Agenda 03/24/2020 Item #16K 2 (Resolution - Industrial Development Authority)03/24/2020
EXECUTIVE SUMMARY
Request by the Collier County Industrial Development Authority for approval of a resolution
authorizing the Authority to issue revenue bonds for facilities at Naples Community Hospital's
Baker (Downtown) and North Naples campuses, and the refunding of certain bonds originally
issued in 2011.
OBJECTIVE: To accomplish the necessary approvals to authorize a proposed revenue bond issue by
the Collier County Industrial Development Authority (the “Authority”) to be used by Naples Community
Hospital, Inc., (“NCH”) for the purpose of providing funds to finance the costs of certain capital
improvements to its healthcare facilities located in Collier County and described below, and to provide
funds to refund all of the outstanding bonds issued by the Authority for NCH in 2011.
CONSIDERATIONS: This transaction involves the issuance of two series of revenue bonds. The
Series 2020 Bond will be in an amount not exceeding $50 million to finance the costs of certain capital
improvements to NCH's healthcare facilities located in Collier County including, without limitation, CT
Scanner upgrades, second and third floor renovations and equipping and outfitting three new
cardiovascular operating suites, a hybrid operating room and general surgical operating room, buildout of
the cardiovascular intensive care unit and the expansion, renovation and equipping of the Emergency
Department and ancillary facilities at the Baker Campus located at 350 7th St. N. and facilities and
equipment improvements including CT Scanner upgrade at the North Naples campus located at 11190
Healthpark Blvd (the "Project").
The Series 2021 Bond, in an amount not to exceed $91 million, is being issued to refund the Authority's
Healthcare Facilities Revenue Bonds Series 2011 (NCH Healthcare System Project) which were issued on
April 14, 2011 (the "Refunded Bonds"). The issuance of the Refunded Bonds was approved by the
Authority on November 16, 2010 and January 24, 2011 respectively, and by the Board of County
Commissioners by Resolutions 2010-235 and 2011-16 adopted December 10, 2010 and January 25, 2011
respectively, (copies attached). The Refunded Bonds were originally issued to finance the costs of
constructing and equipping facilities, including patient rooms on the 5th and 6th floors at the North Naples
campus along with other renovations and equipment upgrades, and the Naples Heart Institute and other
facility renovations and equipment upgrades at the Downtown campus and also the refunding of two older
bond issues done by the City of Naples in 1993 and 1996.
The Internal Revenue Code requires that the issuing authority hold an advertised public hearing on the
nature and location of the project and the issuance of the bonds. This hearing was advertised in the
Naples Daily News on March 12, and a copy of the notice, in the form and time frame required by the
Code, is attached as Exhibit A to the Authority Resolution, as described below. The hearing was held by
the Authority on March 23. At the hearing, the Authority considered the application and other documents
presented by NCH, heard presentations by agents and representatives of NCH, and opened the hearing to
comments, either oral or written, by members of the public. There were no comments in opposition to
the project or the bonds.
At the conclusion of the hearing, the Authority adopted a resolution approving the bonds, and directed
appropriate officers of the Authority to seek approval of the issuance of the Bonds by the Board of
County Commissioners, as is required by the Code. A copy of the resolution adopted by the Authority
(the "Authority Resolution") is attached as Exhibit A to the County Resolution, as described below.
As stated above, the Code requires that bonds of this type be approved by the local elected representative,
which, in the case of Collier County, is the Board. This approval is signified by the adoption of a
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resolution (the "County Resolution") approving the issuance of the bonds by the Authority.
As are all revenue bonds of this type, these bonds are based on revenues of the project and are not
obligations of the County. There is no pledge of any taxes, nor a pledge of any revenues except the
revenues of NCH. Neither the County, the Board, the Authority, nor any officer of the County is liable
for their payment. Further, the Resolution expressly provides that this approval by the Board does not
abrogate any County, including land use regulations.
The Board’s role in approval of financing authority bond issues
Unlike County bonds, which are issued for public projects, the County-created financing authorities
(Industrial Development, Housing Finance, Health Facilities, and Educational Facilities Authorities) issue
private activity bonds, which are bonds issued on behalf of a private user for a legislatively declared
public purpose such as healthcare facilities, private educational facilities, manufacturing facilities,
low/moderate income housing facilities, pollution control facilities, etc.
The Internal Revenue Code ("Code") requires two types of approval for the issuance of private activity
bonds: Issuer Approval and Host Approval. Issuer Approval is the approval of the issuer of the bonds,
and is initially evidenced by the adoption of an Inducement Resolution (called the "Authority Resolution"
in the executive summary), and ultimately by the execution and delivery of the bonds themselves. The
Board grants Host Approval when it adopts a resolution approving the issuance of the bonds by the Issuer
(called the "County Resolution" in the executive summary). Host Approval is the approval of the
governmental unit with geographic jurisdiction over the location of the project.
The primary requirement of Host Approval is that the bonds have been considered at a public hearing at
which members of the public have had an opportunity to express their views on the project and the
issuance of the bonds. The Code contains very specific requirements for the public notice of the hearing,
and a copy of the public notice, which has been reviewed by Authority Bond Counsel and determined to
be Code-compliant is attached to the Authority Resolution.
The Code does not require that the Board itself conduct the public hearing, only that Host Approval may
not be given until the public hearing has been conducted. In practice, both in Collier County and around
the state, the public hearing itself is conducted by the Authority and Host Approval is given after the
Board receives the report and recommendations of the Authority in the form of the Authority Resolution.
There are no requirements in the Code as to what factors must be considered in granting Host Approval;
however, over many bond issues over the past 40 years the authorities have evolved a set of criteria by
which a bond application is measured and a recommendation regarding Host Approval is made to the
BCC. These criteria include the following:
1. Public benefit. While by definition a tax-exempt private activity bond is for a legislatively
declared public purpose, the Authority needs to see an actual benefit to Collier County, including,
but not limited to, local expenditures, employment, local need for the project, and other factors
depending on the specific nature of the proposal.
2. Location and nature of the project, zoning and other land use entitlements, and availability of
public infrastructure. None of the financing authorities will accept an application for financing
unless the applicant has the proper zoning for the facility proposed. In that way, the authority can
be assured that matters such as the location and its relationship to the surrounding area have been
analyzed and approved by the proper authority to make such determinations i.e. the BCC as part
of the zoning process.
3. A financially feasible financing structure. The Authority requires a detailed plan of financing, the
production of audited financial statements, and the testimony of the financial officers of the
applicant, along with financial consultants and/or underwriters.
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Specific findings with respect to the above are made in the Authority Resolution.
Effect of Board Approval
Board Approval of an authority bond issue does not cause the bond to become a county bond or an
obligation of the County. By statute, bonds of this type are payable only from revenues related to the
project, and no public monies of any kind are pledged. This is reflected in the Authority Resolution, the
County Resolution, and on the face of the bonds themselves. Bonds of this type are treated as Component
Unit Debt on the County's annual audit.
FISCAL IMPACT: This program does not require any contribution from the Board of County
Commissioners or any other County agency. As stated above, the bonds are not liabilities of the County,
and the County is not liable for payment in any way.
GROWTH MANAGEMENT IMPACT: The adoption of the attached resolution will have no adverse
growth management consequences. The facilities being constructed are located at the site of existing
NCH facilities, are well served by existing public infrastructure, and are in accordance with all County or
City growth management regulations as applicable, and are subject to the LDC, the Growth Management
Plan, concurrency requirements, and the payment of impact fees. All facilities are authorized by existing
zoning, and all facilities being constructed in the city have received all appropriate permits.
LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, is approved as to
form and legality, and requires majority vote for Board approval. -JAK
RECOMMENDATION: The Board of County Commissioners adopt the attached Resolution.
Prepared by:
Donald A. Pickworth, Counsel
Collier County Industrial Development Authority
ATTACHMENT(S)
1. Res 2010-235 (PDF)
2. Res 2011-16 (PDF)
3. Resolution Industrial Development Authority0001 (PDF)
4. Exhibit A to County Res (Authority Res) (PDF)
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COLLIER COUNTY
Board of County Commissioners
Item Number: 16.K.2
Doc ID: 12045
Item Summary: Request by the Collier County Industrial Development Authority for approval of
a resolution authorizing the Authority to issue revenue bonds for facilities at Naples Community
Hospital's Baker (Downtown) and North Naples campuses, and the refunding of certain bonds originally
issued in 2011.
Meeting Date: 03/24/2020
Prepared by:
Title: Executive Secretary to County Manager – County Manager's Office
Name: MaryJo Brock
03/17/2020 11:59 AM
Submitted by:
Title: County Manager – County Manager's Office
Name: Leo E. Ochs
03/17/2020 11:59 AM
Approved By:
Review:
Budget and Management Office Mark Isackson Additional Reviewer Completed 03/17/2020 12:10 PM
Office of Management and Budget MaryJo Brock Level 3 OMB Gatekeeper Review Skipped 03/17/2020 12:00 PM
County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 03/17/2020 1:04 PM
County Manager's Office Nick Casalanguida Level 4 County Manager Review Completed 03/18/2020 10:15 AM
Board of County Commissioners MaryJo Brock Meeting Pending 03/24/2020 9:00 AM
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