A resolution approving a secured loan from The Metropolitan Government of Nashville and Davidson County to the Hospital Authority of The Metropolitan Government of Nashville and Davidson County.

Whereas, when the Hospital Authority was initially established in 1998 it had an outstanding loan from the Metropolitan Government to Nashville General Hospital of approximately $16 million; and

Whereas, increases in the number of uninsured and reductions in financial support from the state forced the hospital to increase its operating deficit and the resulting loan to $63.7 million at June 30, 2005; and

Whereas, the Metropolitan Government commissioned a performance audit of General Hospital that was released in February 2005; and

Whereas, as recommended by performance audit, the Metropolitan Government significantly increased its annual subsidy to the Hospital and appropriated non-recurring funds in the FY 2006 Budget to allow the hospital to pay down its loan to the Metropolitan Government by $50,000,000, leaving a balance of $13,700,000 that was fully secured by the Hospital's accounts receivable;

Whereas, due to continuing uncertainty in the financial support from state and federal funding sources, General Hospital continues to experience a serious cash flow shortage to the extent that it would soon be unable to continue to operate without additional cash; and,

Whereas, General Hospital's accounts receivable are sufficient to support an additional loan of approximately $6,700,0000 from the Metropolitan Government; and

Whereas, this additional loan together with additional essential access funding anticipated to be provided by the State in this fiscal year should be sufficient to allow General Hospital to continue its operations through the remaining months of the FY 2006 fiscal year; and

Whereas, the Hospital Authority's management has secured funding from Hospital Corporation of America to pay for an experienced and qualified consulting team to assist General Hospital in developing a plan to assure that it continues to provide health services to the community within the funding that is made available to it on a recurring basis; and

Whereas, the plan developed pursuant to the work of the consulting team will be available to assist the Hospital Authority, the State and the Metropolitan Government in making long-term decisions in this matter in the FY 2007 budget process; and

Whereas, T.C.A. § 7-57-308(1) authorizes the governing body of any municipality that creates a hospital authority to "advance or lend money" to the authority for use in carrying out its public purposes.

Now, therefore, be it resolved by the Council of The Metropolitan Government of Nashville and Davidson County:

Section 1. That the Metropolitan Council hereby approves an additional intra-governmental loan in the amount of $6,748,700 to the Hospital Authority of The Metropolitan Government of Nashville and Davidson County which shall be in addition to the outstanding intra-governmental loan of $13,700,000, the combined total of which are subject to reimbursement not later than June 30, 2006, and subject to the terms and conditions stated in the Intra-governmental Note attached hereto and incorporated by reference.

Section 2. That the Director of Finance is authorized to take all action necessary to carry out the loan approved by this resolution and to either extend the reimbursement date or to enter into a new note for the same sum and under the same terms and conditions for the fiscal year beginning July 1, 2006, not to exceed an amount that can reasonably be secured by the Hospital Authority's accounts receivable less an appropriate allowance for bad debt.

Section 3. That this resolution shall take effect from and after its adoption, the welfare of the Metropolitan Government of Nashville and Davidson County requiring it.

Sponsored by: Amanda McClendon, Billy Walls

Attachment on file in the Metropolitan Clerk's Office

Amendment No. 1
To
Resolution No. RS2006-1213

Mr. President,

I move to amend Resolution No. RS2006-1213 by deleting Section 2 in its entirety and substituting in lieu thereof the following new Section 2:

"Section 2. That the Director of Finance is authorized to take all action necessary to carry out the loan approved by this resolution. Subject to approval of the Council by resolution, the Director of Finance is further authorized to either extend the reimbursement date or to enter into a new note for the same sum and under the same terms and conditions for the fiscal year beginning July 1, 2006, not to exceed an amount that can reasonably be secured by the Hospital Authority's accounts receivable less an appropriate allowance for bad debt."

Sponsored by: David Briley, Rip Ryman

Amendment No. 2
To
Resolution No. RS2006-1213

Mr. President:

I move to amend Resolution No. RS2006-1213 by renumbering Section 3 as Section 4 and by adding the following new Section 3:

"Section 3. So long as the intra-governmental loan approved pursuant to Section 1 hereof remains outstanding, the Hospital Authority of the Metropolitan Government of Nashville and Davidson County shall submit a monthly financial report not later than the twenty-fifth day of each month to the Chairs of the Council Budget and Finance and Health, Hospital and Social Services committees. Such report shall include, but not be limited to, accounts receivables, the amount of allowance for doubtful collection, the amount of revenue and the sources of revenue realized during the previous month and year-to-date, expenses for the previous month and year-to-date, and progress towards the implementation of the Navigant study recommendations."

Sponsored by: Jim Shulman, Amanda McClendon

LEGISLATIVE HISTORY
Referred:	Budget & Finance Committee Health, Hospitals & Social    Services Committee
Introduced:	March 21, 2006
Deferred:	March 21, 2006
Amended:	April 4, 2006
Adopted:	April 4, 2006
Approved:	April 6, 2006
By: