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Sponsored by: Hunt <br /> CITY OF SEWARD, ALASKA <br /> RESOLUTION 2012 -009 <br /> A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, <br /> ALASKA, AUTHORIZING A DELAY IN REMITTANCE OF CAPITAL <br /> ADD -ON PAYMENTS FROM PROVIDENCE SEWARD MEDICAL CENTER <br /> (PSMC) TO THE CITY OF SEWARD IN THE AMOUNT OF $2,071,323.96 <br /> TO COVER CASH FLOW <br /> WHEREAS, Providence Health & Services Alaska (PH &S) manages and operates <br /> Providence Seward Medical Center (PSMC) on behalf of the City of Seward (City) and to the extent <br /> that PSMC does not maintain a positive cash balance, the shortfall is loaned to PSMC by PH &S at <br /> the rate of prime plus 1% interest, per the Management and Operating Agreement between the City <br /> and PH &S; and <br /> WHEREAS, each month PSMC remits payment to the City reflecting the capital add -on <br /> component of the revenues from the long -term care facility. This currently amounts to $240.07 per <br /> patient day, and the City utilizes 100% of these receipts to cover repayment of principal and interest <br /> payments on the Seward Mountain Haven revenue bonds; and <br /> WHEREAS, as of December 31, 2011, PSMC has received $2,071,323.96 in capital add -on <br /> payments which it has not yet passed on to the City due to operational shortfalls resulting from an <br /> average daily census of 32 and reimbursement rate disputes with the State of Alaska; and <br /> WHEREAS, a temporary delay in reimbursement from Seward Mountain Haven will <br /> mitigate a cash shortfall and reduce the need to borrow money from PH &S and pay interest on said <br /> borrowing; and <br /> WHEREAS, the City expects that PSMC will remit sufficient funds to the City to ensure <br /> timely payment of upcoming bond payments in 2012 and 2013, and that once a plan is in place to <br /> mitigate this shortfall, full reimbursement will be made to the City. <br /> NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY <br /> OF SEWARD, ALASKA, that: <br /> Section 1. The Seward City Council hereby authorizes a delay in remittance of <br /> $2,071,323.96 from PSMC to the City representing a portion of the 2011 capital add -on portion of <br /> SMH revenues, to be booked as a loan receivable from PSMC at December 31, 2011. <br /> Section 2. It is fully expected that PSMC will remit payments sufficient to cover the timely <br /> payment of revenue bond debt service payments in 2012 and 2013, and that the full reimbursement <br /> ire <br /> of this short -term loan will be made by PSMC within a reasonable timeframe. <br />