed.

SECTION 11.            INVALIDITY.

  In case any one or more of the provisions of this Resolution, the Bond Indenture, the Financing Agreement or the 2011 Refunding Bonds shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provisions of this Resolution, the Bond Indenture, the Financing Agreement and the 2011 Refunding Bonds and each such document shall be construed and enforced as if such illegal or invalid provision had not been contained herein or therein.  The 2011 Refunding Bonds are issued and this Resolution is adopted and the Bond Indenture and Financing Agreement shall be executed with the intent that the laws of the State of Florida shall govern their construction.

SECTION 12.            HEADINGS NOT PART OF RESOLUTION.

  Any heading preceding the text of the several sections of this Resolution shall be solely for convenience of reference and shall not constitute a part of this Resolution, nor shall such headings affect the meaning, construction or effect of this Resolution.

SECTION 13.            EFFECTIVE DATE.

  This Resolution shall become effective immediately upon its passage.

PASSED AND ADOPTED in public session of the City Commission of the City of Leesburg, Florida, this 26th day of September, 2011.

 

CITY OF LEESBURG, FLORIDA

(SEAL)

 

By:                                                                  

Mayor

ATTEST:

By:                                                                  

City Clerk

 

APPROVED AS TO FORM

AND CORRECTNESS:

By:                                                                  

City Attorney


EXHIBIT LIST

Exhibit "A"     ---        Form of Bond Indenture

 

Exhibit "B"      ---        Form of Financing Agreement