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HomeMy WebLinkAbout2000-12-27 01-80 ORDERItem N0`1-90 Date: 12-27-00 Item/Subject: ORDER Authorizing Execution of Master Transaction Agreement—Bangor Nursing and rehabilitation Center Responsible Department: Legal By Council Order 99-165 the City Council directed the a non-profit corporation be created to awn, manage and operate the Bangor Qty Nursing Facility. The Bangor Nursing and Rehabilkation Center (BNRQ was created. By Council Order 00-329 the Qty Council established guiding principles and factors for the conversion of the facility from the City to BNRC control and these formed the basis of the attached Master Transaction Agreement. The France Committee has reviewed the agreement and, with some changes discussed at the committee, recommends approval. Deproment Head r r 1. . t, ,t City Manager eutlget Approval: //II� 1_IAf France Diretloi Introduced for ,ocPasage _ first Reading Page _ of_ Referral W Assigned W Councilor PaLaer December v, 2000 CITY OF BANGOR (ttiLE.) Order, Authorizing the City Manager to Execute a Master Transaction Agreement with Bangor Nursing and Rehabilitation Center By ft ay Mindy of the Ory ofAnvo: V/HERFAS, Me ary d1burac ris tleowmrand c9maM oftle Bangor City Nursing Faciliryi eM WNEnEp , aw Boater City Council has delemiinel mat it is in Me best moment oftM City ofBangorm mdnminc meson at de Boagor City Nursing Faulity;and W10tPA$ GuocY ONa 99.165 dit¢hdthe establishment of wrvprolkmtyndoo bows, menage and operam ds facility W thederelopmmt of such contracts and bdween as City and this furymaUoo to provide for in wodouing operation; wed �S, the Bettor Nurning and P.eWbilitidm coats wu uroted for de pmpxe ofarquiring, instant aM operedeg de Baum Clry Nursieg Facilib: end �S, Cowed Order 00.3" istabtided guiding priosTles and floors whidi sw i s this overall intim of de pertim egaNing the conversion process and said docmewt wu medu a Luis for derision mekmg m ds development of de M ssw 7frwrmrm AgreaoerK aid WHBP.EAS, do Parra love reached an wdemmding of tle vanow enter and coodrma, resulting m in Assessment, oammonly efurtd m m tie Mmer Trwaactiw Agreement. NOW, THEREFORE, it is ORDERED du: the City Mwger is swflto , m bNeVofthe City ofBangor, b uxuk a MUM Trommoroo Agrcemmt wid BmgorNure'ug end RehabJimtion Cmta. The Agremreo[ehall [e wefioal foam as ygmvM by deoReeofde cm soueimr and m a foam suhamnddty err mmebed herete IN CITY COUNCIL December 22. 2000 Motion for Passage Node and Seconded Jim Tyler. Meober of the Mard of Directors, gave detail& regarding the organizations Of this Corporation Passed 0 T CLERK q 01-00 (TITLE,) Authorizing the City Maozeer to Execute a Master Transaction Agremeat with Mango[ Norsing avd Rehabilitation Assigned to Councilor 01— MASTER TRANSACTION AGREEMENT Agreement made tbis�-F l4day ofDxzmber 2000 by and between the City of Bangor, a body politic and corp'ved orate mganand existing under and by virtue of the laws of the Stare of Maine, in Bangor, Penobscot Cooay, Maine (hoo inaRat,he City's and the Bangor Nursing and Rehabilitation Center, a non-profit corporation duly organized "existing Under the laws of State of Maine with a place of business in Bangor, Penobscot County, Maine (hereinafter BNRC). WHEREAS, the City Of Bangor is the owner and operator of the Bangor City Nursing Facility; and WHEREAS, the Bangor City Council has determined that it is in the best interest of the City of Bangor On maintain operation at the Bangor City Nursing Facility; and WHEREAS, Council Order 99-165 directed the establishment of non-profit corporation to own, manage and operate the facility and the development of such contracts and agreements between the City and the Corporation to provide for its continuing operation; and WHEREAS, the Bangor Nosing and Rehabilitation Center was created for the Propose of acquiring, averaging and upending the Bangor City Nursing Facility; and WHEREAS, Council Order W-329 established guiding principles and factors which state the overall intent of the parties regarding the conversion process and said document was used as a basis for decision malting in the development of the Master Transaction Agreement; and WHEREAS, the City and Bangor Nursing and Rehabilitation Center have agreed to a transaction time and date of 12:00 midright, December 31, 2000; and WHEREAS, the Bangor Nursing and Rehabilitation Center needs certain financial support and ad= consideration from the City of Bangor in order to operate after December31, 2000. NOW, THEREFORE, the Parties agree as follow I. EXISTING OBLIGATIONS a. The City agrees On assume the Bangor City Nosing Facility porion of the City's Maine Stale Retiremem System Initial Unpooled Unfunded Actuarial Liability. b. The City agrees to assmne the CorcodY outstanding general obligation debt on the Bangor City Nursing Facility Bond issues R! 2. EMPLOYEE BENEFITS a The City shell extend the opporputity, for BNRC to participate in the City's group health insurance program. b. The City shall extend the opportunityfor BNRC to participate in the City's group dental insurance program. 