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Home My WebLink About2004-05-10 04-138 ORDERItem No. 04-193 Date: Mn 10, 2004 Item/Subject ORDER, Authorizing the City Manager Exawte Third Amendment to Master Transaction Agreement with Bangor Nursing and Rehabilitation Center Responsible Department: Legal Until December 31, 2000, the City operated the Bangor Nursing Facility, a 61 -bed skilktl nursing home. The Ory -owned operation required at limes significant operating subsldlee to cover its operating expenses. The Cry Council expended considerable time detenmining hose to best operate a fadlLy dthis type. Through Meir eRorts, it as detemnred that in Me constantly changing healMrare erwrunm nL Me facility would operate best as an independent ran -prof[ entry. To that end, Me ipnc rNursing & Rehaldmithm Career(BNRC) was created. As Me operations, employees, assets an. of Me raw army were entirely Cityownedand operated, a Master Transualon Agreement (MTA) was executed MM identf d eaM parties respmsibili[les for Me new endly. The Cry provided a line of credit in the amount of $900,000 that was set to expire on lune 30, 2005, and the City allowed! 5er repayment of accounts receivable owed as of December 31, 2000, subsequently seaward! by BNRC over time. The centnued financial pressure of the Medi®lo system, reductions M Medicare and Me return of the State's gross receipts tax on nursing home reaenues, have not allowed BNRC ro perform as originally predicted. Based upon the aferwnentaned, many nursing homes in Me State have dosed Man doors. In oder to allow the necessary time fa complete Me plannel rerenue base Lamrsifiraton and physiml plant renovations, the BNRC has requested Me attached amendments to the MTA. This Order will authorize an amendment M the Master Transaction Agreement M extend the Ilse d credit W June 30, 2009 and delay the repayment of accounts receivable m begin m 2009. ��n/ p�� _�� 11 Department Head Manager's Comments: /'wW 6y,taLyLLiay a.,•p 4z �x,sgs.�a.r�.s��'%hA F'irarwr /4+n,M�Lu City Manager Associated In/ormathln: Third Amendment M Master Trammel Agreement Finance Director Legal Approval: dry Solicitor passage _ First Reading Rage 1 of 6 Referral lwignedb Councilor Allen May 10, 2004 CITY OF BANGOR (T E.) ORDER, Authorizing the City Manager to Execute Third Amendment to MasterT iarmcdon Agreementwith Bangor Nursing and Rehabilitation Career WHEREAS, the City of Bangor and the Bangor Nursing and Rehabilitation Center executed a Master Transaction Agreement in December 2000; and WHEREAS, said Agreement provided for a line of credit from the City of Bangor to the Bangor Nursing and Rehabilitation Center with an expiration date of June 30, 2005; and WHEREAS, said Agreement provided for repayment to the City of Bangor of accounts receivable owed as of December 31, 2000 subsequently collected by the Bangor Nursing and Rehabilitation Center; and WHEREAS, continued financial pressure on the Medicaid system, reductions in Medicare, and the reinstatment of the State's gross recelpts tax on nursing home revenues require a planned revenue base dvversi ic0don by the Bangor Nursing and Rehabilitation Center and a need for a change in the expiration data of the line of credit and repayment schedule of the accounts receivable collected. Now, Therefore, be it Ordered by the City Council of the City of Bangor THAT the City Manager is hereby authorized and directed to execute a Third Amendment to the Master Transaction Agreement with the Bangor Nursing and Rehabilitation Center. IR CITT COUNCIL Nay 10, 2006 Hutton Made avd Seconded for ?"Sage PCTCMR V TT # M-138 ORDER (TITLE,) Rutnori=iag the city Manager to Execute es transaction Agreement vitt Consent Nuraini; and Rehabilitation Assigned to Councilor 60Y A THIRD AMENDMENT TO MASTER TRANSACTION AGREEMENT Agreement made this_ day of 2004 by and between the City of Bangor, a body politic and corporate organized and existing under and by virtue of the laws of the Sate of Maine, in Bangor, Penobscot County, Maine flummrsafter Rhe City") and the Bangor Nursing and Rehabilitation Center, a non-profit corporation duly organized and existing order the laws of the State of Maine coatis a place of business in Bangor, Penobscot County, Maine (bene rafter BNRC). WHEREAS, the parties executed a Master Transaction Agreement dated December 28,2000; and WHEREAS on March 29, 2002 the parties amended the Master Transaction Agreement; and WHEREAS, on July 23, 2002 Ne parties amended the Master Transection Agreement a second time; and WHEREAS, the BNRC would like to amend some of the financial provisions in the Master Transaction Agreement as previously amended. NOW THEREFORE, the patties agree to amend the Master Transaction Agreement, as amended, as follows: _ By deleting the following: 6. CITY LOAN/LINE OF CREDIT a. The City shall provide BNRC with a line of credit for liquidity purposes subject to the following conditions: 1. The amount of the line of credit shall not exceed $400,000. 