I need to implement a growth strategy that requires the hospital the invest $60,000,000.00 into a new facility to expand operations to meet the growing demands of the population. The funds will be allocated as follows $30,000,000.00 will go to the cost of a brick and mortar facility and the remaining $30,000,000.00 will go toward equipment. Staff will be the hospital employees. I need financial projections for 3 years that represent the implementation of this strategy in order to assess the financial health once implemented (2015, 2016 & 2017). An analysis describing the impact is required as well. I have attached financial statements.

Agenda Item Cover Sheet Agenda Item N o. B3 December 02, 2015 Meeting Date x Regular Section Consent Section Public Hearing Subject: Hillsborough County Industrial Development Authority Hospital Revenue Refunding Bond (Tampa General Hospital Project), Series 2015 on Behalf of Tampa General Hospital Department Name: Economic Development 2733684/2733719 Contact Person: Lindsey Kimball/Jaksa Petrovic Contact Phone: Sign-Off Approvals: 11/19/2015 11/19/2015 Date Department Director Date Assistant County Administrator Management and Budget - Approved as to Financial Impact Accuracy 11/19/2015 11/19/2015 Date County Attorney - Approved as to Legal Sufficiency Date Staff's Recommended Board Motion: Staff recommends approval of the Hillsborough County Industrial Development Authority's not to exceed $187,000,000 Hospital Revenue Refunding Bond (Tampa General Hospital Project), Series 2015, based upon a review of their application and subject to: 1) Adherence to and compliance with the financial conditions specified by the County's Financial Advisor as described in the attached staff review. 2) Review and acceptance of final bond documents by the County Attorney/Bond Counsel. There is no anticipated County financial liability or obligation incurred by this action. Financial Impact Statement: There is no anticipated County financial liability or obligation incurred by this action. Background: Florida Health Sciences Center, doing business as Tampa General Hospital ("TGH"), a Florida notfor profit 501(c)(3) corporation operating a regional referral, academic medical facility and Level I Trauma Center hospital on Davis Islands in Tampa within Hillsborough County, Florida is requesting Hillsborough County's approval of the Hillsborough County Industrial Development Authority ("IDA") not to exceed $187,000,000 Hospital Revenue Refunding Bond ("Tampa General Hospital Project"), Series 2015 (the "Bond"). The Bond will refund the IDA's Variable Rate Demand Purchase Revenue Bonds, (Tampa General Hospital), Series 2006, which financed the expansion, improvement and further equipping of acute care hospital facilities, as per TGH's revised Five Year Capital Plan. On November 5, 2015, at a noticed public meeting, the IDA approved an Inducement Resolution for the Bond. The TEFRA Hearing for the Bond is scheduled for November 26, 2015. Final consideration of the Bond by the IDA is scheduled for December 3, 2015. Acceptance of final bond documents by the County Attorney/County's Bond Counsel, and adherence to and compliance with conditions and the terms specified in the County Financial Advisor's Report, as Financial Advisor to the IDA (all contained in the following staff report) are conditions of staff's endorsement. The IDA's general counsel will present a report concerning the IDA's action regarding the Bond to the BOCC on December 2, 2015. List Attachments: 1) County Staff Review, 2) County Financial Advisor Report, 3) Bond Counsel Letter, 4) IDA Inducement Resolution 3 $187,000,000 Industrial Development Authority Hospital Revenue Refunding Bond, (Tampa General Hospital), Series 2015 Florida Health Sciences Center, doing business as Tampa General Hospital, a Florida notforprofit 501(c)(3) corporation operating a regional referral, academic medical facility and Level I Trauma Center hospital on Davis Island in Tampa within Hillsborough County, Florida is requesting Hillsborough County's approval of the Hillsborough County Industrial Development Authority's (\"IDA\") not to exceed $187,000,000 Hospital Revenue Refunding Bond (Tampa General Hospital Project),Series 2015 (the \"Bond\"). Refinancing The Bond will refund the IDA's Variable Rate Demand Purchase Revenue Bonds, Tampa General Hospital, Series 2006, which financed the expansion, improvement and further equipping of acute care hospital facilities, as per TGH's revised Five Year Capital Plan. IDA Approval On November 5, 2015, at a noticed public meeting, the IDA approved an Inducement Resolution for the Bond. The TEFRA Hearing for the Bond is scheduled for November 26, 2015. Final consideration of the Bond by the IDA is scheduled for December 3, 2015. Acceptance of final bond documents by the County Attorney/County's Bond Counsel, and adherence to and compliance with conditions and the terms specified in the County Financial Advisor's Report, as Financial Advisor to the IDA (all contained in the following staff report) are conditions of staff's endorsement. The IDA's general counsel will present a report concerning the IDA's action regarding the Bond to the BOCC on December 2, 