PRESENTATION TO ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY - - PowerPoint PPT Presentation

PRESENTATION TO ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY

Anchorage, Alaska August 7, 2019

TANANA CHIEFS CONFERENCE

• Dena’ Nena’ Henash, or Tanana Chiefs Conference (“TCC”), was organized in

1971 as a not-for-profit Alaska corporation and is the successor to the historic and traditional governing assembly of the Athapascan people of Interior Alaska. The purposes for which TCC was organized include, among other things, the promotion of the common welfare of Natives of Alaska and their physical, economic and social well being. TCC was recognized as an organization exempt from taxation under Section 501(c)(3) of the Tax Code in May 1978.

• Members of TCC are limited to (a) each Alaska Native Village located in the

geographic area as described in the Alaska Native Claims Settlement Act of 1971 represented by or claimed by the people of Dena’ Nena’ Henash, or TCC, and (b) the Fairbanks Native Association and the Tok Native Associations (collectively the “Members”).

• There are currently 42 Members of TCC, each representing TCC’s constituent

Native villages. Each Member may elect one director to serve on the Board of

• Directors. The Board of Directors elects nine directors to serve as the Executive

Committee of the Board of Directors.

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Overview

TANANA CHIEFS CONFERENCE

• With the passage of the Indian Self Determination and Education Assistance Act of 1975, TCC moved

quickly to become a regional provider of dozens of Bureau of Indian Affairs programs. Also known as Public Law 93-638 or PL 638, this Act allowed Indian Tribes or Tribal consortiums to contract with the Federal Government to provide Indian program services directly to their own Tribal members.

• Under PL 638, Tanana Chiefs Conference contracted with the Bureau of Indian Affairs to manage and

deliver services such as housing, lands management, Tribal government assistance, education and employment, and natural resources management. TCC also contracted with the Alaska Area Native Health Service to provide services such as Community Health Aid, outreach, environmental health, mental health, and substance abuse counseling.

• By the late 1970s, Tanana Chiefs Conference had successfully bid to deliver certain healthcare, social

services, and public safety services to Interior residents, including non-Native residents, on behalf of the State of Alaska.

• In 1980, TCC decentralized its program operations away from Fairbanks by establishing sub-regional
• ffices to serve the Upper Tanana, Yukon Flats, Yukon Tanana, Yukon Koyukuk, Lower Yukon, and

Kuskokwim sub-regions. This change in structure provided more local employment, attention to sub- regional program priorities, and better client access to information and services.

• In the late 1980s, TCC assumed management of the Alaska Native Health Center in Fairbanks and

renamed it Chief Andrew Isaac Health Center after the traditional Athabascan Chief from Dot Lake. TCC also assumed the Contract Health Care Program and developed health facilities and services, including the Paul Williams House, Dental and Eye Clinics, and several alcohol recovery camps.

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History

TANANA CHIEFS CONFERENCE SUB-REGIONS

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• The Tanana Chiefs Conference region covers

an area of 235,000 square miles in interior Alaska, which is equal to about 37% of the entire State of Alaska, and just slightly smaller than the State of Texas.

• Within the TCC region are Fairbanks North

Star Borough and six Sub-Regions:

• Lower Yukon Sub-Region
• Upper Kuskokwin Sub-

Region

• Upper Tanana Sub-Region
• Yukon Flats Sub-Region
• Yukon Koyukuk Sub-Region
• Yukon Tanana Sub-Region
• Within the six Sub-Regions

are 39 villages

TANANA CHIEFS CONFERENCE

• TCC operates four distinct business segments with separate operating departments:
• Health Services
• Client Development

Offers a wide range of family centered services focused on promoting and supporting safe and stable families. Programs include individualized training, information and referral, crisis intervention, counseling, case management, financial assistance, transportation, respite, foster and child care, nutrition and supportive services. Programs are supported jointly, through contracts and agreements with private, local, state and Federally funded agencies, with the majority of resources generated from Federal grants.

• Tribal Government and Client Services

Assists member villages in strengthening their sovereign governments and to provide quality services, employment opportunities, community infrastructure, programs, and education to their members in order to build safer, healthier and more sustainable communities.

