STATE OF CONNECTICUT HEALTH AND EDUCATIONAL FACILITIES AUTHORITY

Transcription

1 STATE OF CONNECTICUT HEALTH AND EDUCATIONAL FACILITIES AUTHORITY Minutes of Authority Board Meeting October 17, 2012 The State of Connecticut Health and Educational Facilities Authority met at 1:30 p.m. on Wednesday, October 17, The meeting was called to order at 1:30 p.m. by, Chair of the Board of Directors of the Authority. Those present and absent were as follows: PRESENT: John M. Biancamano Benson R. Cohn Patrick A. Colangelo, Vice Chair Robert S. Dakers (Rep. Secretary Benjamin B. Barnes) Peter W. Lisi Dr. Estela R. Lopez Bryan K. Pollard, Esq., Chair ABSENT: Sarah K. Sanders (Rep. Honorable Denise L. Nappier) ALSO PRESENT: Jeffrey A. Asher, Executive Director Paula L. Herman, General Counsel Eileen MacDonald, Senior Transaction Specialist Kimberley Fontaine, Marketing & Philanthropy Coordinator JoAnne N. Mackewicz, Controller Michael F. Morris, Assistant Director Cynthia D. Peoples H., Assistant Director Debra M. Pinney, Manager of Administrative Services Samuel E. Rush, Deputy Director, CHESLA Jennifer Smyth, Legal Services Specialist David, Wasch, Legislative Liaison/ ECE Program Specialist Jeanette W. Weldon, Managing Director of the Connecticut Health and Educational Facilities Authority

2 GUESTS: Michael Andreana, Esq., Pullman & Comley LLC William Bowes, CFO, ConnSCU Coleman Casey, Esq., Shipman & Goodwin LLP Elaine Clark, VP for Facilities & Infrastructure Planning, ConnSCU Keith Epstein, Assistant Vice Chancellor for Planning & Technical Services, ConnSCU Matt Fleury, President/CEO, Connecticut Science Center Hank J. Gruner, VP of Programs, Connecticut Science Center Jason A. Krechko, Engineer, GZA GeoEnvironmental, Inc. Kimberley W. Mooers, Sr. VP, Roosevelt & Cross Inc. Edward J. Samorajczyk, Esq., Robinson & Cole, LLP Namita T. Shah, Esq., Day Pitney, LLP Eric P. Taylor, Esq., Harris Beach PLLC Christopher Valentino, Vice President, Lamont Financial Services Corp. Jane Warren, Esq., McCarter & English, LLP Noreen P. White, Co-President, Acacia Financial John D. Yarbrough, Jr., Esq., Carmody & Torrance, LLP INTRODUCTIONS Ms. Rubin introduced two guests attending the board meeting today: Mr. Fleury, President & CEO and Mr. Gruner, Vice President of Programs, from the Connecticut Science Center. Mr. Asher introduced three additional guests: Mr. Bowes, Ms. Clark and Mr. Epstein from Connecticut State Colleges and Universities (ConnSCU). MINUTES Ms. Rubin requested a motion for approval of the minutes of the September 19, 2012 Meeting of the Board of Directors. Dr. Lopez moved for approval of the minutes, which was seconded by Mr. Cohn. John Biancamano None Robert S. Dakers Final Board Meeting Minutes 2

