Wednesday, June 10, :00 p.m. Board Room, University Hospital 4502 Medical Drive San Antonio, Texas

Transcription

1 SPECIAL MEETING OF THE BOARD OF MANAGERS 4:00 p.m. Bard Rm, University Hspital 4502 Medical Drive San Antni, Texas MINUTES BOARD MEMBERS PRESENT: Rbert L. Jimenez, M.D., Chair Ira Smith, Secretary Rbert Engberg Alex Briseñ Linda Rivas Rebecca Q. Cedill BOARD MEMBERS ABSENT: James R. Adams, Vice Chair OTHERS PRESENT: Gerge B. Hernández, Jr., President/Chief Executive Officer, University Health System Peggy Deming, Executive Vice President/Chief Financial Officer, University Health System Michael Hernandez, Attrney, Directr, Cntract Cmpliance & Administratin, Facilities Develpment & Prject Management Leni Kirkman, Executive Directr, Crprate Cmmunicatins & Marketing Karen McMurry, Vice President, Legal Services & Risk Management, University Health System Jean Setzer, Ph.D., Vice President, Strategic Planning, University Health System Mark Webb, Vice President, Facilities Develpment & Prject Management Jeff Kuhn, C-Bnd Attrney, Fulbright & Jawrski Clay Binfrd, C-Bnd Attrney, Fulbright & Jawrski William T. Avila, C-Bnd Attrney, Law Office f William T. Avila Dn Gnzales, C-Financial Advisr, Estrada Hinjsa Tny Jass, C-Financial Advisr, Estrada Hinjsa Paul Jack, C-Financial Advisr, Estrada Hinjsa Raul Villasenr, C-Financial Advisr and Senir Vice President, First Suthwest Cmpany And Other Attendees.

2 Special Meeting f the Bard f Managers Page 2 f 5 MEMBERS OF THE PRESS: Dn Finnley, San Antni Express News CALL TO ORDER AND RECORD OF ATTENDANCE: ROBERTO L. JIMENEZ, M.D., CHAIRMAN, BOARD OF MANAGERS - Dr. Jimenez call the meeting t rder at 4:15 p.m. INVOCATION AND PLEDGE OF ALLEGIANCE Ms. Liliana DeLaTrre said the invcatin and Dr. Jimenez led the pledge f allegiance. NEW BUSINESS CONSIDERATION AND APPROVAL OF A RESOLUTION OF THE BOARD OF MANAGERS OF THE BEXAR COUNTY HOSPITAL DISTRICT REQUESTING THAT THE BEXAR COUNTY COMMISSIONERS COURT TAKE ALL REQUIRED ACTIONS TO PERMIT THE ISSUANCE OF A SECOND SERIES OF CERTIFICATES OF OBLIGATION TO FINANCE THE BEXAR COUNTY HOSPITAL DISTRICT S MASTER FACILITY PLAN AND CONTEMPLATED PLAN OF FINANCE; SELECTION OF THE UNDERWRITING SYNDICATE, INCLUDING THE SENIOR MANAGING UNDERWRITER, FOR THE SALE OF THESE CERTIFICATES OF OBLIGATION; AUTHORIZING THE DISTRICT TO GIVE ANY REQUIRED NOTICES OF INTENTION; AUTHORIZING THE DISTRICT S STAFF, CO-BOND COUNSEL, AND CO-FINANCIAL ADVISORS TO COORDINATE THIS MATTER WITH THE NATIONAL RATING AGENCIES AND BOND INSURANCE COMPANIES; AUTHORIZING ALL OTHER REQUIRED PRELIMINARY ACTIONS ON BEHALF OF THE DISTRICT; AND OTHER RELATED ACTIONS GEORGE HERNÁNDEZ, JR./PEGGY DEMING SUMMARY: Cnsistent with the plan f finance previusly adpted in 2008 fr the Master Facility Plan, the Health System is ready t initiate the prcess t issue the secnd series f certificates f bligatin. As were the first series f certificates f bligatin, the secnd series will be issued by the Cmmissiners Curt in the name f and fr the benefit f the Bexar Cunty Hspital District. The debt issuance is supprted by apprximately a $ reductin f the Health System s Maintenance & Operatins ad valrem tax rate. The current timetable anticipates that the Cmmissiners Curt will adpt a Reslutin apprving the Preliminary Official Statement and Certificate Order (which includes delegated authrity) n July 28, Mr. Hernandez yielded the flr t Mr. Kuhn wh briefly summarized the Reslutin as fllws: Sectin 1 designates the underwriters t assist the Health System in cnnectin with the ffering f the certificates is prvided. Sectin 2 - requests that the Cmmissiners Curt adpt a Ntice f Intentin Reslutin authrizing the sale and delivery f the secnd series f certificates f bligatin; and Sectin 3 - authrizes the c-financial advisrs t crdinate the sale and all related financial aspects f the transactin, ensuring that the Health System

3 Special Meeting f the Bard f Managers Page 3 f 5 receives the lwest pssible interest rate, as well as cmpliance with all regulatins and rules prmulgated by the Municipal Securities Rule Making Bard. RECOMMENDATION: ACTION: EVALUATION: Staff recmmends that the Bard f Managers adpt a Reslutin requesting that the Bexar Cunty Cmmissiners Curt take all required actins t permit the issuance f a secnd series f certificates f bligatin t finance the Bexar Cunty Hspital District s Master Facility Plan and cntemplated plan f finance; Selectin f the underwriting syndicate, including the senir managing underwriter, fr the sale f these certificates f bligatin; Authrizing the District t give any required ntices f intentin; Authrizing the district s staff, cbnd cunsel, and c-financial advisrs t crdinate this matter with the natinal rating agencies and bnd insurance cmpanies; Authrizing all ther required preliminary actins n behalf f the District; and ther related actins. A MOTION fr apprval f this recmmendatin was made by Mr. Briseñ, SECONDED by Ms. Rivas, and PASSED UNANIMOUSLY. Mr. Kuhn reprted that it is pssible (based upn market cnditins) that tw Certificate Orders will be adpted t prvide the University Health System with the flexibility t sell up t a cmbined $290,000,000 in principal amunt f traditinal, tax-exempt certificates f bligatins and/r anther Certificate Order selling a third series f certificates f bligatin designated as Build America Bnds. Mr. Hernandez reprted that the underwriting syndicate selectin prcess which recently tk place was established t take advantage f Bexar Cunty s underwriting pl, and were all previusly qualified by the cunty. Eleven (11) firms were interviewed. Each f the firms was asked abut their experience with Build America Bnds, tax-backed credit, and abut their apprach t marketing the bnds. Each team was rated n specific questins t maximize value fr the tax payers. The members f the evaluatin cmmittee included tw staff members, David Smith f Bexar Cunty, Phyllis Garcia f San Antni Water System, and tw f the cfinancial advisrs. Staff reviewed key dates and the prcess t be fllwed fr issuance f the Certificates f Obligatin, Series Tw significant dates are June 28 and July 5, 2009, when required ntices f intent t issue bnds will be published. Mr. Kuhn advised the Bard f Managers that as a result f this publicatin, there is a legal risk that citizens may alter this prcess, r even stp it, if at least five (5) percent f the qualified vters in Bexar Cunty respnd by requesting a referendum electin within 30 days f the public ntice. Because the CIP will have such a psitive impact in the cmmunity, all invlved remain hpeful that an electin will nt be necessary. Dr. Jimenez thanked Mr. Finley fr educating the public and fr prviding cverage in all aspects f the CIP. Mr. Kuhn yielded the flr t Ms. Deming, Dn Gnzales and Raul Villasenr, wh at Mr. Briseñ s request, cnducted a brief review f the

4 Special Meeting f the Bard f Managers Page 4 f 5 financing plan apprved by Cmmissiners Curt in 2008 and the financing assumptins: Financed with 3 debt issues (2008, 2009 and 2011) UHS cntributes $120 millin cash reserves & 34% f I&S frm M&O ver tw years ( in 2008 & in 2009) Tax increase 1.9 cents in 2008 & ¾ f a cent in year final maturity Use Cunty s Net Appraised Value grwth assumptins Cmmitted t further reduce peratinal expenses & reduce tax rate by.68 &.66 cents in the next 2 years The market has evlved significantly since the financing plan and these assumptins were presented in Fr example, staff assumed the Series 2008 bnds wuld earn 2% interest, but are actually nly earning 1.3%, resulting in the Health System having t brrw an additinal $10 millin mre t finance the CIP. Because last year s debt issuance has nt yet been spent, it is imprtant fr the public t understand that the Stimulus Act f 2008 prvides a unique windw f pprtunity that will expire at the end f next year thrugh the build America bnds. This pprtunity was nt available in 2008 fr the first issuance f debt, nr will it be available in The market timing and grwth are ptimal and it is prudent t take advantage f this t minimize inflatinary risk. Other hspitals cannt take advantage f Build America Bnds because they are nly being ffered t municipalities. As an example, Mr. Kuhn reprted that City Public Service recently issued debt at a rate f 3.78% after deducting the benefit frm the stimulus, whereas the Health System s rate in 2008 was at 4.97%. This will help the University Health System tremendusly given the change in assumptins Regarding the investment banking firms recmmended as underwriters, Mr. Briseñ requested a breakdwn f participatin by small, wmen and minrity-wned categries, t which Ms. Deming replied as fllws: Siebert Bradfrd Shank & C., LLC 40% SWMBE Merril Lynch & C. 20% SWMBE Stifel, Niclaus & Cmpany, Inc. 8% SWMBE Mrgan Keegan & Cmpany 8% SWMBE Castal Securities, Inc 8% SWMBE Sterne, Agee & Leach, Inc. 8% SWMBE Suthwestern Capital Markets, Inc. 8% SWMBE

5 Special Meeting f the Bard f Managers Page 5 f 5 Dr. Jimenez expressed appreciatin fr Mr. Briseñ s guidance thrugh this very cmplex prcess. Mr. Smith suggested that staff prvide Cmmissiners Curt with a dcument t demnstrate the Bard s unanimus supprt n this issue given Mr. Adams absence tday. FOLLOW-UP: Mr. Briseñ suggested that last year s data tables be updated with the new assumptins and prvided t the Bexar Cunty Cmmissiners. Als, a summary f last year s issuance with the prprtin f fees paid t minrities, including financial advisrs and attrneys, wuld be helpful t the Bard members t answer cmmunity inquires as needed. Dr. Jimenez strngly encuraged Mr. Hernandez t keep the Cmmissiner s apprised f CIP matters as much as pssible by meeting individually with them. Bard members requested a cpy f the timeline f events tied t the 2009 issuance. ADJOURNMENT There being n further business, Dr. Jimenez adjurned the meeting at 5:05 p.m. Rbert L. Jimenez, M.D., F.A.P.A. Chairman, Bard f Managers Ira Smith Secretary, Bard f Managers Sandra D. Garcia, Recrding Secretary