Agenda Item Cover Sheet Agenda Item N o.

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1 Agenda Item Cover Sheet Agenda Item N o. Meeting Date B-3 December 02, 2015 Consent Section x Regular Section Public Hearing Subject: Hillsborough County Industrial Development Authority Hospital Revenue Refunding Bond (Tampa General Hospital Project), Series 2015 on Behalf of Tampa General Hospital Department Name: Economic Development Contact Person: Lindsey Kimball/Jaksa Petrovic Contact Phone: / Sign-Off Approvals: 11/19/2015 Assistant County Administrator Date Department Director Date 11/19/ /19/ /19/2015 Management and Budget Approved as to Financial Impact Accuracy Date County Attorney Approved as to Legal Sufficiency Date Staff's Recommended Board Motion: Staff recommends approval of the Hillsborough County Industrial Development Authority's not to exceed $187,000,000 Hospital Revenue Refunding Bond (Tampa General Hospital Project), Series 2015, based upon a review of their application and subject to: 1) Adherence to and compliance with the financial conditions specified by the County's Financial Advisor as described in the attached staff review. 2) Review and acceptance of final bond documents by the County Attorney/Bond Counsel. There is no anticipated County financial liability or obligation incurred by this action. Financial Impact Statement: There is no anticipated County financial liability or obligation incurred by this action. Background: Florida Health Sciences Center, doing business as Tampa General Hospital ("TGH"), a Florida not-forprofit 501(c)(3) corporation operating a regional referral, academic medical facility and Level I Trauma Center hospital on Davis Islands in Tampa within Hillsborough County, Florida is requesting Hillsborough County's approval of the Hillsborough County Industrial Development Authority ("IDA") not to exceed $187,000,000 Hospital Revenue Refunding Bond ("Tampa General Hospital Project"), Series 2015 (the "Bond"). The Bond will refund the IDA's Variable Rate Demand Purchase Revenue Bonds, (Tampa General Hospital), Series 2006, which financed the expansion, improvement and further

2 equipping of acute care hospital facilities, as per TGH's revised Five Year Capital Plan. On November 5, 2015, at a noticed public meeting, the IDA approved an Inducement Resolution for the Bond. The TEFRA Hearing for the Bond is scheduled for November 26, Final consideration of the Bond by the IDA is scheduled for December 3, Acceptance of final bond documents by the County Attorney/County's Bond Counsel, and adherence to and compliance with conditions and the terms specified in the County Financial Advisor's Report, as Financial Advisor to the IDA (all contained in the following staff report) are conditions of staff's endorsement. The IDA's general counsel will present a report concerning the IDA's action regarding the Bond to the BOCC on December 2, List Attachments: 1) County Staff Review, 2) County Financial Advisor Report, 3) Bond Counsel Letter, 4) IDA Inducement Resolution

3 3 $187,000,000 Industrial Development Authority Hospital Revenue Refunding Bond, (Tampa General Hospital), Series 2015 Florida Health Sciences Center, doing business as Tampa General Hospital, a Florida not-for-profit 501(c)(3) corporation operating a regional referral, academic medical facility and Level I Trauma Center hospital on Davis Island in Tampa within Hillsborough County, Florida is requesting Hillsborough County s approval of the Hillsborough County Industrial Development Authority s ( IDA ) not to exceed $187,000,000 Hospital Revenue Refunding Bond (Tampa General Hospital Project),Series 2015 (the Bond ). Refinancing The Bond will refund the IDA s Variable Rate Demand Purchase Revenue Bonds, Tampa General Hospital, Series 2006, which financed the expansion, improvement and further equipping of acute care hospital facilities, as per TGH s revised Five Year Capital Plan. IDA Approval On November 5, 2015, at a noticed public meeting, the IDA approved an Inducement Resolution for the Bond. The TEFRA Hearing for the Bond is scheduled for November 26, Final consideration of the Bond by the IDA is scheduled for December 3, Acceptance of final bond documents by the County Attorney/County s Bond Counsel, and adherence to and compliance with conditions and the terms specified in the County Financial Advisor s Report, as Financial Advisor to the IDA (all contained in the following staff report) are conditions of staff s endorsement. The IDA s general counsel will present a report concerning the IDA s action regarding the Bond to the BOCC on December 2, BOCC Approval Tampa General Hospital requests the approval of the Board of County Commissioners during the December 2nd, 2015 regular meeting for its application of up to $187,000,000 in IDA financing. County Staff Review The application has been under review by the following County departments, including the County s Financial Advisor: Economic Development Department s Small/Minority Business Development Section, and Corporate Business Development Sections; and the County Attorney's Office. The reports of the respective departments are as follows: County Financial Advisor Report The County s Financial Advisor, Marianne Edmonds of Public Resources Advisory Group, Inc. has reviewed the application and supplementary documentation relating to the proposed Industrial Development Bond financing Tampa General Hospital (the "Applicant"). The report is included as an attachment.

