HomeMy WebLinkAboutRes2009-084Sponsored by: Oates
CITY OF SEWARD, ALASKA
RESOLUTION 2009-084
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING A NEW DEBT SERVICE FUND TO ACCOUNT
FOR CAPITAL COST REIMBURSEMENTS, OTHER REVENUES, AND
DEBT SERVICE COSTS ASSOCIATED WITH SEWARD MOUNTAIN
HAVEN
WHEREAS, the Seward City Council passed Resolution 2006-28 on March 13, 2006 and
Resolution 2007-50 on May 14, 2007, authorizing the issuance of $27 million in revenue bonds for
the purpose of financing, designing, constructing and equipping a new long-term care facility in
Seward, known as Seward Mountain Haven ("SMH"); and
WHEREAS, the primary mechanism for repayment of these bonds is expected to be the
capital cost component of Medicare revenues generated from the facility, with said capital cost
reimbursement becoming effective upon opening of SMH on approximately October 1, 2009; and
WHEREAS, the Seward City Council hereby intends to utilize 100% of said revenues for the
sole purpose of repaying the revenue bonds to construct and equip the facility, and therefore directs
the city administration to work with current manager of SMH, Providence, to facilitate the transfer of
the capital cost component of Medicare revenues, and any other capital cost-related revenues, to the
City for deposit into the newly established debt service fund, and further directs the city
administration to designate the entirety of these funds solely for the purpose of bond repayment; and
WHEREAS, the title of the newly established debt service fund will be "Seward Mountain
Haven Debt Service Fund".
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA that:
Section 1. The city manager is hereby directed to establish a new debt service fund for the
purpose of accounting for revenues and debt service expenditures related to Seward Mountain
Haven.
Section 2. The city manager is hereby directed to develop an agreement with Providence for
the proper segregation of revenues associated with the capital costs of the facility, and the transfer of
those funds from Providence to the City of Seward..
CITY OF SEWARD, ALASKA
RESOLUTION 2009-084
Section 3. The city manager is hereby directed to utilize revenues received from the capital
component of the Seward Mountain Haven facility solely for the purpose of paying debt service
principal and interest payments, until the entire amount of debt associated with the facility is paid in
full.
Section 4. This resolution shall take effect immediately upon its adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 14th day of
September, 2009.
THE CITY OF SEWARD~ ALASKA
Clark Corbridge, Mayor
AYES: Valdatta, Dunham, Bardarson, Smith, Keil, Corbridge
NOES: None
ABSENT: None
ABSTAIN: None
VACANT: One
ATTEST:
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Jean Lewis. CMC ,5 e• ~ ~ ~"~~~~~~°~~
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Council Agenda Statement
Meeting Date: September 14, 2008
From: Kristin Erchinger, Finance Director
Through: Phillip Oates, City Manager ~ ~~ p
Agenda Item: Creation of Seward Mountain Haven Debt Service Fund
BACKGROUND & JUSTIFICATION: -
The Seward City Council authorized the issuance of $27 million in revenue bonds to finance, design, construct, and
equip Seward's new long-term care facility, Seward Mountain Haven ("SMH"). The annual debt service payments on
the bonds will be approximately $1.97 million. The revenues to repay the bonds will come directly from revenues of
Seward Mountain Haven.
The purpose of this action is to establish a mechanism whereby Providence Seward Medical & Care Center can segre ate
the revenues related to the capital component of their daily customer charges, transfer those funds to the City to rega
bonds and capital costs associated with SMH, and ensure that the City has the means to segregate and properly account
for these funds. To that end, the City must establish a new debt service fund to account for both the revenues comin
from SMH, and the City payments to be made for debt service and capital costs. g
CONSISTENCY CHECKLIST:
Where applicable, this resolution is consistent with the Seward City Code, Charter, Comprehensive Plans, Land Use
Plans, Strategic Plan and City Council Rules of Procedures.
INTENT:
The intent of this action is to ensure that all revenues received at the long-term care facility which are proportionall
attributable or allocable to the capital component of the daily rate (as opposed to the portion attributable to other non-
capital costs), be transferred from the current manager of the facility, Providence Seward Medical & Care Center, to the
City of Seward, to fund debt service and capital payments related to Seward Mountain Haven.
FISCAL NOTE:
There is no cost associated with establishing a new fund. The City and Providence staff will develop a mechanism for
accounting for the revenue associated with capital costs, to ensure that they are available to meet debt service and capital
needs.
Approved by Finance
ATTORNEY REVIEW: no
RECOMMENDATION:
The City Council authorize the City Manager to establish a new debt service fund to account for capital cost
reimbursements, other revenues, and debt service costs associated with Seward Mountain Haven.