018-99
CERTIFICATE
The undersigned Chairman and Clerk of the Board of Supervisors of the County
of Frederick, Virginia, (the "Board") certify that the attached is a true, correct and
complete copy of a Resolution adopted by a majority of the members of the Board
present and voting at a meeting duly called and held on November 10, 1999 in
accordance with law, at which meeting a quorum was present and acting throughout, that
such Resolution has not been repealed, revoked, rescinded or amended, but is in full force
and effect on the date hereof, and that the undersigned Clerk of the Board is the custodian
of such Resolution and the undersigned Chairman of the Board is the person to whom
such Clerk reports.
Dated: November _, 1999
.. Vd, i
('-,.f. ',' /'
Clerk)
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BOS RESOLUTION NO.: 018-99
RESOLUTION OF THE BOARD OF SUPERVISORS OF
FREDERICK COUNTY. VIRGINIA
WITH RESPECT TO THE ISSUANCE,
IN AN AGGREGATE PRINCIPAL .-\iHOUNT
NOT TO EXCEED 570,000.000,
BY THE INDUSTRIAL DEVELOP"IENT AUTHORITY OF
CLARKE COUNTY. VlRGINL-\ OF ITS
HOSPITAL FACILITV REVENUE BONDS
(WINCHESTER :VIEDICAL CENTER, INC.)
SERIES 1999
WHEREAS, Frederick County, Virginia (the "County") is a political subdivision of the
Commonwealth of Virginia exercising public and essential governmental functions pursuant to
the Constitution and laws of the Commonwealth of Virginia; and
WHEREAS, Winchester Medical Center, Inc. (the "Medical Center") is a private,
nonstock corporation duly incorporated and validly existing under and by virtue of the laws of
the Commonwealth of Virginia. which owns and operates, among other things, Winchester
Medical Center CWNIC"); and
WHEREAS, \V}v[C is located in the City of Winchester and serves a primary servIce
area that includes the County; and
WHEREAS, the Industrial Development Authority of Clarke County, Virginia (the
"Authority") has by resolution adopted November 9, 1999 (the "Inducement Resolution")
evidenced its desire to issue, and its preliminary approval of the issuance of, its Hospital Facility
Revenue Bonds (Winchester Medical Center, Inc.), Series 1999 in an aggregate principal amount
not to exceed $70,000,000 (the "Bonds") for all or a portion of the following purposes (a) to
pay, or reimburse the Medical Center for paying, all or a portion of the costs of (i) the
replacement and expansion of the Medical Center's emergency room, (ii) the renovation.
expansion and equipping of the Medical Center's facilities (the "Medical Campus") over the next
three years to accommodate increased growth needs, including the renovation of space for food
service, the relocation and expansion of space for medical outpatient services, the relocation and
expansion of space for morning admissions of patients, the renovation and expansion of
operating rooms, the expansion of space for child care, the constmction of an electrical
substation, the replacement of an angiography suite, the expansion of space for the imaging
center, the acquisition and installation of additional magnetic resonance imaging equipment, the
installation of a new telephone system, the installation of a temperature control system as part of
the energy management program, the expansion of space for cardiac catheterization services and
the holding area for such services, the renovation and relocation of space for outpatient physical
therapy and occupational therapy, the relocation and equipping of sterile processing and storage
space for operating rooms, the constmction of a vehicle maintenance tacility, and other general
renovations of the Medical Campus and acquisition of general equipment for use at the \"'ledical
Campus, (iii) the renovation of the Medical Center's central plant facilities (the "Central Plant
Renovations"), and (iv) the construction of a new interchange on Route 37 (the "Interchange") to
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provide additional access to the Medical Campus and relieve traffic congestion at its Amherst
Street entrances (collectively, the "Project"); (b) to fund a reserve fund for the Bonds, if it is
determined at the time of the sale of the Bonds that funding such reserve fund is warranted, and
(c) to pay certain costs of issuance, including certain fees tor a liquidity facility and a premium
for a municipal bond insurance policy. of the Bonds (collectively, the "Financing"); and
WHEREAS, the Project. other than the interchange and the Central Plant Renovations,
will be located at 1840 Amherst Street, Winchester, Virginia 2260 I and will be owned and
operated by the Medical Center; the Interchange will be located primarily in the County with a
minor portion to be located in the City of Winchester, Virginia, specifically at a new interchange
onto Route 37 from the Medical Campus between the Route 50 Interchange and the Route 521
Interchange and upon completion, the Interchange will be deeded to, owned and maintained by
the Commonwealth of Virginia; and the Central Plant Renovations will be located at 333 West
Cork Street, Winchester, Virginia 12601 and will be owned and operated by the Medical Center;
and
WHEREAS, on behalf of various interested governmental entities, including the Board
of Supervisors of Frederick County, the Authority held a public hearing on November 9, 1999
with respect to the issuance of the Bonds in accordance with state and federal law; and
WHEREAS, the Authority has delivered, or caused to be delivered, to the Board of
Supervisors of the County (i) a copy of the Inducement Resolution, (ii) a reasonably detailed
summary of the comments expressed at the public hearing held on November 9, 1999 and (iii) a
fiscal impact statement concerning the Project and the Bonds in the form specified in Section
15.2-4907 of the Industrial Development and Revenue Bond Act; and
WHEREAS, the County wishes to concur with the adoption of the Inducement
Resolution and approve the Financing,
NOW THEREFORE, BE IT RESOLVED by the Board of Supervisors of Frederick
County, Virginia:
SECTION 1. The Board of Supervisors of the County hereby concurs \vith the adoption
of the Inducement Resolution and all actions taken by the Authority as set forth in the preamble
to this Resolution, and approves the Financing, including, without limitation, the issuance by the
Authority of the Bonds for all or any of the purposes set forth above.