4 County Attorney's Office The application was reviewed by the County's Bond Counsel, Bryant Miller Olive, P.A.. Bond Counsel submitted the following findings: Pursuant to your request, [Bond Counsel]... have reviewed draft bond documents relating to [Tampa General Hospital s application for industrial development bond financing from the Hillsborough County Industrial Development Authority Hospital Revenue Refunding Bonds, (Tampa General Hospital Project), Series 2015 (the Bonds)]. Based upon the application to the Authority, [Bond Counsel] understands that the project is within Hillsborough County and will be refinanced by the Bonds. The Bonds are being issued to refund the outstanding Hillsborough County Industrial Development Authority Hospital Revenue Bonds (Tampa General Hospital Project), Series The Series 2006 Bonds financed the cost of expansion, improvement, and equipping of the Borrower s acute care hospital facilities (the Hospital ) including (i) an approximate 300,009 square foot addition to the hospital on the main campus; (ii) the renovation, remodeling and/or improvements to the existing facilities of the Hospital; (iii) construction of additional parking facilities to support hospital operations and services; (iv) acquisition of and improvements to an off-site family care center and a patient care modular facility; (v) the acquisition of and improvements to facilities located immediately adjacent to the Hospital s main campus for office, administrative and healthcare purposes; and (vi) other capital expenditures ancillary and/or related thereto (collectively, the Refinanced Project ). Based solely upon foregoing, the proposed Refinanced Project is the type of project eligible to be financed pursuant to Part II and III of Chapter 159, Florida Statutes. [Bond Counsel] have reviewed the preliminary bond documents prepared by counsel to the Borrower and have determined, pursuant to Hillsborough County s guidelines, that the documents accurately reflect that neither the faith and credit nor the taxing power of the Authority or of the County or of the State of Florida or any political subdivisions thereof is pledged to the payment of the principal of or the interest, or premium, if any, on the Bonds. 4 Economic Development (Equal Employment Opportunity Section) The Small/Minority Business Development Section of the Economic Development Department has reviewed Tampa General Hospital s IDA Bond application. Specifically, Part II: Applicant's Civil Rights Status of the application was found to be in compliance with the requirements set forth by the Hillsborough County Board of County Commissioners. Economic Development (Corporate Business Development Section) The economic benefits of this project are based upon the continued operation and successful expansion of Tampa General Hospital (TGH), in Hillsborough County. TGH s project proposes to contribute to the local economy in the following ways: 1. Continued employment of a workforce of over approximately 6,800 full-time and 930 part-time employees with an estimated $528,000,000 in annual payroll and benefits. 2. Since 2006 Tampa General Hospital has: (a) Completed the construction of a 1,400 space parking facility in 2007 (b) Completed construction of 340,000 sq.ft. Bayshore Pavilion consisting of: (i) Emergency and Trauma Center with 64 private treatment rooms and six trauma rooms which opened in late 2007,