3 PRESENTATION: CHEFA FUNDING TO CONNECTICUT SCIENCE CENTER Mr. Fleury thanked the Board of Directors for the funds granted to the Connecticut Science Center over the past three years and turned the floor over to Mr. Gruner. Mr. Gruner reported on the Science Center s goals, their primary audience and statistics on the participation and use of the educational programs sponsored by the Connecticut Science Center. In summary, Mr. Fleury spoke about the Connecticut Science Center s future sustainability and the importance of genomics career awareness. Ms. Rubin thanked Mr. Fleury and Mr. Gruner for attending the board meeting and reporting on the Connecticut Science Center s accomplishments. CURRENT AND PENDING BOND ISSUES Financing Forecast Ms. MacDonald reported that there are two new issues on the financing forecast: A Norwalk Hospital private placement issue for approximately $82 million to construct a new patient pavilion and Yale-New Haven Hospital is planning to finance the acquisition of the Hospital of Saint Raphael, both which will be presented for approval in November. Summary of Financings Ms. MacDonald reported that the Authority closed two issues in September: the Gunnery School Issue, Series B, which was a private placement with Peoples United Bank for approximately $8.8 million and Connecticut Children s Medical Center closed the second tranche of its EasyLoan for $8.8 million for energy projects at their location. Ms. MacDonald added that there will be a new EasyLoan for the Wadsworth Atheneum for approximately $4 million for a number of energy projects which is expected to close in December. Interest Rate and Market Update Ms. Peoples reported on recent market activity, money market rates, economic indices and yield curve trends. Municipal Market Activity Ms. Weldon presented her report on municipal market activity. Final Board Meeting Minutes 3

4 PRELIMINARY STAFF MEMO Yale-New Haven Hospital Issue, Series N & O Mr. Morris presented the Yale-New Haven Hospital Issue, Series N & O. Proceeds from the Series N & O bonds ($100 million) will be used to refinance a portion of the Hospital s line of credit, which was used in connection with the $160 million asset acquisition of Hospital of Saint Raphael. Mr. Morris reported that approximately $100 million qualifies for tax-exempt financing but a final determination will be made by bond counsel. Of the $100 million tax-exempt bonds, $50 million will be fixed-rate bonds issued on their own credit and $50 million will be for variable rate bonds. The balance of $60 million will be taxable fixed-rate bonds to be issued directly by Yale-New Haven Hospital. Mr. Morris added that the Hospital has a $32 million project in North Haven that will be financed with taxable fixed-rate bonds and a $40 million commercial bank loan that will be refinanced with taxable variable rate bonds. Mr. Morris stated that in total, the Hospital will issue $192 million of additional debt. The Hospital is currently rated A+ by Standard and Poor s and Aa3 by Moody s. Both ratings are expected to be affirmed for the Series N & O bond issue. Security for the Series N & O issues will be the same as with the Series M bonds, with a gross receipts pledge and a negative pledge on assets. There will not be a debt service reserve fund. Mr. Morris provided an overview of the financial operations at both Yale-New Haven and Hospital of Saint Raphael, providing operating results ratios, pro forma ratios and balance sheet metrics. Both inpatient and outpatient utilization trends were also provided for both institutions. FINAL STAFF MEMOS Connecticut State University System Issue, Series M Mr. Asher pointed out that the Authority is proceeding to move forward with this bond issue. The Authority met with the Connecticut State University System Finance and Administration Committee last week and they approved the bond issue. This issue will be going to the Board of Regents for Higher Education tomorrow and the Authority expects this bond issue to be approved for financing. Mr. Asher added that staff s request today is contingent upon the Board of Regents approval; but in addition to that, satisfactory presentation to the Secretary of the Office of Policy & Management and the Treasurer s Office on the sufficiency of the revenues to meet the debt service commitment of the bond issue. Mr. Asher pointed out that, to date, all the information the Authority received from CSU on this bond issue indicates that they have sufficient revenues to be able to cover the debt service on the bonds that will be outstanding. Mr. Morris stated that with Mr. Bill Bowes coming into the System, it has been a seamless transition in handling the projects or requisitions since the former Director of Capital Budgeting left. Mr. Morris reported that, in July, this issue was presented and there were two questions regarding the refinancing of the new residence hall at Central. (1) Cost of the Project The System responded that the Department of Construction Services oversees the project and the Final Board Meeting Minutes 4