2015. BOCC Approval Tampa General Hospital requests the approval of the Board of County Commissioners during the December 2nd, 2015 regular meeting for its application of up to $187,000,000 in IDA financing. County Staff Review The application has been under review by the following County departments, including the County's Financial Advisor: Economic Development Department's Small/Minority Business Development Section, and Corporate Business Development Sections; and the County Attorney's Office. The reports of the respective departments are as follows: County Financial Advisor Report The County's Financial Advisor, Marianne Edmonds of Public Resources Advisory Group, Inc. has reviewed the application and supplementary documentation relating to the proposed Industrial Development Bond financing Tampa General Hospital (the "Applicant"). The report is included as an attachment. 4 County Attorney's Office The application was reviewed by the County's Bond Counsel, Bryant Miller Olive, P.A.. Bond Counsel submitted the following findings: Pursuant to your request, [Bond Counsel] ... have reviewed draft bond documents relating to... [Tampa General Hospital's application for industrial development bond financing from the Hillsborough County Industrial Development Authority Hospital Revenue Refunding Bonds, (Tampa General Hospital Project), Series 2015 (the \"Bonds)]. Based upon the application to the Authority, [Bond Counsel]...understands that the project is within Hillsborough County and will be refinanced by the Bonds. The Bonds are being issued to refund the outstanding Hillsborough County Industrial Development Authority Hospital Revenue Bonds (Tampa General Hospital Project), Series 2006. The Series 2006 Bonds financed the cost of expansion, improvement, and equipping of the Borrower's acute care hospital facilities (the \"Hospital\") including (i) an approximate 300,009 square foot addition to the hospital on the main campus; (ii) the renovation, remodeling and/or improvements to the existing facilities of the Hospital; (iii) construction of additional parking facilities to support hospital operations and services; (iv) acquisition of and improvements to an offsite family care center and a patient care modular facility; (v) the acquisition of and improvements to facilities located immediately adjacent to the Hospital's main campus for office, administrative and healthcare purposes; and (vi) other capital expenditures ancillary and/or related thereto (collectively, the \"Refinanced Project\"). Based solely upon foregoing, the proposed Refinanced Project is the type of project eligible to be financed pursuant to Part II and III of Chapter 159, Florida Statutes. [Bond Counsel]... have reviewed the preliminary bond documents prepared by counsel to the Borrower and have determined, pursuant to Hillsborough County's guidelines, that the documents accurately reflect that neither the faith and credit nor the taxing power of the Authority or of the County or of the State of Florida or any political subdivisions thereof is pledged to the payment of the principal of or the interest, or premium, if any, on the Bonds. Economic Development (Equal Employment Opportunity Section) The Small/Minority Business Development Section of the Economic Development Department has reviewed Tampa General Hospital's IDA Bond application. Specifically, Part II: Applicant's Civil Rights Status of the application was found to be in compliance with the requirements set forth by the Hillsborough County Board of County Commissioners. Economic Development (Corporate Business Development Section) The economic benefits of this project are based upon the continued operation and successful expansion of Tampa General Hospital (TGH), in Hillsborough County. TGH's project proposes to contribute to the local economy in the following ways: 1. Continued employment of a workforce of over approximately 6,800 fulltime and 930 parttime employees with an estimated $528,000,000 in annual payroll and benefits. 2. Since 2006 Tampa General Hospital has: (a) Completed the construction of a 1,400 space parking facility in 2007 (b) Completed construction of 340,000 sq.ft. Bayshore Pavilion consisting of: (i) Emergency and Trauma Center with 64 private treatment rooms and six trauma rooms which opened in late 2007, 3. 4. 5 (ii) Cardiovascular Center with 47 private pre and postprocedure rooms, six cardiac catheterization labs and six interventional radiology suites, which opened in early 2008, (iii)Women's Center with 21 labor/delivery/recovery rooms, four Csection rooms and four gynecology operating rooms which opened in early 2008, (iv) Intensive Care Unit with 50 ICU beds opened between late 2007 and summer of 2008, (v) Digestive Diagnostic & Treatment Center with 10 procedure rooms, 24 pre and postprocedure rooms, and 32 medicalsurgical beds. (c) Construction of the Bayshore Pavilion also provided temporary employment of approximately 300 construction workers. (d) Completed construction of 125,000 sq.ft. Medical Office Building in 2007 (e) TGH capacity has increased from 877 beds to 1,011 beds (f) Increased admissions from just over 36,500 to just over 40,500 (g) Increased its resident practitioners