• Natural and Cultural Resources

Administers the following programs; Forestry; Realty; Rural Energy; Cadastral Survey; and Wildlife and Parks.

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Overview

TANANA CHIEFS CONFERENCE

Health Services Department

• The Health Services Department of Tanana Chiefs Conference provides primary

care, urgent care, pediatrics, internal medicine, orthopedics, OB/GYN, general surgery, dental, optometry, lab, radiology, physical therapy, chiropractic care, acupuncture pharmacy, and behavioral and mental health services, including substance abuse treatments, from several facilities in Fairbanks, Alaska, and locally within each of its member villages expect for those villages in the Lower Yukon and Kuskokwim regions that are served by other Tribal Health Organization

• Primary medical services are provided at Chief Andrew Isaac Health Center, a

95,000 square foot ambulatory health center on 9.5 acres, located in Fairbanks, satisfying the criteria established by Indian Health Services (“IHS”) for services

• ffered in an IHS ambulatory health center. An ambulatory health center most

closely resembles a medical clinic with medical, optometry and dental office space. There are no inpatient beds in Chief Andrew Isaac Health Center.

• Certain higher acuity services, including emergency room visits, are referred to

Fairbanks Memorial Hospital, located across the street from Chief Andrew Isaac Health Center. Fairbanks Memorial Hospital is a community based hospital with 152 licensed acute care beds, cancer treatment center, mental health unit, imaging center, cardiology clinic and catheterization lab.

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PATIENT SERVICE AREA

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• Within the region served by TCC, the following Sub-

Regions and Fairbanks North Star Borough receive care at Chief Andrew Isaacs Health Center:

• Upper Tanana Sub-Region
• Yukon Flats Sub-Region
• Yukon Koyukuk Sub-Region
• Yukon Tanana Sub-Region
• The City of Fairbanks is the regional economic, transportation and medical

hub of the region served by Tanana Chiefs Conference.

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HEALTHCARE SERVICES – CHIEF ANDREW ISAAC HEALTH CENTER

Dental Pediatrics General Surgery Pharmacy Internal Medicine Primary Care Lab Radiology OB/GYN Urgent Care Orthopedics Optometry

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HISTORICAL PATIENT ENCOUNTERS

91,151 90,307 99,352 120,649 135,982 137,854 135,047 152,762 82,136 81,073 89,154 109,212 123,917 122,607 118,753 132,770 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 2010 2011 2012 2013 2014 2015 2016 2017 Tanana Chiefs Conference Chief Andrew Isaac Health Center

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STATEMENT OF OPERATING REVENUES – TANANA CHIEFS CONFERENCE CONSOLIDATED

2014 2015 2016 2017 2018 OPERATING REVENUES Grants, compact and contracts 130,196,478 $ 135,299,831 $ 138,482,022 $ 144,859,914 $ 145,500,267 $ Program and third party 21,284,533 27,539,273 36,589,290 40,281,749 45,486,693 Rental, contributions, and other revenue 670,821 19,041,958 13,155,554 2,530,283 1,732,574 Total 152,151,832 $ 181,881,062 $ 188,226,866 $ 187,671,946 $ 192,719,534 $ OPERATING EXPENSES Salaries and fringe benefits 63,446,899 $ 69,396,389 $ 80,547,036 $ 82,892,209 $ 86,091,192 $ Professional and contractual services 33,992,968 32,350,708 31,531,868 28,742,236 30,861,260 Grants 7,979,606 10,060,175 9,001,487 13,401,280 13,065,783 Other 26,423,853 31,353,172 32,107,735 33,914,010 35,694,703 Total 131,843,326 $ 143,160,444 $ 153,188,126 $ 158,949,735 $ 165,712,938 $ Operating Income 20,308,506 $ 38,720,618 $ 35,038,740 $ 28,722,211 $ 27,006,596 $ NONOPERATING REVENUES AND EXPENSES Investment income 1,696,400 $ (10,543) $ 2,639,757 $ 2,776,615 $ 2,513,801 $ Equity earnings in joint venture 202,331 226,326 190,871 96,765 126,210 Interest Expense (5,624,164) (5,543,283) (5,944,249) (7,058,230) (6,768,934) Total (3,725,433) $ (5,327,500) $ (3,113,621) $ (4,184,850) $ (4,128,923) $ Income Before Other Revenues and Expenses 16,583,073 $ 33,393,118 $ 31,925,119 $ 24,537,361 $ 22,877,673 $ Net Position at beginning of year 55,122,186 $ 71,705,259 $ 105,098,377 $ 137,023,496 $ 161,560,857 $ Increase/Decrease in Net Assets, adjusted 71,705,259 $ 105,098,377 $ 137,023,496 $ 161,560,857 $ 184,438,530 $

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KEY FINANCIAL RATIOS

Unrestricted Cash and Investments to Debt and Days Cash on Hand

• Tanana Chiefs Conference has:
• Unrestricted cash and investments to debt equal to 313.40% as of September

30, 2018

• 235 Days Cash On Hand as of September 30, 2018
• Debt to Capitalization of 14.06% as of September 30, 2018

101 179 115 191 235

• 50.00

100.00 150.00 200.00 250.00 2014 2015 2016 2017 2018

Days Cash on Hand

49.60% 96.52% 106.64% 214.29% 313.40% 0.00% 50.00% 100.00% 150.00% 200.00% 250.00% 300.00% 350.00% 2014 2015 2016 2017 2018

Unrestricted Cash & Investments as %

• f Debt

45.26% 35.97% 26.41% 19.59% 14.06% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 2014 2015 2016 2017 2018

Debt to Capitalization

• Tanana Chiefs Conference is seeking to expand services and facilities in order to meet the needs of its

growing and aging population, self-perform services that are currently contracted out, ensure financial sustainability, and provide care closer to home. TCC has identified services that can be sustained based on projected population growth, and evaluated financial projections in order to determine the most sustainable mix of services that also supports its core primary care service mission. TCC has exceeded capacity in its current facility, necessitating the need for expansion in order to meet the future needs of those served by TCC.

• TCC engaged The Innova Group to assist in the development of a Strategic Capital Investment Plan as a

means of developing a conservative financial analysis to establish the most desirable service line capital investments for TCC. The analysis was designed to allow TCC to see and understand what services would pay for themselves, with the goal of developing an expanded but sustainable healthcare organization.

• Key assumptions in the analysis include (a) the financial analysis model is based on current billing

performance, (b) the model envisions a world without Medicaid expansion, (c) as the Health Service Master Plan vision desires the capacity to serve the Northern Tribal Health Organizations, the space and staffing assumptions include the expenses to serve such population, but revenues are based on the local population and do not include the northern neighbors, (d) construction costs were allocated on a departmental square footage basis, pro-rated against the total cost of construction per options, and (e) the funds provided pursuant to the Annual Funding Agreement with Indian Health Services were eliminated for purposes of analysis.

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EXPANSION PLAN

Strategic Capital Investment Plan

• Funds from the proposed financing will be used to pay all or a portion of the costs of the acquisition,

expansion, renovation, furnishing and equipping of certain health care facilities at the Chief Andrew Isaac Health Center including, without limitation, constructing a separate stand-alone building with shell space included for future growth, incorporating renovations of existing space, expanding existing services for primary and urgent care, general surgery, general radiology, lab and physical therapy, and providing new services including procedure rooms, audiology, CT scan,

• ncology/infusion

therapy,

• ccupational

therapy,

• phthalmology and a wellness center, and related site and other improvements to the Health Center;
• In addition to the expansion of Chief Andrew Isaac Health Center, proceeds of the financing will fund the

acquisition, construction, expansion, furnishing and equipping of health care facilities located in, Tok, including space for primary care, trauma/urgent/emergent care, laboratory, radiology, pharmacy, dental, behavioral health, and itinerant specialty medical services, and support services including nursing, registration, biomedical, facilities and security, and related site and other improvements to the clinic.