5 estimate was confirmed by the architect. They received three bids which averaged approximately $70 million for construction, with a total cost of $81.85 million. (2) Percent of Student Body House on Campus Twenty-five percent of the student body is housed on campus. Upon completion of the new residence hall, there will be some beds taken offline for renovations, so there will be approximately 30% of the students that will be housed on campus. Mr. Morris reviewed the revenue sources for the payment of debt service noting that for the residence halls and the parking garage, 80% of the debt service will be funded by respective fees, residence hall fees and parking garage fees and 20% will be funded by the University fee. The University fee revenue is going to be used to pay debt service on all the other auxiliary projects. Mr. Morris reported that total enrollment is down from the Fall 2010 but still remains strong at approximately 35,000. He added that CSU s audit is not complete for FY 2012 but they forecasted a slight surplus on a cash basis. Mr. Morris pointed out that the Treasurer s Office requested that additional language be included in the CSU Board resolution stating that sufficient management structure is in place to administer the project and that OPM may require some additional assurances from CSU. Further discussion ensued. Ms. Rubin introduced Resolution # , Connecticut State University System Issue, Series M, authorizing, which resolution was included in the materials distributed to the Board. Mr. Dakers moved for adoption of Resolution # , subject to the approval of the Board of Regents for Higher Education of the financing. Dr. Lopez seconded his motion. All were in favor. Final Board Meeting Minutes 5

6 Taft School Issue, Series I Mr. Morris presented the Taft School, Series I, for a refunding of the Series H bonds for $8.5 million and $8.0 million of new money, for a total of $16.5 million. The School has decided to leave the Series E bonds for $12 million outstanding. Mr. Morris reported that the School has identified approximately $17 million in new projects and projects not financed with the Series I issue will be funded by the School s capital campaign proceeds. Mr. Morris reviewed the structure and security of the bond transaction as reported previously. Mr. Morris reiterated that the School s student demand is impressive. The School anticipates an increase in its application pool for Fall Mr. Morris reviewed FY 2012 financial results noting an operating surplus but a slight decline in cash and investments. Mr. Morris reported the School s capital campaign goal is for $150 million and so far, they have raised $95 million, of which, 30% has come from their Board. Ms. Rubin introduced Resolution # , Taft School Issue, Series I, authorizing, which resolution was included in the materials distributed to the Board. Mr. Colangelo moved for adoption of Resolution # , which was seconded by Mr. Pollard. University of Bridgeport Issue, Series D Mr. Morris presented the University of Bridgeport Issue, Series D, a $12 million private placement variable rate transaction with RBS Citizens Bank. The proceeds will be used to finance capital expenditure projects identified in the University s capital improvement plan. Mr. Morris reported that the University has identified over $25 million in capital expenditure projects as part of its campus-wide capital improvement plan. Projects include renovations to its academic buildings, residence halls, library, gymnasium and student center, as well as various campus site improvements. Mr. Morris reviewed the financing structure and security for the transaction and stated that the financial covenants are the same as with Series C, with the exception of increasing the leverage Final Board Meeting Minutes 6

7 coverage of total debt to net assets test. Mr. Morris stated that staff is seeking approval of this transaction as a conduit issuer. Ms. Rubin introduced Resolution # , University of Bridgeport, Series D, authorizing, which resolution was included in the materials distributed to the Board. Mr. Cohn moved for adoption of Resolution # , which was seconded by Mr. Pollard. EasyLoan Authorization to Increase Aggregate Approval Amount Ms. MacDonald reviewed the existing guidelines on the easyloan authorizations and proposed to increase the aggregate amount of authorization from $75 million to $100 million on the outstanding balance of the loans. In addition, staff sought approval to change the Authority s fee structure for non-chefa institutions seeking financing. Further discussion ensued. The Board members agreed to table the discussion to change the fee structure to the November Board meeting. Ms. Rubin introduced Resolution # , authorizing the elimination of the cap on the Competitive Secured Loan Equipment Financing Program aggregate approval amounts, subject to monthly reporting on the outstanding balances. Mr. Biancamano moved for adoption of Resolution # , which was seconded by Mr. Cohn. Final Board Meeting Minutes 7