from 256 to over 300 (h) Increased its employees from approximately 4,800 to over 6,800 The project has resulted in greater support and enhancement of TGH's contribution to University of South Florida College of Medicine's mission to be on the leading edge of innovations in medical care and research as evidenced by increased number of residents. Augmenting the quality of health care available in Hillsborough County can be attributed as an intangible and marginal benefit to economic development by its value of improving the community's quality of life. On the basis of the significant contribution to the County's existing workforce, and quality of life improvements achieved, the Corporate Business Development Section of the Economic Development Department recommends approval of the application. Staff Recommendation Based upon the information provided by the Applicant and subsequent reviews by various County departments and agencies, staff recommends that Tampa General Hospital's application for the IDA's issuance of the Bond be approved subject to: 1. Adherence to and compliance with the financial conditions specified in the County Financial Advisor's section. 2. Review and acceptance of final bond documents by the County Attorney and the County's Bond Counsel. DOCUMENT3 6 100 SECOND AVENUE SOUTH, SUITE 903 ST. PETERSBURG, FLORIDA 33701 TEL: (727) 822-3339 | FAX: (727) 822-3502 PUBLIC RESOURCES ADVISORY GROUP TO: Hillsborough County Industrial Development Authority FROM: Marianne F. Edmonds RE: Financial Advisor's Review - Tampa General Hospital (Florida Health Sciences Center, Inc.) Financing Application DATE: November 18, 2015 Florida Health Sciences Center, Inc. (\"FHSC\") doing business as Tampa General Hospital (the "Applicant" or \"TGH\"), has submitted a preliminary application to the Hillsborough County Industrial Development Authority (\"Authority\") for the refinancing of the Authority's Series 2006 Bonds (Tampa General Hospital, Inc. Project) (the \"Series 2006 Bonds\"). The following is a summary of the applicati by FHSC relating to the proposed Industrial Development Bond financing in the not to exceed amoun of $187 million, in order to refund the Authority's Series 2006 Bonds (Tampa General Hospital Projec Summary of Proposed Financing Pursuant to the application, the Applicant intends to refund the Series 2006 Bonds for interest savings estimated at $63, 443,737.35, with a loan from TDBank (the \"Bank Loan \" or \"Loan\"). The Series 2015 Bank Loan: The proceeds of the Series 2015 Bank Loan will be loaned to TGH for purpose of providing funds that, together with other available funds of TGH, will be deposited as cas or federal securities to an irrevocable escrow to defease the Series 2006 Bonds to their cal October 1, 2016 and to pay certain financing costs. The Loan Commitment has not been signed by TGH; however, the following terms have bee established: The Bank will have the right to \"put\" the Loan to TGH at the end of 15 years. Approximately $140 million of debt will need to be paid or refinanced at that time. The Series 2006 Bonds, which will be refunded with the proceeds of the Loan, were issued in the amount of $185,000,000 to pay a portion of the costs for TGH's Capital Plan. The Tampa General Hospital, Inc. Project consisted of the expansion, improvement and further equipping of TGH's health care facilities. Other Outstanding Debt Series 2012A Bonds $177,994,385 Maturing in various amounts through October 1, 2043 with interest rates of 3% to 5%. 2013 Bank Loan $37,020,000 Maturing in various amounts through October 1, 2014 at an interest rate of 2.57% Current Ratings INDEPENDENT FINANCIAL ADVISORS 7 The Loan will not be rated. However, TGH currently has the following ratings on its outstanding Series 2012 Bonds. Moody's: A3 as of April 2, 2014 with a revised Outlook to Positive. Fitch: A as of July 15, 2015 with an Outlook of Stable. Estimated Sources and Uses of Funds Loan Proceeds: Par Amount Total Sources: $ Refunding Escrow Deposits: Cash Deposit SLGS Purchases $ 184,675,000.00 $184,675,000.00 0.91 183,829,909.00 188,829,909.91 Delivery Date Expenses: Cost of Issuance Bank Commitment Fee Other Uses of Funds: Additional Proceeds Total Uses 750,000.00 92,337.50 2,752.59 $ 184,675,000.00 Tampa General Hospital Since 1927, TGH and its predecessors have provided health care services to residents of Hillsboroug County and its surrounding counties. Florida Health Sciences Center, Inc. took over operation at the health care facilities known as Tampa General Hospital in 1997 pursuant to a Lease Agreement with the Hillsborough County Hospital Authority ("HCHA"), a governmental entity. TGH is accredited by the Joint Commission on Accreditation of Healthcare Organizations and the Commission on th Accreditation of Rehabilitation Facilities, certified by Medicare and Medicaid, and licensed by the Stat of Florida. TGH is licensed for 1,018 beds. Since 1970, the University of South Florida College of Medicine has utilized the Davis Islands facilitie as its primary teaching hospital. There are currently more than 300 full-time equivalent res assigned to TGH in the American College of Graduate Medical Education accredited residency programs. In addition to training physicians, TGH serves as a clinical site for a number of different university and community college training programs. The University of South Florida College Nursing and the University of Tampa, Hillsborough Community College and St. Petersburg College utilize TGH for their nursing and other ancillary personnel-training programs. On October 1, 1997, Tampa General Hospital was converted from a public organization to a Florida not-for-profit corporation. TGH is exempt from federal income taxation under Section 501(a) of the Internal Revenue Code of 1986, as amended as an organization described in Section 501(c)(3) of th Code and not a private foundation as defined in Section 509(a) of the Code. The conversion resulte in the transfer of the assets and liabilities associated with the Hospital's operation from HCHA to FHS As part of the transaction, HCHA, a public body with a Board of Trustees appointed by the Hillsborough County Board of Commissions, owns the real property operated by the TGH and leases Page | 2 8 it to TGH. The Lease associated with this has an initial term of forty-nine (49) years and may be rene for an additional forty-nine (49) years. Rent under the Lease is Ten Dollars ($10.00) per year and ha been prepaid for the initial forty-nine (49) year term. TGH is also required to pay an annual fee of $75,000 to fund HCHA operations. FINANCIAL REVIEW The Series 2015 Bonds are classified as Category B under the County and Industrial Develop Authority policies. The objective of the Category B review is to reasonably determine that the applica is creditworthy and that one can derive a high level of comfort that the applicant's continued operati will be sufficient to produce adequate cash flow to repay the bonds; in addition, that the pr financed is neither speculative nor of an unproven nature such that the likelihood of a default on the bonds will result due to inadequate cash flow or the ultimate bankruptcy of the applicant. In addition the review is to confirm that the terms and conditions of the agreements provide maximum protectio without unduly constraining the applicant from operating profitably. Summary of Selected Financial Statements The following pages contain summaries of Revenues and Expenses; Balance Sheets for the four year ended September 30, 2014 and are derived from the audited financial statements of TGH. preliminary and unaudited data for the fiscal year ending September 30, 2015 was also provided by TGH. Remainder of this Page Intentionally Left Blank Page | 3 9 Consolidated Statements of Operations and Changes in Unrestricted Net Assets Fiscal Year Ended September 30 (dollars in thousands) 2011 2012 2013 2014 Unrestricted Revenue, Gains and Other Support: Patient Service Revenue (net of contractual allowances and discounts) $ 1,026,427 $ 970,318 $ 1,032,349 $ 1,068,768 Provision for bad debts (68,656) (48,661) (77,459) (59,274) Net patient services revenue less provision for bad debts Disproportionate share distributions 957,771 29,841 921,565 26,121 954,890 23,637 1,009,494 23,644 27,678 40,353 40,685 47,070 1,015,289 988,130 1,019,212 1,080,209 488,058 221,306 82,699 21,106 23,845 36,817 39,845 18,541 480,498 208,511 72,366 20,747 25,068 43,509 33,924 19,155 482,255 218,842 75,832 20,395 18,578 42,700 32,453 18,830 490,539 234,372 90,469 20,587 17,518 43,149 32,990 16,336 76,430 72,937 76,538 83,212 1,008,062 976,713 986,423 1,029,171 7,227 11,417 32,789 51,038 6,614 36,850 42,966 36,314 9,088 (75) (7,092) 4,123 15,703 36,775 35,874 40,437 22,929 48,192 68,664 91,475 5,083 3,214 4,277 3,178 Other revenues Total unrestricted revenues, gains, and other support Expenses Salaries and benefits Medical supplies Purchased services Utilities and leases Insurance Depreciation and amortization Professional fees Interest Other Total Expenses Operating Income Nonoperating gains (losses): Investment return Other Total Non-operating net gains (losses) Revenue, gains, and other support over expenses Other changes in net assets: Net assets released from restrictions used for property and equipment Pension-related changes other than net periodic pension cost Increase in unrestricted net assets (1,355) $ 26,658 Page | 4 (530) $ 50,876 78,600 $ 151,541 (5,292) $ 89,361 10 Operating Results for 2015 Preliminary & Unaudited (dollars in thousands) 2014 2015 Operating Revenues: Net patient services revenue $ 1,009,494 $ 1,092,368 Disproportionate share 23,644 26,271 Other revenues 44,900 53,698 Total Operating Revenues $ 1,078,038 $ 1,172,337 $ 387,142 $ 423,137 Operating Expenses Salaries & Wages Employee Benefits 103,397 105,147 Professional fees 32,990 32,176 Medical supplies 234,372 255,567 Other supplies 24,866 24,921 Purchased services 90,469 103,324 Utilities and leases 20,587 24,231 Assessments 13,949 14,966 Medical Professional Care 32,816 37,824 Insurance 17,518 25,692 Other expenses 11,580 15,968 Depreciation and amortization 43,149 45,840 Interest 16,336 16,496 Total Operating expenses Gain from Operations $ 1,029,171 $ 1,125,289 $ 48,867 $ 47,048 Non-operating Activity Excluding Unrealized Gains Gain 47,510 $ Page | 5 96,377 18,953 $ 66,001 11 Summary Balance Sheets Fiscal Year Ended September 30 (dollars in thousands) 2011 Current Assets $ 247,087 2012 $ 282,428 2013 $ 282,132 2014 $ 2015* 316,667 $ 352,250 705,698 Assets Limited as to Use 472,750 499,672 638,952 719,742 Other Long-Term Assets 10,967 10,131 9,412 8,648 7,784 445,752 459,278 449,020 453,897 484,203 $ 1,176,556 $ 1,251,509 $ 1,379,517 $ 1,498,954 $1,549,935 $ $ $ $ 307,973 $ 313,610 Property, Plant and Equipment, net Total Assets Current Liabilities 225,424 252,718 264,168 Other Liabilities Long-Term Debt, Less Current (including obligations under capital leases, excluding current installments) 164,408 166,163 100,007 93,519 114,037 368,533 364,945 396,832 389,556 381,246 Net Assets 418,191 467,683 618,510 707,906 739,436 $ 1,176,556 $ 1,251,509 $ 1,379,517 $ 1,498,954 $1,549,935 Total Liabilities and Net Assets _________ *Unaudited. Discussion of Financial Performance As the unaudited numbers for FY2015 indicate, TGH continues its strong financial performanc demonstrated by operating profitability, solid liquidity and strong MADS coverage. While not indicators in FY2015 were stronger when compared to 2014, TGH's overall performance is solid with Stable 'A' rating from Fitch Ratings and an 'A3' rating from Moody's. TGH has a conservative debt portfolio with capacity for additional debt. Although its MADS coverage by EBITDA dropped from 5.8x in 2014 to 4.8x in 2015, it continues to be well above Fitch's 'A' catego median of 3.8x and above Moody's 2014 preliminary median of 4.7x. Remainder of this Page Intentionally Left Blank Page | 6 12 Financial Performance Indicators The following table is a summary of TGH's financial performance indicators for the past five years an indicators based on unaudited results for 2015. For comparative purposes, we have included the mo recent medians published by Moody's Investor Service for A rated hospitals. Historical 2015* Moodys1 Preliminary Medians 2014 2011 2012 2013 2014 0.8 1.1 3.1 4.5 4.0 2.7 0.7 1.3 3.2 4.7 3.8 - 3.8 2.7 4.6 8.9 5.6 5.9 2.1 4.9 6.7 8.5 4.0 - 8.9 8.7 10.6 14.5 10.9 - 7.2 11.0 12.8 14.0 9.3 - Profitability Indicators: Operating margin Including Unrealized Gain(Loss) Excess margin Including Unrealized Gain(Loss) EBIDA Margin Including Unrealized Gain(Loss) Liquidity Indicators: Days cash on hand 157.5 191.0 249.0 281.9 271.1 225.2 Days In Accounts Receivables 44.8 46.4 44.4 38.9 36.9 52.0 Cushion ratio 15.6 17.9 23.5 28.8 30.4 20.7 113.6 132.7 162.3 193.9 208.1 119.1 3.8 3.3 3.9 5.8 4.8 4.7 3.1 4.1 4.7 5.7 4.1 - 47.4 44.6 39.6 36.2 34.2 31.8 Cash to Debt (%) Capital Indicators: MADS Coverage by EBIDA(x) Including Unrealized Gains(Loss) Debt to capitalization Debt to Assets(%) 31.8 29.8 28.4 26.2 25.2 Moody's Publication: Preliminary US Not-for-Profit and Public Hospital 2014 Medians Growth in Hospital Revenue Edges Ahead of Expenses in 2014. 1 * Provided by TGH based on Preliminary and Unaudited results. Liquidity Ratios: - Days Cash on Hand: Cash, Short Term Investments and Board Restricted Funds/Average 12-month rolling average daily expense - Days in Accounts Receivable: Net Accounts Receivableet Average 3-month rolling average daily patient revenue - Cushion Ratio: Cash+Short Term Investments+Internally Designated Cash+Long Term Investments/Maximum Annual Debt Service(MADS) - Cash to Debt(%): Cash+Short Term Investments+Internally Designated Cash+Long Term Investments/Long Term Debt Profitability Ratios: - Operating Margin: Operating Income/ Total Revenue - Excess Margin: Excess Income/Total Revenue - EBIDA Margin: EBIDA*100/Total Revenue and Gains(Losses) Capital-Related Ratios: - MADS Coverage by EBIDA: EBIDA/MADS - Debt to Capitalization(%): Net L/T Debt/(Net L/T Debt+Unrestricted Net Assets - Debt to Assets(%): Net L/T Debt/Total Assets Page | 7 13 Debt Service Coverage Ratio The following table sets forth the historical debt service coverage ratio for years 2010 to 2015. Historical Debt Service Coverage 2010 Long-Term Debt Service Coverage Ratio (x) 4.3 Projected 2011 2012 2013 2014 2015 3.8 3.3 3.9 5.8 4.8 Financial Covenant Agreement TGH and the Authority entered into a Financial Covenant Agreement (the \"2006 Agreement\") September 28, 2006, the date of the closing of the Series 2006. In 2012, that agreement was amend restated (the \"2012 Agreement\"). The chart below shows the differences between the original and th amended agreements. 2006 Agreement 2012 Agreement Maintain liquidity at least equal to 60 days Maintain cash liquidity at least equal to 45 days cash on hand, but not less than $50,000,000 or more on hand, but not less than $50,000,000 or more than $150,000,000. than $150,000,000. Advance Loan Payment: Advance Loan Payments: Amount equal to (i) the interest due on theAmount next equal to (i) the 1/6 of the interest coming interest payment date plus (ii) 1/2 of the due on the next Interest Payment date, plus (ii) principal due on the next principal payment 1/12of the principalamount or Mandatory date. Amortization Requirement coming due on the To be paid Six months prior to the due date. annual principal payment date. To be paid monthly. Remainder of this Page Intentionally Left Blank Page | 8 14 IDA Criteria and Review Hillsborough County's IDA guidelines encourage an examination of eight specific items. The criteria typically included in the IDA's review, and our assessment of the applicability of the criteria is shown below. 