• To the extent there are unspent proceeds following completion of the expansion of Chief Andrew Isaac Health

Center and construction of the facility in Tok, TCC anticipates funding the following projects:

• The acquisition, construction, expansion, furnishing and equipping of health facilities located at:

– Manley Hot Springs, including space for primary care, laboratory, pharmacy PickPoint machine, sterilization, and itinerant specialty medical and dental services, and related site and other improvements to the clinic; – Evansville, including space for primary care, laboratory, pharmacy PickPoint machine, sterilization, and itinerant specialty medical and dental services; and – Northway, including space for primary care, laboratory, pharmacy PickPoint machine, sterilization, and itinerant specialty medical and dental services.

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EXPANSION PLAN

• A map of the expanded Chief Andrew Isaac Health Center. The grey areas of the proposed

building expansion, with TCC having the ability to add a second floor in the back of the facility and to the west-side of the building. The yellow represents the current facility.

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EXPANSION PLAN

Facilities

• The plan of finance consists of (a) the defeasance of TCC’s outstanding long-term debt consisting of

the Alaska Municipal Bond Bank Master Resolution General Obligation Bonds (2016) Master Resolution) Series 2016A outstanding in a principal amount of $32,195,000 from cash on hand on or about August 6, 2019, and (b) issuance, on or about October 3, 2019, of Alaska Industrial Development and Export Authority Revenue Bonds (Tanana Chiefs Conference Project) Series 2019A (the “Series 2019A Bonds”) in a principal amount of approximately $129,915,000 yielding expendable proceeds of approximately $153,670,530 based upon original issue premium of $23,755,530.

• The Series 2019A Bonds are expected to be assigned a credit rating of “A+” based upon the credit

rating of “A+” assigned to TCC by Fitch Ratings. The bonds will bear a tax-exempt fixed rate of interest, be structured to provide level debt service, and have a final maturity date of on or about October 1, 2049.

• Proceeds of the Series 2019A Bonds will be used to fund (a) the expansion of Chief Andrew Isaac

Health Center and a health facility in Tok ($130,000,000), (b) two years of capitalized interest ($13,352,375), (c) a deposit to the Debt Service Reserve Fund ($8,623,375), and (d) costs of issuance, including underwriter’s fees ($1,694,780).

• The Series 2019A Bonds will be secured by (i) a Deed of Trust, (ii) TCC’s Health Care Revenues, (iii) a

pledge of TCC’s General Revenue, and (iv) a cash funded Debt Service Reserve Fund. The Series 2019A Bonds are not general obligations of AIDEA.

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FINANCING PLAN

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FINANCING PLAN

$130 Million Expansion Plan – Chief Andrew Isaac Health Center and Tok

Estimated Sources and Uses of Funds - $130 Million Expansion Plan (1) Sources of Funds: AIDEA Conduit Issue Par Amount of Bonds 129,915,000.00 $ Original Issue Premium 23,755,530.40 153,670,530.40 $ Uses of Funds: AIDEA Conduit Issue Deposit to Project Fund 130,000,000.00 $ Capitalized Interest through October 1, 2021 13,352,375.00 Deposit to Debt Service Reserve Fund 8,623,375.00 Cost of Issuance 1,694,780.40 153,670,530.40 $ True Interest Cost 3.68% All-In True Interest Cost 3.73% Maximum Annual Debt Service 8,623,375.00 $ Average Annual Debt Service 8,583,525.42 $

(1) Assumes rates as of July 2019.

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FINANCING PLAN

Projected Pro-Forma Debt Service Coverage - $130M Expansion

(1) Prior to the financing, on or about August 6, 2019, TCC’s existing debt will be defeased and will no longer remain outstanding.

2018 Excess of revenues over expenses 22,877,673 $ Depreciation and Amortization 3,441,558 Interest 6,768,934 Net Revenue Available For Debt Service (EBIDA) - Actual 33,088,165 $ Pro-Forma Additional Average Annual Debt Service - $130 Million Expansion Plan 8,583,525 Annual Debt Service Coverage 3.85x Max Annual Debt Service - FY2026 $8,623,375 Pro Forma Projected MADS coverage 3.84x Tanana Chiefs Conference

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