5 (ii) Cardiovascular Center with 47 private pre and post-procedure rooms, six cardiac catheterization labs and six interventional radiology suites, which opened in early 2008, (iii)women s Center with 21 labor/delivery/recovery rooms, four C-section rooms and four gynecology operating rooms which opened in early 2008, (iv) Intensive Care Unit with 50 ICU beds opened between late 2007 and summer of 2008, (v) Digestive Diagnostic & Treatment Center with 10 procedure rooms, 24 pre and post-procedure rooms, and 32 medical-surgical beds. (c) Construction of the Bayshore Pavilion also provided temporary employment of approximately 300 construction workers. (d) Completed construction of 125,000 sq.ft. Medical Office Building in 2007 (e) TGH capacity has increased from 877 beds to 1,011 beds (f) Increased admissions from just over 36,500 to just over 40,500 (g) Increased its resident practitioners from 256 to over 300 (h) Increased its employees from approximately 4,800 to over 6, The project has resulted in greater support and enhancement of TGH s contribution to University of South Florida College of Medicine s mission to be on the leading edge of innovations in medical care and research as evidenced by increased number of residents. 4. Augmenting the quality of health care available in Hillsborough County can be attributed as an intangible and marginal benefit to economic development by its value of improving the community s quality of life. 5 On the basis of the significant contribution to the County's existing workforce, and quality of life improvements achieved, the Corporate Business Development Section of the Economic Development Department recommends approval of the application. Staff Recommendation Based upon the information provided by the Applicant and subsequent reviews by various County departments and agencies, staff recommends that Tampa General Hospital's application for the IDA s issuance of the Bond be approved subject to: 1. Adherence to and compliance with the financial conditions specified in the County Financial Advisor s section. 2. Review and acceptance of final bond documents by the County Attorney and the County's Bond Counsel. DOCUMENT3

6 6 100 SECOND AVENUE SOUTH, SUITE 903 ST. PETERSBURG, FLORIDA TEL: (727) FAX: (727) TO: FROM: RE: Hillsborough County Industrial Development Authority Marianne F. Edmonds PUBLIC RESOURCES ADVISORY GROUP Financial Advisor s Review Tampa General Hospital (Florida Health Sciences Center, Inc.) Financing Application DATE: November 18, 2015 Florida Health Sciences Center, Inc. ( FHSC ) doing business as Tampa General Hospital (the "Applicant" or TGH ), has submitted a preliminary application to the Hillsborough County Industrial Development Authority ( Authority ) for the refinancing of the Authority s Series 2006 Bonds (Tampa General Hospital, Inc. Project) (the Series 2006 Bonds ). The following is a summary of the application by FHSC relating to the proposed Industrial Development Bond financing in the not to exceed amount of $187 million, in order to refund the Authority s Series 2006 Bonds (Tampa General Hospital Project). Summary of Proposed Financing Pursuant to the application, the Applicant intends to refund the Series 2006 Bonds for interest rate savings estimated at $63, 443,737.35, with a loan from TDBank (the Bank Loan or Loan ). The Series 2015 Bank Loan: The proceeds of the Series 2015 Bank Loan will be loaned to TGH for the purpose of providing funds that, together with other available funds of TGH, will be deposited as cash or federal securities to an irrevocable escrow to defease the Series 2006 Bonds to their call date of October 1, 2016 and to pay certain financing costs. The Loan Commitment has not been signed by TGH; however, the following terms have been established: The Bank will have the right to put the Loan to TGH at the end of 15 years. Approximately $140 million of debt will need to be paid or refinanced at that time. The Series 2006 Bonds, which will be refunded with the proceeds of the Loan, were issued in the amount of $185,000,000 to pay a portion of the costs for TGH s Capital Plan. The Tampa General Hospital, Inc. Project consisted of the expansion, improvement and further equipping of TGH's health care facilities. Other Outstanding Debt Series 2012A Bonds $177,994,385 Maturing in various amounts through October 1, 2043 with interest rates of 3% to 5% Bank Loan $37,020,000 Maturing in various amounts through October 1, 2014 at an interest rate of 2.57% Current Ratings INDEPENDENT FINANCIAL ADVISORS

