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:
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1_IAf France Diretloi
Introduced for
,ocPasage
_ first Reading Page _ of_
Referral
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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,
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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.
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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.
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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,
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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:
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