2. The amount available under the line of credit shall be reduced at the end of each fiscal year beginning want the fiscal year ending June, 2002 and on June 30 of each year ntereafter by the amount of one-half or BNRC's cash net Flow. The amount shall be determined within ninety (90) days after the end of the fiscal Year. 3. The term of the line of credit shall end on June 30, 2005 or in the event he accumulated cash surplus of BNRC equals $400,000, wbichever event occurs first 04-138 4. Repayment of said line of credit sball be as provided for therein. And by replacing it with the following: 6. C=LOAN/LINE OF CREDIT a. The City shall provide BNRC with a line of credit for liquidity purposes subject to the following conditions: 1. The amount of the line of credit shall not exceed $400,000. 2. The amount available under the line of credit shall not be reduced. 3. The term of the line of credit shall end on June 30, 2009. 4. Repayment of said line of credit shall be as provided for herein. By deleting the following: ]: FINAL SETTLEMENT OF ACCOUNTS a. On June 30, 2001 the City shall provide a final statement for settling of accounts by compiling the closing balance sheet for the Bmgm City Nursing Facility as of December 31, 2000. Included will be an adjustmemt to accounts receivable to reflect receivables collected between January 1, 2001 and Jure 30, 2001 for money due the Bangor City Nursing Facility for services rendered before December 31, 2000. b. The City will pay any accounts payable and accrued operating expenses incurred before December 31, 2000, but not payable until after said date. c. The City will reduce any incremental amounts due to the General Fund from the Bangor City Nureimg Facility for the period of June 30, 2000 through December 31, 2000 by the said accounts receivable collected between January, 1, 2001 and Jume 30, 2001. If the accounts receivable collected are insuffcient to offset the said amount due the General Fund, trader such time frame mutually agreeable by the parties, BNRC shall pay any balance due to the City. d. The accounts receivable due the City and collected by BNRC, in the amount of $290,414.76, shall be paid m the City by BNRC, with no interest, in the following mama: one-fourth of the amount due upon the execution of this amendment and onofourrh due on June 30 of each of the next three successive years beginning June 30, 2003. 06-138 And replacing it with the following: 7. FINAL SETTLEMENT OF ACCOUNTS a. On lune 30, 2001 the City And provide a final statement for settling ofacoounts by compiling the closing balance sheet for the Bangor City Nursing Facility as of December 31, 2000. Included will be an adjustment to accounts receivable to reflect receivables collected between January I, 2001 and Jme 30, 2001 for money due the Bangor City Nursing Facility for services rendered before December 31, 2000. It. The City will pay any accounts payable and accrued operating expenses incurred before December 31, 2000, but not payable will after said date. c. The City will reduce any incremental amounts due an, the General Fund from the Bangor City Nursing Facility for the period of June 30, 2000 througb December 31, 20M by the said accounts receivable collected between January 1, 2001 and June 30, 2001. If the accounts receivable collected are uvsufficient to offset the said amount due the General Fund, under such dme frame mutually agreeable by the parties, BNRC shall pay any balance due to the City. d. The remaining balance of the accounts receivable due the City and collected by BNRC, in the amount of$217,811.07 shall be paid to the City by BNRC, with no interest, in the following manner. one-third of the amount due on June 30, 2009 and one third due on June 30 of each of the next two successive years beginning June 30, 2010. In all other respects the Master Transaction Agreement, as amended, shall remain in full force and effect. M WITNESS WHEREOF, the par0es hereto have caused this Mester Transaction Agreement m be executed on this _ day of 2004. Witness CITY OF BANGOR Edward A. Barrett City Manager Witness BANGOR NURSING AND REHABILITATION CENTER G. Clifton Eames President STATE OF MAINE PENOBSCOT, ss 2004 Then personally appeared the above-named Pinard A. Barrett, City Manager for the City of Bangor, and acknowledged the foregoing instrument to be his free act and deed in his said capacity and the free set and deed of the said City of Bangor. Before me, Notary Public/Attorney-at-Lew Name: Commission expires: STATE OF MAINE PENOBSCOT, ss 2004 Then personally appeared the above-named G. Clifton Eamee, President of Bangor Nursing and Rehabilitation Center, and acknowledged the foregoing iretroment to be his fres net and deed in his said capacity and the free act and deed of the said Bangor Nursing and Rehabilitation Center. Before me, Notary Publir/Atmmey-m-Law Name: Commission ¢'.spires: