Good evening, everybody. I'm CHAIRMAN Jared Evans. We're going to begin tonight this operations committee meeting and will begin with introductions for my colleague Simon. Thank you, MR. CHAIRMAN Mike Deal District. 24. Thank you. MISTER CHAIRMAN just thing District. 21. Thank you, MR. CHAIRMAN Michael Paul Hart District 20. Thank you, MR. Chaired Prime our district. 25. Thank MARCH Aaron Gibson District 8. Thank rally, Brown District 10. Thank you, everybody. And again, I'm CHAIRMAN Jared Evans tonight. We will be hearing proposal. Number 2.13, from the Health and Hospitals Corporation approving the issuance of general obligation, refunding bonds up to 150 million dollars by the Health and Hospitals Corporation in Marion County. The refund certain prior obligations of the health and hospitals corporation that finance a
portion of the Wishon hospital project and pay cost of issuance in connection they're with and improves and authorize other actions. With respect their to appropriation of the profe proceeds thereof that I'm tired Joe, would you like go and again? But your proposal. Thank you, MR. CHAIRMAN members of the committee, my name is Joe Glass and the executive director and general counsel of the Annapolis Pond Bank. I'm joined by James Simpson, who is the interim cfo of the El Corporation. We are here to present proposal to 13 which authorizes refunding bonds an amount not to exceed 150 million for the series to help the hospital. Bonds. There will be a maximum
interest rate of 6.5% in the final maturity would stay the same as the current bonds, which is JANUARY of 2040. So these were for the construction of guy's hospital. There one of a series of for bonds issued in 2010 following the successful 22,009 voter referendum to approve the construction of Eskenazi Hospital. The 2010 are currently about 141 million dollars outstanding. I'm helping out some corporations also looking to least rental bonds that were issued by the Indianapolis Marin County Building Authority. And there's outstanding amount of about 3 20 million for those that lease was approved by the council back in 2010 and are finding is that going to go before the council has been before building authority board and the Health Hospitals
Corporation board. So 2 and b to 2010 bonds what are known as build America. Bonds at these were part of the 2009 American Recovery and Reinvestment Act which was passed in the wake of the financial crisis and basically under this program, municipal issuers can issue a taxable debt but get a subsidy from the federal government. For 35% of the interest cost. However, since 2013, some of those subsidies have been sequestered. And there's been a fixed 5.7% reduction in place since 2021. So federal reimbursements for these bats finds have been delayed. Been delayed and subject to further second sequestration basis. So a lot of municipal issuers have sought to a refund. These bonds in order to create more certainty for debt service
going forward. So the refunding funding of both that they too, and you, too, 2010 bonds would free up about 33.8 million that is currently used to find cash. Debt service reserve. They would lower rental payments for a and the amount of about 2.4, 5 million dollars a year and they would act. They reduce risks and uncertainties related to the Bab subsidy. Here you have information about these 2 series. The first that geo refunding Bonds. What before you today total with both 3 fundings. Helping hospital for corporation would save about 2.4, 5 million dollars annual debt service. So we have our finance team here today. Obviously, James, he representing hhc winds and or bird is Finance Council. Crowe llp is our municipal advisor. Steeple is our lead underwriter and Underwriters Council is is Ice Miller. We
have been this funding has been approved by Health and Hospital as well as the Marion County Building Authority, obviously the foreman tonight and will be seeking for council approval at the next. AUGUST meeting. And we'll also be seeking of Andre approval in AUGUST. We're looking at SEPTEMBER for a price. And with that, I'm happy answer any questions on the committee. Thank you, Joe. Can you some money from Can you explain a little bit more? I want to make sure the public understands what's going on behind the scenes. What has led up you briefly touched on it. But I'd like you guys go more detail. An explanation on what's happening at the federal level and has been happening for some time that has led to us having to come to this part. Sure Good evening. Thank you for the ability to present committee. It's a great question. So in
these bonds were issued in 2009, the understanding was we receive a 35% subsidy payment on these federal taxable bonds. And we have received the majority of that. But Seaquest ration has made Babb subsidy payments less. And so since 2013 we've seen a reduced about subsidy payment. And since there since 2013, it's below its 5.7% less than what we've expected. So what does that mean for health and hospital? We fund approximately half a million more dollars in debt service transfers from our general fund to our debt service to pay for these Ponce. And so that's one of the things with with this refunding. We would get out from. We would eliminate that potential risk of the current half a million. And could it? The percentage
grow larger? That's the unknown. And I'm going through this process with would lock us and and know what our debt service would be through that the maturities Ponce. Madam vp. Thank you, Sir. So just to make this a little simply because you hear refund and for most of us refund mean something different, right? You buy something to story. Get money back. What we're kind of talking and I know this is not the exact thing. We're basically refinancing these at a lower interest rate. So that way we end up paying less over the long term of the bond, correct? Correct. And Yeah, that's exactly right. And usually in these circumstances, we are looking to get interest rate savings and we might realize on that But the main thrust has been, you know, reducing the
uncertainty relate to the Bab subside, as well as freeing up. Cast that is currently used to define the debt service reserve. So there might be some interest savings. But but those 2 things, main reason that we're we're pursuing this now, if something were to happen, the sacristy strict crustacean ends when we get the back pay that we even if if we have refunded the sun on 2 different bond, do we just it's just done or if the government starts pain, that that get the money that we have paid, that they were supposed to We would not get that back. I mean, right now it's it's in It's in law that they will pay us reduced rate. Okay. So it's and so it's not just a practice. It's in La. Okay, and mean that my last question just as somebody who's looked at buying a home right to these are questions we talked. Every financials can step. Does it affect what
would be akin to our credit rating as a city are Jaycees as a is, in fact, a bond rating doesn't affect your credit rating or anything like that in the future. If we need that. Yeah, I don't think we would anticipate any negative impact on our credit rating by pursuing the history findings. Thank you so much. Thank COUNCILMAN. MR. CHAIRMAN and thank you, Director Glass for the presentation joining us tonight. I for not realizing the saving based off of a lower interest rate. You kind of put it layman's terms. How are we saving money by doing this? Because it seems like we're losing federal funding for this. So we're refinancing it. But we're not refinancing it to get a lower rate. So one would think someone would have to backfill the last federal funding for it. So how are we
seeing a cost savings here? So a big part of the savings is that currently the debt service reserve is funded with cash. And so that's, you know, 30 plus million dollars that's sitting in cash and a debt service reserve when we find that will change to a surety. And so that cash will be freed up for health and hospitals corporation. And so that's cast. They would eventually realized at the end of 24 term. But it's something that they can get up front now since the debt services are fully funded by Ok, makes sense. And we refunding the term of the bond at all? No, no. The current term is 24 team. That will stay the same with the refunding. Yeah, I'm just curious who's covering the cost of the restructuring in north that come from. Or is there a cost? Assumes cost so that the cost will be paid
through. The cost of issuance will be paid through that through The refinancing golden. Yeah, correct. Any other questions? Anybody from the audience have an equal questions. I apologize. I of water, I think is what happens when you start getting order and suddenly. The cough up. Any questions from anybody in the audience. Colleagues last opportunity for questions. Just to get some. Well. Thank you, MR. CHAIRMAN, I move that we seem pose. And number 2, 13 to the full Council final adoption. The motion has been moved and seconded, take a vote. All those in favor by saying Aye, all those opposing sign. All right, guys, have it goes move to the full council. What they do? Pass recommendation. Seeing no other business before this as
expect all that water. Seeing no business before this committee. We are adjourned. Everybody MAY go home. Thank you all. The same at the end