3. PERSONAL PROPERTY a The City shall monster all personal property assets of the Bangor City Nursing Facility to BNRC. Said personalproperty shall inert to the City a no cost to the City in the event that BNRC should cease operation of a nursing and rehabilitation facility. 4. REAL ESTATE a. BNRC shall have the Option to purchase the Bangor City Nursing Facility real estate located on Texas Avenue, Bangor from the City for$ 1.00. The said facility shall revert m the City az no cost to the City if BNRC ceases operation of nursing and rehabilitation facility or if BNRC otherwise vacates the building. b. The City shall grant BNRC an option to acquire the Naval Reserve Center on Besot Street, Bangor 9 an cost to BNRC in the event BNRC demes to relocate its nursing and rehabilitation facility to that location. Said option shall expne on March 31, 2002. In the event BNRC exercises said option, it stall vacate the facility at Texas Avenue, Bangor and shall convey the said facility to the City at no cost to the City. Said conveyance to the City shall be within twelve (12) months afler BNRC exercises the option to aniuhe the Naval Reserve Caner. c. In the event BNRC acquires the Naval Reserve Center reel cum pmsamn to the tams of this agreement and cele es ope mon of a nursing and rehabilitation facility before December 31, 2005 title to the land comprising the Naval Reserve Center real estate shall revert to the City. The City has the option, a that time, to purchase the buildings constructed Hereon by BNRC for the initial capitalized costs of the buildings, depreciated on a straight line basis fora thirty, (30) year term less any amomt due the City for its $2.25 million contribution described below. In midi!ion, mthe event BNRC Oman operation of nursing and rehabilitation facility before December 31, 2005, the City shelf have the option, at that time, to acquire the personal property in the facility at its depreciated value as determined by the Medicaid Cost Report m that time, less any amount due the City for its original contribution for said personal property. Provided, however, that in the event BNRC sells the property to a similar entity, for a similar purpose, title to the land does Out revert to the City and the City does Out have the option to acquire the buildings or personal property. In said event, 01-80 BNRC shall pay m the City the balance due the City for its $2.25 million contribution described below. It is further agreed, however, that in the event BNRC sells the property fm the express purpose of constructing and operating number nursing and rehabilitation facility, title to the land comprising the Naval Reserve Center real estate shall reventobe City. The Cityhmtheoptiogatbattim topmcbasethebuild'rags constructed thereon by BNRC for four market value less the balance due the City for its $2.25 million contribution described below. In the event BNRC acquires the Naval Reserve Center real carom paramour In the terms of this agreement; the City shall pay the cost of gemadmical investigation of the site upon which the building is to be located and any other demolition and site preparation costs of the Naval Reserve Canter property shall he funded from the $2.25 million contribution from the City described below. Should the demolition and site preparation costs exceed $150,000, then the parties agree to meet and discuss alternatives for funding additional demolition and site Preparation vests. Depending upon the overall scope and costs of demolition and site preparation, the parties further agree that other site options may be considered. 5. CTTYFBVANCIAL CONTRIBUTION a The City shall assume responsibility bar requited capital improvements to the existing Bangor City Nursing Facility located in Texas Avenue, Bangor as identified by Carpenter and Associates in the amount of $2.25 million. In the alternative, in the event BNRC exercises its option to acquire the Naval Reserve Center and relocate the among and rehabilitation facility as described in section 4, above, the City shall provide the said $225 million for the construction of new facility, and demolition and site preparation as described in motion 4, above. Provided, however, then any necessary facility capital improvements m the Bangor City Nursing Facility incurred prior b the construction and operation of cew nursing and rehabilitation facility at the Naval Reserve Center shall be deduckd from the said $2.25 million City contribution. 6. CITY LOAN / LME OF CREDIT a. The City shall provide BNRC with a line ofcredit 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 eM of each final year by the amount of one-half of BNRC's net cash flow. oo-gn 3. Thetermofdielineofemditshalle wthecompletionofthe BNRC,s fourth fiscal year or in the event the accumulated cash surplus ofBNRC equals $400,000, whichever event occurs fust 4. Repayment of said line of credit shall be as provided for therein. 