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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: ~, ; ~~ • Jean Lewis. CMC ,5 e• ~ ~ ~"~~~~~~°~~ wd~ ~1 ~ r ,~~~a Ci Clerk v moo, ~ ~,: ~,~~ ~ • ~~ „, +,~wL ,~ 4 ~ ~~., ~, (City Seal) ~ ~~ ~' ~ ~ :~ ~._~ 1~ y ~.. N - N ,~~ ~..° . ~` dK ~lflfi~ 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.