DEPARTMENT: Finance
DEPARTMENT HEAD: Troy Elliott
COUNCIL DISTRICTS IMPACTED: City-wide
SUBJECT:
Approval of financing for purposes of the Internal Revenue Code
SUMMARY:
This Resolution approves the issuance by the Tarrant County Cultural Education Facilities Finance Corporation of its Revenue and Refunding Bonds (CHRISTUS Health) Series 2018 in one or more series for purposes of Section 147(f) of the Internal Revenue Code.
BACKGROUND INFORMATION:
Section 147(f) of the Internal Revenue Code (the “Code”) requires that the issuance of any qualified 501(c)(3) obligations be approved by the applicable elected representative of the governmental unit in which the project is located after a public hearing following reasonable public notice.
The City was contacted regarding a financing by the Tarrant County Cultural Education Facilities Finance Corporation (the “Corporation” or the “Issuer”) for the benefit of the CHRISTUS Health, a Texas non-profit corporation, and/or any one or more of its affiliates (the "Borrower"). The plan of finance includes one or more issues in one or more series or subseries of revenue bonds (the “Bonds”) to be issued by the Issuer in an aggregate principal amount not to exceed $600,000,000 for any one or more of the following purposes: (i) pay the costs of issuance of the Bonds, (ii) fund one or more of the debt service reserve funds for the Bonds, (iii) pay interest rate swap termination payments relating to bonds issued for the benefit of the Borrower; and/or (iv) finance and/or refinance the acquisition, construction, reconstruction, renovation, rehabilitation and/or equipping of health facilities, including any one or more of the following locations in San Antonio:
• CHRISTUS Santa Rosa Hospital and related facilities and/or The Children’s Hospital of San Antonio and related facilities located at:
o 15900 La Cantera Pkwy, San Antonio, TX 78256
o 315 North San Saba, San Antonio, TX 78207
o 1434 & 1435 Sonterra Blvd, San Antonio TX 78258
o 11503 NW Military Hwy, San Antonio TX 78231
o 156 W Sunset, San Antonio TX 78209
o 2701 Babcock Road, San Antonio, Texas 78229
o 2827, 2829, & 2833 Babcock Rd, San Antonio, TX 78229
o 333 North Santa Rosa, San Antonio, Texas 78207
• CHRISTUS Santa Rosa Hospital - Alamo Heights and related facilities located in San Antonio, Texas at 423 Treeline Park, San Antonio, TX 78209
• CHRISTUS Santa Rosa Hospital - Westover Hills and related facilities and/or The Children’s Hospital of San Antonio Emergency Center at Westover Hills and related facilities located in San Antonio, Texas at:
o 11212 State Highway 151, San Antonio, TX 78251
o 11130 CHRISTUS Hills, San Antonio, Texas 78251
• 99.546 acre tract of land the southeast corner of which is bounded by the intersection of State Highway 151 and Westover Hills Boulevard with the tract located generally to the northwest of such intersection and east of Ellison Drive in San Antonio, Texas 78251
A public hearing with respect to the proposed projects and the issuance of the Bonds was held in the City of San Antonio on October 3, 2018 in compliance with Section 147(f) of the Code.
ISSUE:
To meet the requirements of the Code, the Borrower has requested that City Council adopt a Resolution confirming public approval of the financing plan and the issuance of the one or more series of Bonds by the Corporation up to a maximum aggregate amount of $600,000,000, to be used to finance any one or more of the aforementioned projects. The consideration and approval of this action is consistent with the City's practice of providing consent for projects located in San Antonio that involve non-profit institutions obtaining tax-exempt financing for capital improvement projects through conduit issuers.
ALTERNATIVES:
If the City does not adopt a Resolution confirming public approval of the bond issuance by the Corporation, this financing cannot be effectuated.
FISCAL IMPACT:
The Resolution does not obligate the City to pay the debt or the Bonds, and does not obligate or create any expectations of, or liabilities for, the City. The Borrower is solely responsible for paying all debt service and other costs associated with the Bonds. The Borrower will pay the City an administrative fee of $2,500 upon the adoption of the requested Resolution.
RECOMMENDATION:
Staff recommends approval of the Resolution which approves the issuance by the Tarrant County Cultural Education Facilities Finance Corporation of its Revenue and Refunding Bonds (CHRISTUS Health) Series 2018 in one or more series for purposes of Section 147(f) of the Internal Revenue Code.