7 7 The Loan will not be rated. However, TGH currently has the following ratings on its outstanding Series 2012 Bonds. Moody s: A3 as of April 2, 2014 with a revised Outlook to Positive. Fitch: A as of July 15, 2015 with an Outlook of Stable. Estimated Sources and Uses of Funds Loan Proceeds: Par Amount $ 184,675, Total Sources: $184,675, Refunding Escrow Deposits: Cash Deposit $ 0.91 SLGS Purchases 183,829, Delivery Date Expenses: 188,829, Cost of Issuance 750, Bank Commitment Fee 92, Other Uses of Funds: Additional Proceeds 2, Total Uses $ 184,675, Tampa General Hospital Since 1927, TGH and its predecessors have provided health care services to residents of Hillsborough County and its surrounding counties. Florida Health Sciences Center, Inc. took over operation at the health care facilities known as Tampa General Hospital in 1997 pursuant to a Lease Agreement with the Hillsborough County Hospital Authority ("HCHA"), a governmental entity. TGH is accredited by the Joint Commission on Accreditation of Healthcare Organizations and the Commission on the Accreditation of Rehabilitation Facilities, certified by Medicare and Medicaid, and licensed by the State of Florida. TGH is licensed for 1,018 beds. Since 1970, the University of South Florida College of Medicine has utilized the Davis Islands facilities as its primary teaching hospital. There are currently more than 300 full-time equivalent residents assigned to TGH in the American College of Graduate Medical Education accredited residency programs. In addition to training physicians, TGH serves as a clinical site for a number of different university and community college training programs. The University of South Florida College of Nursing and the University of Tampa, Hillsborough Community College and St. Petersburg College utilize TGH for their nursing and other ancillary personnel-training programs. On October 1, 1997, Tampa General Hospital was converted from a public organization to a Florida not-for-profit corporation. TGH is exempt from federal income taxation under Section 501(a) of the Internal Revenue Code of 1986, as amended as an organization described in Section 501(c)(3) of the Code and not a private foundation as defined in Section 509(a) of the Code. The conversion resulted in the transfer of the assets and liabilities associated with the Hospital's operation from HCHA to FHSC. As part of the transaction, HCHA, a public body with a Board of Trustees appointed by the Hillsborough County Board of Commissions, owns the real property operated by the TGH and leases Page 2

8 8 it to TGH. The Lease associated with this has an initial term of forty-nine (49) years and may be renewed for an additional forty-nine (49) years. Rent under the Lease is Ten Dollars ($10.00) per year and has been prepaid for the initial forty-nine (49) year term. TGH is also required to pay an annual fee of $75,000 to fund HCHA operations. FINANCIAL REVIEW The Series 2015 Bonds are classified as Category B under the County and Industrial Development Authority policies. The objective of the Category B review is to reasonably determine that the applicant is creditworthy and that one can derive a high level of comfort that the applicant's continued operations will be sufficient to produce adequate cash flow to repay the bonds; in addition, that the project financed is neither speculative nor of an unproven nature such that the likelihood of a default on the bonds will result due to inadequate cash flow or the ultimate bankruptcy of the applicant. In addition, the review is to confirm that the terms and conditions of the agreements provide maximum protections without unduly constraining the applicant from operating profitably. Summary of Selected Financial Statements The following pages contain summaries of Revenues and Expenses; Balance Sheets for the four years ended September 30, 2014 and are derived from the audited financial statements of TGH. The preliminary and unaudited data for the fiscal year ending September 30, 2015 was also provided by TGH. Remainder of this Page Intentionally Left Blank Page 3

9 9 Consolidated Statements of Operations and Changes in Unrestricted Net Assets Fiscal Year Ended September 30 (dollars in thousands) Unrestricted Revenue, Gains and Other Support: Patient Service Revenue (net of contractual allowances and discounts) $ 1,026,427 $ 970,318 $ 1,032,349 $ 1,068,768 Provision for bad debts (68,656) (48,661) (77,459) (59,274) Net patient services revenue less provision for bad debts 957, , ,890 1,009,494 Disproportionate share distributions 29,841 26,121 23,637 23,644 Other revenues 27,678 40,353 40,685 47,070 Total unrestricted revenues, gains, and other support 1,015, ,130 1,019,212 1,080,209 Expenses Salaries and benefits 488, , , ,539 Medical supplies 221, , , ,372 Purchased services 82,699 72,366 75,832 90,469 Utilities and leases 21,106 20,747 20,395 20,587 Insurance 23,845 25,068 18,578 17,518 Depreciation and amortization 36,817 43,509 42,700 43,149 Professional fees 39,845 33,924 32,453 32,990 Interest 18,541 19,155 18,830 16,336 Other 76,430 72,937 76,538 83,212 Total Expenses 1,008, , ,423 1,029,171 Operating Income 7,227 11,417 32,789 51,038 Nonoperating gains (losses): Investment return 6,614 36,850 42,966 36,314 Other 9,088 (75) (7,092) 4,123 Total Non-operating net gains (losses) 15,703 36,775 35,874 40,437 Revenue, gains, and other support over expenses 22,929 48,192 68,664 91,475 Other changes in net assets: Net assets released from restrictions used for property and equipment 5,083 3,214 4,277 3,178 Pension-related changes other than net periodic pension cost (1,355) (530) 78,600 (5,292) Increase in unrestricted net assets $ 26,658 $ 50,876 $ 151,541 $ 89,361 Page 4

10 10 Operating Results for 2015 Preliminary & Unaudited (dollars in thousands) Operating Revenues: Net patient services revenue $ 1,009,494 $ 1,092,368 Disproportionate share 23,644 26,271 Other revenues 44,900 53,698 Total Operating Revenues $ 1,078,038 $ 1,172,337 Operating Expenses Salaries & Wages $ 387,142 $ 423,137 Employee Benefits 103, ,147 Professional fees 32,990 32,176 Medical supplies 234, ,567 Other supplies 24,866 24,921 Purchased services 90, ,324 Utilities and leases 20,587 24,231 Assessments 13,949 14,966 Medical Professional Care 32,816 37,824 Insurance 17,518 25,692 Other expenses 11,580 15,968 Depreciation and amortization 43,149 45,840 Interest 16,336 16,496 Total Operating expenses $ 1,029,171 $ 1,125,289 Gain from Operations $ 48,867 $ 47,048 Non-operating Activity Excluding Unrealized Gains 47,510 18,953 Gain $ 96,377 $ 66,001 Page 5

11 11 Summary Balance Sheets Fiscal Year Ended September 30 (dollars in thousands) * Current Assets $ 247,087 $ 282,428 $ 282,132 $ 316,667 $ 352,250 Assets Limited as to Use 472, , , , ,698 Other Long-Term Assets 10,967 10,131 9,412 8,648 7,784 Property, Plant and Equipment, net 445, , , , ,203 Total Assets $ 1,176,556 $ 1,251,509 $ 1,379,517 $ 1,498,954 $1,549,935 Current Liabilities $ 225,424 $ 252,718 $ 264,168 $ 307,973 $ 313,610 Other Liabilities 164, , ,007 93, ,037 Long-Term Debt, Less Current (including obligations under capital leases, excluding current installments) 368, , , , ,246 Net Assets 418, , , , ,436 Total Liabilities and Net Assets $ 1,176,556 $ 1,251,509 $ 1,379,517 $ 1,498,954 $1,549,935 *Unaudited. Discussion of Financial Performance As the unaudited numbers for FY2015 indicate, TGH continues its strong financial performance, demonstrated by operating profitability, solid liquidity and strong MADS coverage. While not all indicators in FY2015 were stronger when compared to 2014, TGH s overall performance is solid with a Stable A rating from Fitch Ratings and an A3 rating from Moody s. TGH has a conservative debt portfolio with capacity for additional debt. Although its MADS coverage by EBITDA dropped from 5.8x in 2014 to 4.8x in 2015, it continues to be well above Fitch s A category median of 3.8x and above Moody s 2014 preliminary median of 4.7x. Remainder of this Page Intentionally Left Blank Page 6

