Title
RESOLUTION AUTHORIZING THE CONVEYANCE OF CERTAIN CATHOLIC CARE CENTER FACILITIES FINANCED WITH THE PROCEEDS OF INDUSTRIAL REVENUE BONDS OF THE COUNTY BACK TO THE TENANT; AND AUTHORIZING THE EXECUTION AND DELIVERY OF (1) A SPECIAL WARRANTY DEED, (2) A BILL OF SALE, (3) A TERMINATION AND RELEASE OF LEASE, AND (4) A SATISFACTION, DISCHARGE AND RELEASE OF INDENTURE.
Presented by: Chris Chronis, Chief Financial Officer.
RECOMMENDED ACTION: Adopt the resolution.
Body
Since 1989, the County has been the issuer of health care facilities revenue bonds for the benefit of Catholic Care Center, Inc., which bonds have been used to acquire, construct, and remodel the nursing home and assisted living facility known as the "Catholic Care Center" located at 6700 East 45th Street North, now within the city limits of the City of Bel Aire. Most recently, the County issued its Health Care Facilities Refunding Revenue Bonds, Series 2010 (Catholic Care Center, Inc.) (the "2010 Bonds") which are the only bonds currently outstanding with respect to these facilities. Catholic Care Center, Inc. is a joint venture between Via Christi Health, Inc. and the Catholic Diocese of Wichita.
Recently, Ascension Health Alliance ("Ascension") became the 100% member of Via Christi Health, Inc. In connection with this change in control, Ascension intends to have the Wisconsin Health and Educational Facilities Authority issue revenue bonds (the "New Bonds"), a portion of the proceeds of which will be used to provide for the payment of, and defease, all the outstanding 2010 Bonds issued by the County.
Catholic Care Center, Inc. has provided notice that it intends to exercise its option to purchase the Catholic Care Center facility from the County, pursuant to the Lease Agreement executed in connection with the 2010 Bonds, upon the defeasance of the 2010 Bonds (which will occur by the deposit of government securities with an escrow trustee in an amount necessary to pay all principal of, interest on, and premium, if any, on the 2010 Bonds at their first available redemption date), which defeasance is scheduled to occur on or about June 18, 2013 or as soon thereafter as practicable (the "Closing Date").
Approval of the Resolution and execution and delivery of the documents authorized therein will serve to convey title back to the Catholic Care Center facilities from the County to Catholic Care Center, Inc. and clear any real estate encumbrances associated with the 2010 Bonds.
Alternatives:
The Board technically has the option of not holding the hearing or not approving the resolution. If they chose to do either of these, Ascension would either leave the Catholic Care Center and St. Teresa bonds outstanding, instead of paying them off with the new financing (which is very unlikely), or they would pay those bonds off anyway, but use taxable bonds instead of tax-exempt bonds, which would result in a higher interest rate and local health care costs.
Financial Considerations:
The Catholic Care Center is exempt from property taxes pursuant to its ownership by a 501(c)(3) entity and its nature as an adult care home. No property tax abatement was granted in connection with the 2010 Bonds; therefore, the redemption and/or defeasance of the 2010 Bonds will have no effect upon the taxation of the Catholic Care Center.
The 2010 Bonds are special limited obligations of the County payable only from revenues received from the Catholic Care Center, Inc. and its facilities. The proposed New Bonds will not impose any obligation on the County pay the principal of, premium or interest on the New Bonds. Ascension will pay any and all costs associated with the New Bonds.
Legal Considerations:
The Catholic Care Center, Inc. has the right under the Lease Agreement to exercise its option to purchase the facilities if (1) provision for the payment of the principal of, interest on, and premium, if any, on the 2010 Bonds has been made by irrevocable deposit of government securities with an escrow trustee in the amount necessary for said payment, and (2) a fee in the amount of $1,000 has been paid to the County. On the Closing Date, condition (1) will occur in connection with the issuance of the New Bonds by the out-of-state authority. Catholic Care Center, Inc. has already provided the $1,000 fee to the County.
J.T. Klaus of Triplett, Woolf & Garretson, LLC has prepared a Resolution and the other necessary documents for the County to transfer title of the Catholic Care Center to Catholic Care Center, Inc. The Resolution and these documents have all previously been provided to Joe Norton, the County's Bond Counsel, for his review and comment.
Policy Considerations:
Any time an industrial revenue bond is redeemed or defeased, the County is obligated to transfer the financed project to the bond tenant, upon the execution of its option to purchase.
Outside Attendees: J.T. Klaus, Triplett, Woolf & Garretson, LLC, representing Catholic Care Center
Joe L. Norton, Gilmore & Bell, PC, Bond Counsel
Multimedia Presentation: