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HomeMy WebLinkAboutMO # 710107 MUNICIPAL ORDER NO. !7/0 A RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE CITY OF PADUCAH KENTUCKY GIVING PRELIMINARY APPROVAL TO HOSPITAL REVENUE BOND FINANCING FOR BAPTIST HEALTHCARE SYSTEM, INC.; AUTHORIZING INITIATION OF ACQUISITION AND CONSTRUCTION OF A HOSPITAL FACILITIES PROJECT; AGREEING TO UNDERTAKE THE ISSUANCE OF SUCH BONDS AT THE APPROPRIATE r TIME; AND TAKING OTHER PRELIMINARY ACTION. WHEREAS, it has been determined that the City of Paducah, Kentucky (the "Issuer") may assist Baptist Healthcare System, Inc., or any of its affiliates (collectively "BHS"), by causing the acquisition and construction of new hospital facilities, as described in Exhibit "A" attached hereto ( the "Project") , and by entering into at the appropriate time one- or more loan agreements with BHS pertaining to the Project (the "Agreement") , all pursuant to authority of Sections 103.200 through 103.285 and other applicable sections of the Kentucky Revised Statutes (the "Act") , and in furtherance of the purposes of the Act and the ensuing public benefit to the residents of the Issuer and the Commonwealth of Kentucky, the Agreement to be upon such term and conditions as the Act may require and the Issuer may deem advisable, and WHEREAS, the Issuer is authorized by the Act to issue its revenue bonds for the purpose of defraying the costs of acquiring and constructing the Project; discussions have occurred between representatives of BHS and the Issuer incident to the issuance of such revenue bonds by the Issuer, it is the intention of the Issuer, and the Issuer has agreed and hereby agrees with BHS, to issue such bonds upon compliance by BHS with such reasonable conditions and obligations as the Issuer may require and subject to the approval by the Issuer of the terms of all agreements, resolutions and other documents incident to such bond issue; and the Issuer has authorized BHS to proceed with initiation of the Project, subject to reimbursement of the initial costs of the Project from the proceeds of such bonds, as, if, and when issued; and WHEREAS, based upon BHS's estimate of the aggregate costs of the Project, the Issuer proposes to issue its hospital revenue bonds, the interest on which may be excludable from gross income for federal and Kentucky income tax purposes, in an aggregate amount up to $30, 000, 000 (the "Bonds") to pay the costs of the Project, including costs incident to the authorization, sale, and issuance of the Bonds and other financing costs, but with such other financing and contributions from BHS as may be necessary; and the Bonds will be payable solely from payments to be made by BHS under the Agreement and will not be payable from any funds or assets of the Issuer whatsoever; and WHEREAS, the Issuer proposes to enter into at the appropriate time the Agreement with BHS with respect to the Project whereby BHS will covenant and agree to pay amounts sufficient to provide for the payment of principal of and premium, if any, and interest on the Bonds together with all trustee's and paying agent's fees in connection with the Bonds and any other related charges as the same come due and payable; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF CITY OF PADUCAH, KENTUCKY, AS FOLLOWS: Section 1. It is hereby found, determined, and declared that (i) the recitals set forth in the preambles to this Resolution, which are hereby incorporated in this Section by reference, are true and correct; (ii) the total amount of money necessary to be provided by the Issuer through the issuance of the Bonds for the acquisition and construction of the Project will not exceed $30,000,000; (iii) BHS has represented it will have sufficient financial resources to acquire and construct the Project and to place it in operation and to continue to operate, maintain, and insure the Project throughout the term of the Bond issue, meeting when due the obligations of the Agreement; and (iv) sufficient safeguards will be provided by the Agreement to insure that all money provided by the Issuer from the proceeds of the sale of the Bonds will be expended, by way of direct expenditure or reimbursement, solely and only for the purposes of the Project. Section 2. It is hereby found, determined, and declared that the costs of acquiring and constructing the Project will be paid out of the proceeds of the Bonds, such proceeds to be supplemented by contributions of BHS as may be necessary to complete the Project as the Project is described in the Agreement to be executed by and between the Issuer and BHS at the appropriate time pursuant to the Act; that none of the Bonds will be general obligations of the Issuer; that neither the Bonds nor the "R interest thereon shall constitute or give rise to any pecuniary liability lam„ whatsoever of the Issuer or any charge against its general credit or taxing power; that the Bonds and the payment of interest thereon shall be secured and payable solely and only by a pledge of amounts to be paid by BHS or otherwise to be available under the Agreement and that no part of said costs will be payable out of any general funds, assets, properties, or other contributions of the Issuer. Section 3. Because the Project shall be acquired and constructed to conform to the requirements of BHS, it is hereby found, determined, and acknowledged that acquisition and construction of the Project may be undertaken or caused to be undertaken by BHS. Payments or reimbursements to or on behalf of BHS after the receipt of the proceeds of the sale of the proposed Bonds by the Issuer shall be made as set out in the Agreement. Section 4. BHS is authorized and directed to take any other legal action necessary and customary in order to satisfy any prerequisites to the issuance of the Bonds. Counsel for the Issuer and its officers are authorized and requested to assist BHS in any appropriate manner. Section 5. No funds of the Issuer shall be expended on the Project, except such as are derived from Bond proceeds. GERALDINE B. MON G RY, OR Adopted by Board of Commissioners: 61 Recorded by City 1 Clerk: C- ;h�r�c� .7- 7. 1 9 9 r 108 109 EXHIBIT "A" Western Baptist Hospital (WBH) proposes a major expansion and renovation Project costing approximately $32.1 million. Of this amount, it is anticipated that the cost of the medical office building ($3.4 million) would be excluded from the financing. The total Project is 168,750 square feet and is composed of the following: (1) A three-story, 118,750 gross square feet addition which will be added to the front of the existing facility, together with related T fixtures, equipment, and furnishings. This addition will be occupied by the services noted below. Basement - Central Sterile Processing First Floor - Outpatient Diagnostic Services Center Central Outpatient Registration Emergency/ Urgent Care One Day Surgery Outpatient Staging/Preoperative/23 hour stay Cardiology Diagnostics Radiology Diagnostics Endoscopy Second Floor - Surgery Surgery Suites Medical Staff Lounge/Changing Rooms Post Operative Recovery Third Floor - Critical Care Surgery Intensive Care Unit Intensive Care Unit Medical Care Unit Family Waiting Area The estimated cost of the three-story addition and the basement is estimated to be $16.4 million. (2) As a result of the new construction, the existing powerhouse does not have adequate space to allow for the new equipment needs for the new construction. Accordingly, a new powerhouse will be constructed at an estimated costs of $2.5 million. (3) A 40,000 square foot medical office building will also be constructed on site. The building is estimated to cost $3.4 million. (4) Equipment associated with the hospital expansion is estimated to be $5 million. (5) The cost of relocating the utilities is estimated to be $1 million. (6) Architects and contractors fees, along with project contingencies are estimated to be $3.75 million. -._ _ ._ �_..., ._, .,,., ..� M ....