12 12 Financial Performance Indicators The following table is a summary of TGH s financial performance indicators for the past five years and indicators based on unaudited results for For comparative purposes, we have included the most recent medians published by Moody s Investor Service for A rated hospitals. Profitability Indicators: Historical * Moodys 1 Preliminary Medians 2014 Operating margin Including Unrealized Gain(Loss) Excess margin Including Unrealized Gain(Loss) EBIDA Margin Including Unrealized Gain(Loss) Liquidity Indicators: Days cash on hand Days In Accounts Receivables Cushion ratio Cash to Debt (%) Capital Indicators: MADS Coverage by EBIDA(x) Including Unrealized Gains(Loss) Debt to capitalization Debt to Assets(%) Moody s Publication: Preliminary US Not-for-Profit and Public Hospital 2014 Medians Growth in Hospital Revenue Edges Ahead of Expenses in * Provided by TGH based on Preliminary and Unaudited results. Liquidity Ratios: - Days Cash on Hand: Cash, Short Term Investments and Board Restricted Funds/Average 12-month rolling average daily expense - Days in Accounts Receivable: Net Accounts Receivable/net Average 3-month rolling average daily patient revenue - Cushion Ratio: Cash+Short Term Investments+Internally Designated Cash+Long Term Investments/Maximum Annual Debt Service(MADS) - Cash to Debt(%): Cash+Short Term Investments+Internally Designated Cash+Long Term Investments/Long Term Debt Profitability Ratios: - Operating Margin: Operating Income/ Total Revenue - Excess Margin: Excess Income/Total Revenue - EBIDA Margin: EBIDA*100/Total Revenue and Gains(Losses) Capital-Related Ratios: - MADS Coverage by EBIDA: EBIDA/MADS - Debt to Capitalization(%): Net L/T Debt/(Net L/T Debt+Unrestricted Net Assets - Debt to Assets(%): Net L/T Debt/Total Assets Page 7

13 13 Debt Service Coverage Ratio The following table sets forth the historical debt service coverage ratio for years 2010 to Historical Debt Service Coverage Projected Long-Term Debt Service Coverage Ratio (x) Financial Covenant Agreement TGH and the Authority entered into a Financial Covenant Agreement (the 2006 Agreement ) on September 28, 2006, the date of the closing of the Series In 2012, that agreement was amended and restated (the 2012 Agreement ). The chart below shows the differences between the original and the amended agreements Agreement 2012 Agreement Maintain liquidity at least equal to 60 days cash on hand, but not less than $50,000,000 or more than $150,000,000. Advance Loan Payment: Amount equal to (i) the interest due on the next interest payment date plus (ii) 1/2 of the principal due on the next principal payment date. To be paid Six months prior to the due date. Maintain liquidity at least equal to 45 days cash on hand, but not less than $50,000,000 or more than $150,000,000. Advance Loan Payments: Amount equal to (i) the 1/6 of the interest coming due on the next Interest Payment date, plus (ii) 1/12 of the principal amount or Mandatory Amortization Requirement coming due on the annual principal payment date. To be paid monthly. Remainder of this Page Intentionally Left Blank Page 8

14 14 IDA Criteria and Review Hillsborough County s IDA guidelines encourage an examination of eight specific items. The criteria typically included in the IDA s review, and our assessment of the applicability of the criteria is shown below. 1. Profitability in three of the applicant s last five fiscal years but demonstrating a positive trend for the future; 2. Income statement and balance sheet ratios that are within the range of such ratios for the applicant s industry as published by Moody s; 3. Financial audits for the most recent five years performed by a reputable firm of independent certified public accountants, resulting in unqualified opinions; Yes Yes Yes 4. No prior defaults on contracts or borrowings; Yes 5. The existence or likelihood of litigation that could reasonably be judged to impair the applicant s payment of bond obligations or the viability of the business operations to be funded with the PAB s; 6. At least 10% of the cost of the project financed with the PAB s should be funded with equity capital of the applicant; 7. If the applicant is a subsidiary or division of another company, the parent company must fully guarantee the repayment of the bonds; and, 8. Start-up ventures, real estate speculators, or companies without a minimum of a five-year operating history are generally discouraged from applying for PAB financing unless certain criteria are met. None Not applicable Not applicable Not applicable Recommendations Based upon our review of the information presented by the Applicant, we recommend approval of the proposed loan. The policy of the Authority requires restrictions on the denominations of and transfer of debt that is not rated. Our recommendation for approval is subject to the following conditions: 1. All documentation in connection with the issuance of the bonds and all supporting agreements, certificates and opinions of counsel shall be, in form and substance, satisfactory to counsel to the Authority and the County Attorney. 2. Review of the final numbers and the signed bank commitment letter by the Authority s Financial Advisor, General Counsel and Bond Counsel. Page 9