SECTION 2. This Resolution shall take etfect immediately upon its adoption.
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I hereby certify that the foregoing is a true and exact copy of a Resolution adopted at a
meeting of the Board of Supervisors of Frederick County, Virginia held on November 10. 1999,
at which meeting a quorum was present and voted.
Clerk of Frederick County, Virginia
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3
MCGUlREWOODS
BATnE&BOOTHELLP
One James Center
901 East Cary Street
Richmond, Virginia 23219-4030
Telephone/TOO (804) 775-1000 . Fax (804) 775-1061
Cynthia L. Hendren
c1hendre@mwbb.com
Direct Dial: (804) 775-7773
Direct Fax: (804) 775-1061
BY FEDERAL EXPRESS
November 19, 1999 f~"&l.\'ll2J?t/) ..
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Industrial Development Authority of Clarke County, Virginia
Hospital Facility Revenue Bonds
(Winchester Medical Center, Inc.), Series 1999
Ms. Carol Bayliss
County of Frederick
107 North Kent Street
Winchester, Virginia 22601
Dear Carol:
As we discussed, enclosed is a certification to be signed by the Clerk of the Board of
Supervisors, as well as the Chairman of the Board of Supervisors. Please attach a certified copy
of the Resolution adopted by the Board on November 10,1999. I have included a copy of the
Resolution for your information. As I mentioned on the phone, we need these certifications in
connection with the validation hearing in this matter which will be held on Monday, December
6, 1999, so I would like to receive this documentation by December I if possible. For your
convenience, I have enclosed a self-addressed Federal Express envelope for you to use when
returning the certificate and certified resolution to me.
Thank you for your assistance with this matter and please let me know if you have any
questions.
Very truly yours,
cy~'nd''''
Legal Assistant
Enclosures
www.mwbb.com
Al.MAl'Y . ATlANTA . IlmIMORE . BRUSSELI . CHARLOITE . CHARLOTIliSVIllE' CHICAGO' JACKSONVIllE . Moscow . NORFOLK . RIal MONO . TYSONS CoRNER . W ASIlIN<;T(JN . lORlOI (OF CouNSEL)
FISCAL IMPACT STATEMENT
November 1-, 1999
Applicant:
Winchester Medical Center, Inc.
I.
Maximum amount of financing sought:
$70,000,000.00
City of Winchester Clarke County Frederick County
2. Estimated taxable value of the facility's
real property to be constructed in the
locality: $ N/A $ N/A $ N/A
3. Estimated real property tax per year using
present tax rates: $ N/A $ N/A $ N/A
4. Estimated personal property tax per year
using present tax rates: $ N/A $ N/A $ N/A
5. Estimated merchants' capital tax per year
using present tax rates: $ N/A $ N/A $ N/A
Citv of Winchester Clarke County Frederick Countv
6. a. Estimated dollar value per year of
goods that will be purchased from
Virginia companies within the locality: $14,000,000.00 $ 0.00 $ 0.00
b. Estimated dollar value per year of
goods that will be purchased from
non- Virginia companies within the
locality: $36,000,000.00 $ 0.00 $ 0.00
c. Estimated dollar value per year of
services that will be purchased from
Virginia companies within the locality: $ 3,300,000.00 $ 0.00 $ 0.00
d. Estimated dollar value per year of
services that will be purchased from
non- Virginia companies with the locality: $ 6,200,000.00 $ 0.00 $ 0.00
7.
Estimated number of regular employees on
year round basis:
3,000
8.
Average annual salary per employee:
$
35,000.00
Note: The Winchester Medical Center is located in the City of Winchester, Virginia, and provides medical
services to, among others, residents of the City of Winchester, Clarke County and Frederick County.