8 CHEFA FINANCIAL OPERATIONS August 2012 Financial Statements Ms. Mackewicz provided a summary of the financial report for the two months ending August 31, Revenues exceeded expenses by approximately $682,000 before program related expenses and approximately $649,000 after program related expenses. Revenues were over budget by approximately $101,000 primarily due to the reallocation of the CRT client grant. Expenses were under budget by approximately $40,000 and there were no notable items for August. REVIEW OF FY STRATEGIC BUSINESS PLAN Mr. Asher provided a review of the FY Strategic Business Plan previously submitted to the Board. Mr. Asher summarized the accomplishments for each of the following categories: Credit Policy Changes for the Underwriting Guidelines and Debt Service Reserve Fund Requirements Client Survey CHESLA Consolidation Direct Placement Bank Loans Board Recruiting and Development Grant Programs Mr. Asher reviewed the Authority s accomplishments over the past three years as detailed in Exhibit A of his memo for each of the Core Goals. Further discussion ensued. Ms. Rubin congratulated the staff of the Authority on its accomplishments over the last three years and thanked Mr. Asher for his presentation. REVIEW OF FY DRAFT STRATEGIC BUSINESS PLAN Mr. Asher provided an overview of the draft Strategic Business Plan s core goals. In summary, Mr. Asher stated that the Authority plans to continue to focus on: Superior client service Tracking and responding to municipal market developments Transition planning/business continuity CHESLA Consolidation EasyLoan program marketing Early childhood education facility construction program Client education Final Board Meeting Minutes 8

9 Board education and recruitment Grant program development Mr. Asher then reviewed the specific targeted initiatives for the next three years. Further discussion ensued. Ms. Rubin suggested that at the next board meeting, the Board review specific measurements that may be feasible for initiatives detailed in this plan. The remaining board members concurred. CHEFA OFFICE LEASE APPROVAL Mr. Asher requested approval from the Board to renew the office lease at 10 Columbus Boulevard for a six-year, three month term commencing on October 1, 2012 and expiring on December 31, The Authority s current lease of 11,222 square feet expires on July 31, 2013 at a cost of $26.00 per square foot. The new base rate will be $19.50 per square foot effective October 1, 2012, increasing by $.50 per square foot for each year with a rate of $22.00 in The landlord has also included a tenant improvement allowance of a not-to-exceed amount of $16.50 per rentable square foot. The savings for the first 12-month period, based on a reduction in the cost per square foot of $6.50, is $72,943. Mr. Colangelo moved to approve the office lease extension for six years and three months at the terms discussed at today s meeting. Dr. Lopez seconded his motion. COMMITTEE REPORTS Consultant Committee Report Mr. Colangelo reported that staff recommended A. C. Advisory, Inc., Acacia Financial Group and Fairmount Capital Advisors to provide financial advisory services for the Authority for a period not to exceed three years. Staff also recommended retaining Public Financial Management as Final Board Meeting Minutes 9

10 Financial Advisor for the Connecticut State University System s bond offerings and other financial advisory services on an as needed basis. Mr. Cohn moved to approve staff s recommendations for financial advisory services. Mr. Pollard seconded his motion. Mr. Colangelo also reported that staff recommended Carmody & Torrance LLP, McCarter & English LLP, and Shipman & Goodwin LLP to provide special counsel services for the Authority for a period not to exceed three years. Mr. Pollard moved to approve staff s recommendations for special counsel services. Mr. Lisi seconded his motion. Human Resources Committee Report Mr. Biancamano reported that the Committee had nothing to report today. Final Board Meeting Minutes 10

11 EXECUTIVE DIRECTOR S REPORT Mr. Asher did not have any additional items to report. OTHER BUSINESS Ms. Rubin pointed out that the 2013 board meeting schedule was included in the board package. There being no further business, at 3:11 p.m., Mr. Dakers moved to adjourn and Mr. Cohn seconded his motion. Respectfully submitted, Jeffrey A. Asher Executive Director Final Board Meeting Minutes 11