1. Profitability in three of the applicant's last five fiscal Yes years but demonstrating a positive trend for the future; 2. Income statementand balancesheet ratios that are within the range of such ratios for the applicant's industry as published by Moody's; Yes 3. Financial audits for the most recent five years performed by a reputable firmof independentcertified public accountants, resulting in unqualified opinions; 4. No prior defaults on contracts or borrowings; Yes Yes 5. The existenceor likelihood of litigation that could reasonably be judged to impair the applicant's payment of bond obligationsor the viability of the business None operations to be funded with the PAB's; 6. At least 10% of the cost of the project financed with the PAB's should be funded with equity capital of the applicant; Not applicable 7. If the applicant is a subsidiary or division of another company, the parent company must fully guarantee the Not applicable repayment of the bonds; and, 8. Start-up ventures, real estate speculators, or companies without a minimum of a five-year operating history are Not applicable generally discouraged from applying for PAB financing unless certain criteria are met. Recommendations Based upon our review of the information presented by the Applicant, we recommend approval of th proposed loan. The policy of the Authority requires restrictions on the denominations of and transfer of debt that is not rated. Our recommendation for approval is subject to the following conditions: 1. All documentation in connection with the issuance of the bonds and all supporting agreement certificates and opinions of counsel shall be, in form and substance, satisfactory to counsel to the Authority and the County Attorney. 2. Review of the final numbers and the signed bank commitment letter by the Authority' Financial Advisor, General Counsel and Bond Counsel. Page | 9 15 3. TD Bank will make the initial loan. Consistent with Authority guidelines, transfer of the loan will be only to the accredited investors as defined by the Securities and Exchange Commission Regulation D and in minimum denominations of not less than $100,000. The initial investor an any subsequent investor(s) must execute an investment letter. 4. Any material negative change in the credit ratings of the Applicant or any material change in the structure, covenants, terms and conditions of the proposed bonds from the informa disclosed by the Applicant may require reconsideration by the Authority and the Board County Commissioners. 5. The Authority and TGH will maintain the 2012 Agreement. 6. The Bonds will be secured by a leasehold mortgage and a pledge of Accounts, Deposit Accoun and General Intangibles. 7. The Authority will not be obligated to pay principal and interest on the proposed bonds and that neither the faith and credit nor the taxing power of the Authority or of the County or of th State of Florida or any political subdivision thereof is pledged to the payment of the principal of or the interest, or premium, if any, on the proposed bonds. 8. The Applicant will provide all information requested by the Authority, bondholders and the County to ensure compliance with secondary market disclosure requirements of SEC ru 15(c)(2)(12). Page | 10 16 Attorneys at Law One Tampa City Center Suite 2700 Tampa, FL 33602 Tel 813.273.6677 Fax 813.223.2705 www.bmolaw.com November 13, 2015 Jaksa Petrovic, Manager Corporate Business Development Economic Development Department Hillsborough County BOCC 601 East Kennedy Boulevard, 13th Floor Tampa, Florida 33602 Re: Issuance of Not Exceeding $187,000,000 Hillsborough County Industrial DevelopmentAuthority Hospital Revenue Refunding Bonds (Tampa General Hospital Project), Series 2015 Dear Mr. Petrovic: In our capacity as Bond Counsel to Hillsborough County, we are responding to you request that we review the above-referenced proposed transaction of the Hillsborough County Industrial Development Authority (the "Authority"). Pursuant to your request, we have reviewed draft bond documents relating to the above-referenced bonds (the "Bonds") proposed to be issued on behalf of Florida Health Sciences Center, Inc. (the "Borrower") which operates the facilities known as Tampa General Hospital. Based upon the application to the Authority, we understand that the project is within Hillsborough County and will be refinanced by Bonds. The Bonds are being issued to refund the outstanding Hillsborough County Industrial Development Authority Hospital Revenue Bonds (Tampa General Hospital Project), Series 2006. The Series 2006 Bonds financed the expansion, improvement and equipping of the Borrower's acute care hospital facilities (the "Hospital") including (i) an approximate 300,009 square addition to the Hospital on the main campus; (ii) the renovation,remodeling and/or improvements to the existing facilities of the Hospital; (iii) construction of additional parking facilities and/or the improvements to existing parking facilities to support hospital operations and services; (iv) acquisition of and improvements to an off-site family care center and a patient care modular facility; (v) the acquisition of and improvements to facilities located immediately adjacent to the Hospital's main campus for office, administrative and health care purposes; and Atlanta . . Jacksonville Miami . Orlando . . Tallahassee Tampa . Washington, DC 17 Jaksa Petrovic, Manager November 13, 2015 Page 2 (vi) other capital expenditures ancillary and/or related thereto (collectively, the "Refinance Project"). Based solely upon the foregoing, the proposed Refinanced Project is the type of project eligible to be financed pursuant to Part II and III of Chapter 159, Florida Statutes. We have reviewed the preliminarybond documentspreparedby counsel to the Borrowerand have determined,pursuant to HillsboroughCounty's guidelines,that the documents accurately reflect that neither the faith and credit nor the taxing power of th County or of the State of Florida or any political subdivision thereof is pledged to the payment of the principal of or the interest, or premium, if any, on the Bonds. This letter is being solely provided to you for use by the County and solely in connection with this transaction and may not be relied upon by any person or entity. If you have any questions, please do not hesitate to call me. Sincerely, Grace E. Dunlap Managing Shareholder 01067168.doc 18 19 20 21 22 23 24 25 . FLORIDA HEALTH SCIENCES CENTER, INC dba Tampa General Hospital Quarterly Report For The Quarter Ended March 31, 2014 Release Date: April 29, 2014 FLORIDA HEALTH SCIENCES CENTER, INC dba Tampa General Hospital Quarterly Report Preliminary & Unaudited For The Quarter Ended March 31, 2014 Release Date: April 29, 2014 Table of Contents Operating Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Utilization Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Net Patient Services Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Cash Flow Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Liquidity Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 FLORIDA HEALTH SCIENCES CENTER, INC. OPERATING RESULTS For The Quarter Ended March 31, 2014 (in thousands of dollars) 1st Qtr Operating Revenues: Net Patient Services Revenue (1) Disproportionate Share Other Revenues Total Operating Revenues Operating Expenses: Salaries & Wages Employee Benefits Professional Fees Medical Supplies Other Supplies Purchased Services Utilities & Leases Assessments Medical Professional Costs Insurance Other Expenses Depreciation and Amortization Interest Total Operating Expenses Gain from Operations $ 244,877 5,778 8,488 259,143 $ $ $ 96,421 25,298 8,431 56,385 5,080 20,592 4,779 3,341 8,158 7,336 3,068 10,237 4,037 253,164 $ 5,979 $ $ Non-Operating Activity Gain 2nd Qtr YTD 249,559 5,793 10,009 265,361 $ $ $ 94,625 24,492 6,454 59,051 5,914 20,894 4,990 3,606 7,661 7,263 2,601 11,253 4,087 252,891 $ 12,470 $ 5,452 Prior YTD 494,436 11,571 18,497 524,504 $ $ $ 191,046 49,790 14,885 115,436 10,994 41,486 9,769 6,947 15,819 14,599 5,669 21,490 8,124 506,054 $ 18,450 $ 3,643 % Change 478,651 12,064 19,108 509,823 3.3% -4.1% -3.2% 2.9% $ 181,926 55,782 15,602 108,315 10,965 37,148 10,038 6,548 14,801 16,865 4,852 21,763 9,263 493,868 5.0% -10.7% -4.6% 6.6% 0.3% 11.7% -2.7% 6.1% 6.9% -13.4% 16.8% -1.3% -12.3% 2.5% $ 15,955 15.6% 7,449 22.1% $ 9,095 $ 11,431 $ 16,113 $ 27,545 $ 23,403 17.7% $ 36,325 $ 13,158 $ 49,483 $ 37,094 33.4% Including Unrealized Gains: Gain Excess Margin % EBIDA (2) 4.4% $ 25,705 6.1% $ 31,454 5.3% $ (1) Net Patient Services Revenue, as defined. See Page 3. (2) EBIDA calculation excludes unrealized gains (losses). NOTE: These financial statements are presented in a format that is inconsistent with AICPA guidelines. This format is used for internal reporting purposes to our Board of Directors. Prior YTD components may be reclassified to provide more consistent comparison to current YTD activity. Page 1 57,159 4.6% $ 54,430 14.4% 5.0% FLORIDA HEALTH SCIENCES CENTER, INC. UTILIZATION INDICATORS For The Quarter Ended March 31, 2014 1st Qtr 2nd Qtr YTD Prior YTD % Change Discharges (1) Adjusted Discharges (1) 11,573 16,659 11,481 16,316 23,054 32,975 23,381 32,497 -1.4% 1.5% Patient Days (1) Adjusted Patient Days (1) 68,591 98,733 70,440 100,128 139,031 198,861 139,344 193,672 -0.2% 2.7% Length of Stay Average Daily Census (2) 5.9 715 5.9 753 5.9 734 5.9 735 0.0% -0.1% 1.768 1.776 1.760 1.718 2.4% 22,089 7,397 1,347 21,980 7,354 1,258 44,069 14,751 2,605 43,975 14,271 2,622 0.2% 3.4% -0.6% Case Mix Index Emergency Room Visits Surgeries Number of Deliveries (1) Including newborns (2) Excluding newborns NOTE: These financial statements are presented in a format that is inconsistent with AICPA guidelines. This format is used for internal reporting purposes to our Board of Directors. Page 2 FLORIDA HEALTH SCIENCES CENTER, INC. NET PATIENT SERVICES REVENUE, AS DEFINED For The Quarter Ended March 31, 2014 (in thousands of dollars) 1st Qtr 2nd Qtr YTD Prior YTD % Change $913,827 401,571 $1,315,398 $946,245 398,883 $1,345,128 $1,860,072 800,454 $2,660,526 $1,787,739 697,017 $2,484,756 4.0% 14.8% 7.1% 9.0% -4.8% 7.6% 8.0% Gross Patient Services Revenue: Inpatient Outpatient Total Deductions from Revenue: Contractual Allowances Charity Bad Debt Expense Total $ 980,207 66,182 25,118 $ 1,071,507 $ 1,002,404 70,886 23,264 $ 1,096,554 1,982,611 137,068 48,382 $ 2,168,061 $ 1,819,135 143,923 44,967 $ 2,008,025 Gross Revenue less Deductions $ $ $ $ Third Party Settlements Net Patient Services Revenue (1) (as defined) 243,891 248,574 985 $ 244,877 986 $ 249,560 492,464 1,971 $ 494,435 $ 476,731 3.3% 1,921 2.6% 478,652 3.3% Payor Mix (based on gross revenues): Medicare and Medicare HMO Medicaid and Medicaid HMO Managed Care HCHCP Auto Other Total 41.6% 19.0% 24.8% 3.1% 1.4% 10.0% 43.1% 19.1% 25.1% 2.9% 1.6% 8.3% 42.4% 19.1% 25.0% 2.6% 1.5% 9.6% 41.8% 19.4% 24.6% 2.4% 1.4% 10.3% 100.0% 100.0% 100.0% 99.9% (1) See Page 1 NOTE: These financial statements are presented in a format that is inconsistent with AICPA guidelines. This format is used for internal reporting purposes to our Board of Directors. Page 3 FLORIDA HEALTH SCIENCES CENTER, INC. COMPARATIVE BALANCE SHEET For The Quarter Ended March 31, 2014 (in thousands of dollars) ASSETS Cash & Cash Equivalents Short-Term Investments Patient Receivable, Net Inventories Other Current Assets Current Portion of Limited Use Assets Total Current Assets 3/31/2013 72,320 8,068 156,456 20,843 13,940 3,524 $ 275,151 $ Assets Limited As to Use: Internally Designated Held by Trustees Assets Limited as to Use $ $ Goodwill Property, Plant & Equipment, Net Deferred Charges and Other Assets Total Assets LIABILITIES & NET ASSETS Accounts Payable Accrued Expenses Due to Third Party Programs Current Portion of Long-Term Debt Total Current Liabilities 442,178 154,906 597,084 9/30/2013 94,028 8,048 140,201 20,168 10,308 9,380 $ 282,133 $ $ $ 518,371 120,581 638,952 3/31/2014 81,464 8,074 161,235 20,098 25,890 11,344 $ 308,105 $ $ $ 572,675 103,113 675,788 5,739 449,156 4,462 5,437 449,020 3,976 5,135 441,684 3,940 $ 1,331,592 $ 1,379,518 $ 1,434,652 $ $ $ $ 66,423 91,765 71,045 7,046 236,279 $ 83,300 92,638 84,072 4,158 264,168 $ 78,330 72,890 95,939 3,805 250,964 Long-Term Debt, net of current portion Obligations under Capital Leases Deferred Revenue Other Long-Term Liabilities 411,123 154 178,493 396,832 41 99,966 394,574 119,837 Net Assets 505,542 618,511 669,276 $ 1,331,592 $ 1,379,518 $ 1,434,652 Total Liabilities & Net Assets NOTE: These financial statements are presented in a format that is inconsistent with AICPA guidelines. This format is used for internal reporting purposes to our Board of Directors. Page 4 FLORIDA HEALTH SCIENCES CENTER, INC. COMPARATIVE CASH FLOW STATEMENT For The Quarter Ended March 31, 2014 (in thousands of dollars) For Fiscal Period Ended 3/31/2013 Operating Activities: Gain, including unrealized gains(losses) Depreciation and amortization Changes in operating assets and liabilities Net cash provided (used) by operating activities Investing Activities: Purchase of property, plant, and equipment Changes in other long-term assets Net cash provided (used) in investing activities Financing Activities: Series 2003 Debt Extinquished Series 2012A Bonds Issued Series 2013 Bonds Issued Principal changes in long-term debt Net cash used by financing activities $ $ $ $ $ For Fiscal Year Ended 9/30/2013 37,094 21,763 (24,999) 33,858 $ (17,993) 16,771 (1,222) $ (127,200) 179,393 $ $ $ For Fiscal Period Ended 3/31/2014 68,664 42,700 22,533 133,897 $ (34,685) 28,811 (5,874) $ $ $ (2,612) (2,612) $ $ 49,483 21,490 (45,589) 25,384 (17,660) 28,657 10,997 $ (6,649) 45,544 $ (176,270) 179,393 37,020 (11,778) 28,365 Increase (decrease) in Cash and Cash Equivalents $ 78,180 $ 156,388 $ 33,770 Cash & cash equivalents Short-term investments Internally designated limited use assets Bond construction fund Cash, cash equivalents and internally designated $ 72,320 8,068 442,178 50,002 572,567 $ 94,028 8,048 518,371 30,329 650,777 $ 81,464 8,074 572,675 22,334 684,546 $ NOTE: These financial statements are presented in a format that is inconsistent with AICPA guidelines. This format is used for internal reporting purposes to our Board of Directors. Page 5 $ $ FLORIDA HEALTH SCIENCES CENTER, INC. LIQUIDITY INDICATORS For The Quarter Ended March 31, 2014 March September 30 March 2013 2013 2014 Liquidity Ratios Days Cash on Hand (1) 221.6 249.0 258.3 Days in Accounts Receivable (2) 41.7 44.4 41.9 Cushion Ratio (x) 21.0 24.4 25.6 Cash to Debt (%) 136.9 162.3 171.8 3.1 3.1 3.5 3.3 3.2 3.9 4.6 4.6 5.3 7.3 6.7 9.4 10.7 10.6 10.9 13.4 12.8 15.1 3.9 4.0 4.3 4.9 4.9 5.9 Debt to Capitalization (%) 45.6 39.6 37.6 Debt to Assets (%) 30.3 28.4 27.3 Profitability Ratios (%) (3) Operating Margin Including Unrealized Gain(Loss) Excess Margin Including Unrealized Gain(Loss) EBIDA Margin Including Unrealized Gain(Loss) Capital-Related Ratios MADS Coverage by EBIDA (x) Including Unrealized Gain(Loss) (1) Based on total unrestricted cash as defined by TGH Management and a rolling twelve month average of daily cash expense (2) Based on three-month rolling average revenue calculation (3) Profitability Ratios are derived by reclassing bad debt expense from operating revenues to operating expenses NOTE: These financial statements are presented in a format that is inconsistent with AICPA guidelines. This format is used for internal reporting purposes to our Board of Directors. Page 6