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Commissioners approve trustees and public sign-off for Nebraska Methodist's revenue bonds
Summary
After two public hearings the board approved appointments to Hospital Authority No. 3 and granted public approval under IRS rules for revenue bonds to benefit Nebraska Methodist Health System; bond counsel said the issuances would be conduit financings and not a county obligation.
The Douglas County Board of Commissioners held two public hearings and approved (6-0) the appointment of five trustees to Hospital Authority No. 3 and a related public-approval finding under Section 147(f) of the Internal Revenue Code for proposed revenue bonds to benefit the Nebraska Methodist Health System.
Joel Vandervene, bond counsel with Kutak Rock (identified in the record as QTAC Rock), explained that hospital authorities in Douglas County were created under the Hospital Authorities Act and serve as conduit issuers for tax-exempt health-care bonds. He said hospital authority boards must be residents of the authority's territorial area, and answered questions from Commissioner Kavanaugh about why nominees were from the western portion of the county: the authority's statute-defined territory lies north of Dodge Street and west of West Dodge Road and 120th Street with irregular eastern boundaries, and members must reside in that territory.
Vandervene and other representatives from the Nebraska Methodist Health System in the room (identified in the record as Josiah [Bood/Abood], Jeff Francis, CFO, and Mark Johnson, counsel to the hospital authority) said the health system has historically been the borrower for Hospital Authority No. 3 and that the proposed projects concentrate on the hospital's main facilities (including the Nebraska Methodist Hospital campus near 80th and Dodge and the women's hospital on West Dodge).
At the second hearing, Vandervene said the proposed bond amounts were an amount not to exceed $105,000,000 for Hospital Authority No. 2 and an amount not to exceed $245,000,000 for Hospital Authority No. 3. He reiterated that the hospital authorities act as conduit issuers and that the obligation for payment would rest with the Nebraska Methodist Health System and its affiliated borrowers, not Douglas County.
The county clerk noted receipt of one email in opposition and thanked bond counsel and county staff for handling the petitions and required paperwork. Commissioners asked clarifying questions about qualifications for trustees (experience in medicine, finance, law and other fields are listed in the statute as useful qualities) and about the petition process; Vandervene confirmed petitions had gathered far more than the 25-signature statutory minimum.
On the record, the board approved the trustee appointments (motion passed 6-0) and later approved the public'approval resolution for the revenue bond issuances (motion by Commissioner Morgan; second by Commissioner Rogers; vote 6-0).