Most of the project to be tinanced with the proceeds of the financing will be located in the City of
Winchester. A portion will be located in Frederick County.
Respectfully submitted,
INDUSTRIAL DEVELOPMENT AUTHORITY
OF CLARKE COUNTY, VIRGINIA
By: ~/)S<:...-.
Chairman
SUMMARY OF STAIUvlt::NTS MADE AT THE NOVEMl3ER <), 1<)')') PUl3L1C HEARING
BEFORE THE INDUSTRIAL DEVELOPMENT AUTHORITY OF CLARKE COUNTY,
VIRGINIA REGARDING THE PROPOSED ISSUANCE OF UP TO $70,OO(),000 IN REVENUE
BONDS FOR THE BENEFIT OF WINCHESTER MEDICAL CENTER
ARTHUR CLARK- Expressed his belief that the IDA should be charging Winchester Medical
Center a higher administrative fee. He also indicated that he did not understand why the IDA was
doing the financing. He then read a letter from Helene Meaney expressing the view that the bonds
should not be issued in that there will be no reduction in the cost of patient care and since Clarke
County citizens have more important needs.
DR. HOUCK- Stated that he is on the staff of the Hospital and very much in favor of the bond
issue. Stated that the tax-exempt bonds will save the Hospital about $1 ,SOO,OOO in interest
expense per year for a total of about $4S,000,000 over the 30 year life of the bonds. The savings
could be used to help the County in many ways, such as higher salaries for employees, lower rates
and better equipment and technology to provide better health care. Pointed out that 92 residents of
Clarke County are employed at the Hospital. Discussed the Hospital's excellent track record of
providing care for patients who cannot afford to pay.
TED BISHOP- Said that the IDA is important to the County for economic development purposes.
Wanted to know who was going to be liable on the bonds if FSA (the bond insurer) did not pay.
Was not if favor of the child care center or vehicle maintenance facility portions of the Hospital's
project, since those projects hurt the private companies that could provide those services.
PHIL FARLEY - Chief Financial Officer of the Hospital. Stressed that the Hospital is very
important to Clarke County. Stated that the Hospital Board's policy is to never turn away a
patient for inability to pay. Also explained that the Hospital came to the Clarke County IDA
because using the City of Winchester IDA would have negated Winchester's ability to issue "bank
qualified" bonds, thereby costing the Hospital several hundred thousand dollars. Pointed out that
the Winchester IDA has never charged the Hospital an administrative fee.
PA TRICK CLA WSON- Asked to be told the legal fees and the fees for Lehman Brothers (the
bond underwriter) on the bond issue. Said that the IDA was going way beyond being a good
neighbor, and suggested the IDA approach the application as a pure business matter. Stated that
the Hospital does not need tax-exempt financing and that providing such financing was just
corporate welfare. Suggested that the IDA should not provide 100% of the financing, and that the
other jurisdictions served by the Hospital should participate. Said that the reason those
jurisdictions were not participating is that they are concerned about the deal, particularly securities
fraud. Said the IDA had a legal duty to help Clarke County, not other localiti<::s. Expressed vi<::w
that bonds can't be issued to finance roadway interchanges, and stated that a large portion of the
bond proceeds were going into a blind pool that is not permitted by law. Stated that the IDA was
not charging the Hospital enough, and should charge a fee of y, of I % or at least what Lehman
Brothers is receiving. Said that if the IDA did not do the right thing, there would be more court
challenges, and that there should be a voter referendum. Criticized the legal work performed by
the IDA's previous counsel.
ELIZABETH SNELLINGS- Suggested that the IDA should focus on economic development
projects and expressed personal concern over a $70,000,000 bond issue. Concerned about the
personal liability of the taxpayers. Was not in favor of the telephone system or vehicle
maintenance facility portions of the project. Stated that the IDA should approve no more than $3-
10,000,000 in bonds. Expressed great concern about year 2000 issues and thanked Mr. Clawson
for his presentation. Also thanked Mr. Pierce (an IDA member) for suggesting the IDA's accollnt
be moved ['rom one bank to another in order to avoid any appearance of a contlic!. Largest
conc<::rn as about the lack of competition at the Hospital and its monopoly in the area.
JERRY KIRK- Stated that the Hospital make $13,000,000 a ycar and that any CEO whose
company made that kind of money and still proposcd to borrow $70,000,000 should be fired. Said
that the people did not want the bond issue.
PA TRICK CLA WSON- Repeated his request that the IDA hold a referendum on the proposed
bond issue.
Following the public hearing, the members of the lOA present voted unanimously to approve the
financing lor Winchester Medical Center in an amount not to exceed $70,000,000.