SUBSTITUTE RESOLUTION NO. RS2008-144

Whereas, by Resolution No. RS2006-1213, the Metropolitan Council approved an intra-governmental loan of $6,748,700 from the Metropolitan Government to the Hospital Authority, in addition to the outstanding intra-governmental loan of $13,700,000, and provided that the total loan amount would be subject to reimbursement no later than June 30, 2006; and

Whereas, by Resolution No. RS2006-1402, the Metropolitan Council approved the extension of the reimbursement date of the outstanding intra-governmental loan in the amount of $20,448,700 from the Metropolitan Government to the Hospital Authority until June 30, 2007; and

Whereas, by Resolution No. RS2007-2011, the Metropolitan Council approved the extension of the reimbursement date of the outstanding intra-governmental loan of $20,448,700 from the Metropolitan Government to the Hospital Authority until June 30, 2008, and authorized the Director of Finance to enter into a new note for the same sum and under the same terms and conditions not to exceed an amount that can reasonably be secured by the Hospital Authority’s net assets, instead of solely by the Hospital Authority’s accounts receivable; and

Whereas, due to continuing increases in uninsured patients and continuing uncertainty in the financial support from state and federal funding sources, the 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, a budget analysis and projection prepared by the Hospital Authority and reviewed by the Department of Finance indicates that the operating funds of the General Hospital will be depleted in March 2008 and that the General Hospital cannot continue operations through the end of the FY 2008 fiscal year without an additional intra-governmental loan in the amount of $11,500,000; and

Whereas, General Hospital’s net assets and accounts receivable are no longer sufficient to secure a loan 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 2008 fiscal year; and

Whereas, it is in the public interest to extend the reimbursement date of the outstanding intra-governmental loan of $20,448,700 from the Metropolitan Government to the Hospital Authority, and to authorize the Director of Finance to enter into a new note for the additional loan amount of $11,500,000 so that the total amount of the loans, $31,948,700, will be subject to reimbursement no later than June 30, 2009; 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 $11,500,000 to the Hospital Authority of The Metropolitan Government of Nashville and Davidson County (“Hospital Authority”) which shall be in addition to the outstanding intra-governmental loan of $20,448,700, for which the Hospital Authority shall acknowledge and confirm such indebtedness; all loans to be secured by the Hospital Authority’s net assets including its accounts receivable, the combined total of which are subject to reimbursement not later than June 30, 2009, 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.

Section 3. So long as the intra-governmental loans approved pursuant to Section 1 hereof remain outstanding, the Hospital Authority shall not incur additional debt without the approval of the Director of Finance and shall submit a monthly financial report not later than the twenty-fifth day of each month to the Director of Finance, and 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.

Section 4. 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: Erik Cole, Jerry Maynard, Edith Taylor Langster

Attachment(s) on file in the Metropolitan Clerk's Office

Amendment No. 1
To
Substitute Resolution No. RS2008-144

Madam President:

I move to amend Substitute Resolution No. RS2008-144 by deleting Section 3 in its entirety and substituting in lieu thereof the following new Section 3:
“Section 3. So long as the intra-governmental loans approved pursuant to Section 1 hereof remain outstanding, the Hospital Authority shall not incur additional debt without the approval of the Director of Finance and shall be subject to the following reporting requirements:
1. A monthly financial report to be submitted not later than the twenty-fifth day of each month to the Director of Finance, and 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, and expenses for the previous month and year-to-date.
2. A bi-monthly report regarding the operations of General Hospital specifying the total number of inpatient and outpatient visits during the previous two months, the average daily patient census, the total number of Hospital Authority employees working at General Hospital, and a breakdown of uncompensated care including, but not limited to, charity care, uninsured discounts and bad debt. The first bi-monthly report shall be submitted not later than March 25, 2008, and on the twenty-fifth day of every other month thereafter.
3. Written notification to the Vice Mayor and the Chairs of the Council Budget and Finance and Health, Hospital and Social Services committees each time the Hospital Authority requests a drawdown of intra-governmental loan funds.”

Sponsored by: Erik Cole, Rip Ryman

LEGISLATIVE HISTORY
Referred:	Budget & Finance Committee Health, Hospitals and Social    Services Committee
Introduced:	February 5, 2008
Substitute Introduced:	February 5, 2008
Deferred:	February 5, 2008
Amended:	February 19, 2008
Adopted:	February 19, 2008
Approved:	February 25, 2008
By: