Travis County Commissioners Court
August 2, 2005
Item 34
Let's call number 34 which is consider and take appropriate action on resolution approving issuance of limited obligation bonds by he will campo health developments development corporation and for a health facility located at or adjacent to 4100 jackson avenue, Austin and owned by westminster marion and authorize the county judge to sign related document.
>> I’m here with kevin lee, the attorney for westminster manner. And this is similar to requests that have come before the Commissioners court in the past, but also different in that this -- they are asking the Commissioners court permission to use an issue youer that is not in Travis County to issue health bonds. The principal use of the funds, the proceeds of the bonds will be to repay bonds that have -- that are -- have been issued by the Travis County health facilities development corporation. And we have been fortunate to have fees on an annual basis from those bond issues and of course those fees will, as soon as the bonds are paid off, then they will not be obligated to pay those fees.
>> judge, you arrived at a cattle on what we think -- calculation on what we think the fee ought to be based on the new policy, which is a base, and then a prorated of what we would have been entitled to for the remainder of this fiscal year.
>> yeah, the -- I’ve got two or three points that I made in my memo. First is that this refinancing by he will campo really costs this corporation things that we otherwise would have received, and those payments total -- can't find mr. Davis' memo. 142,031. And my proposal was for $15,000. $10,000 would be the 10 basis points that we would receive if we did the refinancing. And $5,000 I arrived at by thinking that it would take 60 days to close. And if we prorated the sum due for '06, that would be roughly 5,000 -- we would receive $29,000 in '06. So 5,000 of that would be roughly 1/6.
>> that's right.
>> an additional $15,000. But we received a counteroffer. Or did we?
>> yes, we did.
>> and what is it?
>> and that was to pay the corporation $12,000. And to pay the professional fees to -- to our attorney, $1,500, and financial adviser $1,500.
>> so 15,000, but we would take care of the consultant.
>> right.
>> basically. That's enough for me. That will work?
>> that will work for us.
>> and we appreciate your doing this. W-plt you to know except for the $10 million cap, we would certainly be doing this with you. We have had bonds outstanding, I represented the manor for years, we've had bonds outstanding all of that time and said we would still be except for we're up against the cap. And we hope at some point in the future to be back with you.
>> in one of my tougher moments I had concluded the consultants should not be paid at all, but take them out of our part.
>> judge, I move approval of the resolution and pulling in the counter of thousand 15,000 is divided, 12 for us and 3,000 for the two consultants.
>> second. Discussion? Yes, sir.
>> how do we come up with the cap? When was that set up and why is there that limitation?
>> .
>> this project is going to be financed under an internal revenue code provision that limits tax qualified -- or bank qualified debt to $10 million for any one jurisdiction in any one year and obviously Travis County that obligations are issued are well in excess of that. So Travis County health facilities development could not issue the bonds for this particular financing. And I think what kevin is alluding to they are planning on doing some additional financings so within a year or two they may be back to the Travis County health facilities development corporation for future financing. But it's a tax rule that prevented our corporation from-.
>> it's not a [inaudible] tax.
>> no, it's internal revenue code.
>> and the health association that -- the Travis County health facilities development corporation joined a couple weeks ago is hard at work trying to eliminate that cap for issuers. Which would be a good thing.
>> is that that one where that meeting in new orleans you were going to go to?
>> yes. But I’m not going now.
>> any other jurisdictions that issue bonds as we do, are they under the same type of cap restriction or are they just across the board?
>> they are all under the same cap.
>> all under the same cap. Same rule.
>> that's why in this case because we're doing almost -- we may do the full 10 million, we had to find another corporation that wasn't going to do anything in the year so we could --
>> so you could come up under that cap.
>> Travis County does thought have any other health facilities development corporations that I’m aware of.
>> so is it right here where we are.
>> any more discussion? Remember our uncommon spirit of cooperation, collaboration, et cetera.
>> thank you. We'll be back.
>> all in favor? Total of 15,000, we take care of the consultant. That passes by unanimous vote with director Gomez absent. Commissioner.
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Last Modified:
Wednesday, August 2, 2005 10:01 AM