2 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 fm the Banger City Nursing Facility as of December 31, 2000. Included will be an adjugment to accounts receivable to reflect receivables collected between January 1, 2001 and June 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 opemtivg expenses incurred before December 31, 2000, but not payable until atter said date. o. The City will reduce any incremental amounts due in the General Fund from the Bangor City Nursing Facility for the period of lune 30, 2000 through December 31, 2000 by the said accounts receivable collected between January 1, 2001 and June 30, 2001. If the accounts receivable colleerced are insufficient to offset the said amount due the General Fond, under such time frame mutually agreeable by the Parties, BNRC shall pay any balance due to the City. S. ANNUAL CITY FINANCIALSUPPORT a. BNRC may request from the City supplemental diamond support fix its operation. b. The City shag consider the grafting of said request if, during the succeeding and prospective twelve (12) mon&period, BNRC personnel costs, net of health insurance and workers compensation maamace eepeoses, do not exceed sevenry- five percent (75%) of the foal operating costs and: 1. During the previous fiscal year ofoperetion, occupancy levels ed the facility have been below the breakeven point, so-called, as defined by a calculation to be made m the beginning of each BNRC fiscal year by BNRC, with the assistance of and confirmation by the City, or 2. Increases in the cwrs of food, insurance, supplies and/or milifies exceed an amount expected by using generally rewgat ed inflationary projections, or 3. Unforeseen circumstances arise which are beyond the control of BNRC that may make financial support appropriate. 01-80 9. MISCELLANEOUS a Upon the termination of the line ofcredit, one half of the annual net cash Flow of BNRC shall be used to repay the City the casts associated with the $2.25 million City capital contribution described in paragraph 5, above. b. The City shall fund the accrued time of current Bangor Nursing Facility employees for vacation, compevsmory, sick leave bonus time and holiday time as ofDmember 31, 2000 w The City and BNRC shall enter into a lease for space currently =red by the City for its Health and Welfare Depanment (General Assistance, public Health Nursing and Children's Dented Clinic) and various Grant programs (WIC, Immmdration and STD). Under said lease, the following terms and conditions shall apply: 1. Rent currently paid by the non -general food Grant programs t Bangor City Nursing Facility will continue to be paid t BNRC so long as those Programs are located in the BNRC boildin& 2. Read correctly paid by the Health and Welfare Department to Bangor City Nursing Facility will cease on December 31, 2000 and will not he paid t BNRC subsequent he this date. The mom equal to said payment will be used to defray the costs of the capital projects or facility caldwsmead represenmd by the above referenced $2.25 million for such period of time as the Health and Welfare Department would have otherwise foes paying rem an BNRC. 3. Suchod=te andconditiomwwhichthepardmagrae. d. BNRC shall have the right to participate with the City injoint purchasing efforts when mutually beneficial to both parties as determined by the City. e. The City shell transfer to BNRC any and tiff of the City's Trust and Agency Accounts relating to the Bangor Nursing Facility. E The City agrees m Provide BNRC any and all documents, reports, assessments nud studies related In the Naval Reserve Center property and buildings thereon on Essex Sheet and the Bangor City Nursing Facility located m 103 Texas Avenue. & The City agrees to provide BNRC with any documents, materials, records or dam, either electronically or in hard copy, relating an the ongoing varum of the Casuarina which may be required following the conversion dam offanuary I, 2001, Ol- IN WITNESS WHEREOP, the�arties hereto have caused this Master Transaction Agreemanm be executed on this zs dayofDecember2000. Witness Witness STATE OF MAINE PENOBSCOT,m CITY OF BANGOR REHABILITATION CENTER P"T Decanber 28 , 2000 Tb® personally appeared the above-named Edward A. BanrM City Manager for the City of Bangor, and acknowledged the foregoing instrument t0 be his free en and deed in his said capacity and the free act and dad of the said City of Bangor. Before me, /loudy PdbficlAuo0ey-at-Law Name: Commission evires: NONNAN S. HERNANN, IA NOTARY PUBLIC, NNNE 0 WUNISRON EXPR6.UNUARY Asset STATE OF WtINE PENOBSCOT, as December , 2000 Then personally appeared the above-named James Tyler, President of Bangor Nursing and Rehabilitation Center, and acknowledged the foregoing ivsmmrent to be his free act and deed in his said capacity and the free act and deed of the said Bangs Nursing and Rehabilitation Center. Before me, Notary Public/AWmey-at-Law Name: Commission expires: 01-80