15 15 3. TD Bank will make the initial loan. Consistent with Authority guidelines, transfer of the loan will be only to the accredited investors as defined by the Securities and Exchange Commission Regulation D and in minimum denominations of not less than $100,000. The initial investor and any subsequent investor(s) must execute an investment letter. 4. Any material negative change in the credit ratings of the Applicant or any material change in the structure, covenants, terms and conditions of the proposed bonds from the information disclosed by the Applicant may require reconsideration by the Authority and the Board of County Commissioners. 5. The Authority and TGH will maintain the 2012 Agreement. 6. The Bonds will be secured by a leasehold mortgage and a pledge of Accounts, Deposit Accounts and General Intangibles. 7. The Authority will not be obligated to pay principal and interest on the proposed bonds and that neither the faith and credit nor the taxing power of the Authority or of the County or of the State of Florida or any political subdivision thereof is pledged to the payment of the principal of or the interest, or premium, if any, on the proposed bonds. 8. The Applicant will provide all information requested by the Authority, bondholders and the County to ensure compliance with secondary market disclosure requirements of SEC rule 15(c)(2)(12). Page 10

16 16 Attorneys at Law One Tampa City Center Suite 2700 Tampa, FL Tel Fax November 13, 2015 Jaksa Petrovic, Manager Corporate Business Development Economic Development Department Hillsborough County BOCC 601 East Kennedy Boulevard, 13th Floor Tampa, Florida Re: Issuance of Not Exceeding $187,000,000 Hillsborough County Industrial Development Authority Hospital Revenue Refunding Bonds (Tampa General Hospital Project), Series 2015 Dear Mr. Petrovic: In our capacity as Bond Counsel to Hillsborough County, we are responding to your request that we review the above-referenced proposed transaction of the Hillsborough County Industrial Development Authority (the "Authority"). Pursuant to your request, we have reviewed draft bond documents relating to the above-referenced bonds (the "Bonds") proposed to be issued on behalf of Florida Health Sciences Center, Inc. (the "Borrower") which operates the facilities known as Tampa General Hospital. Based upon the application to the Authority, we understand that the project is within Hillsborough County and will be refinanced by the Bonds. The Bonds are being issued to refund the outstanding Hillsborough County Industrial Development Authority Hospital Revenue Bonds (Tampa General Hospital Project), Series The Series 2006 Bonds financed the expansion, improvement and equipping of the Borrower's acute care hospital facilities (the "Hospital") including (i) an approximate 300,009 square foot addition to the Hospital on the main campus; (ii) the renovation, remodeling and/or improvements to the existing facilities of the Hospital; (iii) construction of additional parking facilities and/or the improvements to existing parking facilities to support hospital operations and services; (iv) acquisition of and improvements to an off-site family care center and a patient care modular facility; (v) the acquisition of and improvements to facilities located immediately adjacent to the Hospital's main campus for office, administrative and health care purposes; and Atlanta. Jacksonville. Miami. Orlando. Tallahassee. Tampa. Washington, DC

17 17 Jaksa Petrovic, Manager November 13, 2015 Page 2 (vi) other capital expenditures ancillary and/or related thereto (collectively, the "Refinanced Project"). Based solely upon the foregoing, the proposed Refinanced Project is the type of project eligible to be financed pursuant to Part II and III of Chapter 159, Florida Statutes. We have reviewed the preliminary bond documents prepared by counsel to the Borrower and have determined, pursuant to Hillsborough County's guidelines, that the documents accurately reflect that neither the faith and credit nor the taxing power of the County or of the State of Florida or any political subdivision thereof is pledged to the payment of the principal of or the interest, or premium, if any, on the Bonds. This letter is being solely provided to you for use by the County and solely in connection with this transaction and may not be relied upon by any person or entity. If you have any questions, please do not hesitate to call me. Sincerely, doc Grace E. Dunlap Managing Shareholder

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