$33,080,000 ST. TAMMANY PUBLIC TRUST FINANCING AUTHORITY REVENUE AND REFUNDING REVENUE BONDS (CHRISTWOOD PROJECT) SERIES 2014

Transcription

1 $33,080,000 ST. TAMMANY PUBLIC TRUST FINANCING AUTHORITY REVENUE AND REFUNDING REVENUE BONDS (CHRISTWOOD PROJECT) SERIES 2014 QUARTERLY REPORT FOR THE PERIOD ENDING MARCH 31, 2017

2 Quarterly Report for the Period Ending: March 31, 2017 TABLE OF CONTENTS ITEM DESCRIPTION PAGE 1 Community Description 3 2 Project Summary and Update 4 3 Management Discussion & Analysis 5 4 Occupancy Statistics Financial Information Loan Covenants

3 COMMUNITY DESCRIPTION Christwood is a not-for-profit corporation organized in 1991 under the laws of the State of Louisiana for the purpose of owning a continuing care retirement community. Christwood has been determined to be exempt from federal income tax by virtue of being an organization described in Section 501(c)(3) of the Internal Revenue Code of Life Care Services LLC of Des Moines, Iowa has provided management services since The community is located in Covington, Louisiana on approximately 125 acres. The community consists of 143 independent living apartments, 18 cottages, 34 assisted living apartments and 30 skilled nursing apartments. Christwood also has a Community Center which features an indoor swimming pool, aerobics room, exercise equipment room, game room, activity room, two conference rooms, spa and salon, coffee house as well as office space and common areas. The project was originally financed with Mortgage Revenue Bonds, Series 1995A and Variable Rate Mortgage Revenue Bonds, Series 1995B for a total of $15,805,000. The 1995 debt was refunded in 1998 with Revenue Refunding Bonds, Series 1998 in the amount of $22,115,000. In 2011, additional Revenue Bonds were issued, Series 2011, in the amount of $12,500,000 to acquire, construct, install and equip improvements at the Community, including a 24 unit atrium independent apartment building and a community center. In December, 2014, Series 2014 Revenue and Refunding Revenue Bonds were issued in the amount of $33,080,000 for the purpose of refunding both the Series 1998 and Series 2011 Bonds, financing certain improvements (the Project ), funding a debt service reserve fund, and paying a portion of the costs of issuance of the Bonds. 3

4 PROJECT SUMMARY AND UPDATE $6,705,000 in cash was generated from the bond proceeds to acquire, construct, install and equip improvements at the Community, including new buildings which will include an area for our Environmental Services and an employee dining room as well as a 28 unit memory Cognitive Care Center and adult day care. There was a guaranteed maximum price contract in the amount of $681,845 for the Environmental Services/Employee dining building. Construction began in March, 2015 and the Certificate of Occupancy was obtained on October 1, With the opening of the Employee Pavilion, the areas previously used for employee dining and laundry services have been renovated to expand the main kitchen. This phase of renovation had a guaranteed maximum price contract in the amount of $282,000. The construction was completed and the new expanded kitchen area was utilized mid-february, Cognitive Care Center currently has two AIA contracts for construction. The first contract is for site work with a guaranteed maximum price of $577,801, which has been completed. The second contract is for the buildout of the entire shell of the building and completion of Wing 1 which includes fourteen resident rooms, common areas (including a reception area and offices), and adult daycare, with a guaranteed maximum price of $4,786,154. Phase I of the Cognitive Care Center is completed and Certificate of Occupancy was issued for December 15, The license has been received and all fourteen rooms are occupied. The license has also been issued for the Cognitive Care Adult Day Stay program which currently has three daily residents. Due to the high demand for the Cognitive Care Center, the Board of Directors has approved the completion of Phase 2 that includes an additional fourteen resident rooms. A guaranteed maximum price contract of $1,345,700 has been negotiated for the completion of this phase of the building. The anticipated date of occupancy for this phase is July 1, Our last construction project is the renovation of the main kitchen area scheduled to start on May 15 th. The guaranteed maximum price for this contract is $600,000. Construction is expected to take three months to complete. 4

5 MANAGEMENT DISCUSSION & ANALYSIS Marketing Summary: Christwood ended the 1st quarter of 2017 with independent occupancy of 96.27%. There were seven move-ins for first quarter Since the end of March there has been one move-in for April with one move-in currently scheduled for May and two for June. We have three premier apartments and one atrium apartment available for sale with a Watch List of approximately 58 prospective residents. Year-to-Date Occupancy Summary: Independent Living occupied out of 161 compared to a budget of double occupied units compared to a budget of Assisted Living occupied out of 34 total units compared to a budget of 32 Cognitive Care 9.88 occupied out of 14 total units compared to a budget of 9 for first quarter Health Center occupied out of 30 total units compared to a budget of 25 HC by Payer Type Private Pay 5.10 Lifecare 7.52 Medicare 8.14 Managed Care 4.01 Financial Performance: Operating revenue for first quarter 2017 is $4,037,005 and is only under budget $3,230 for the current year and 10% higher than first quarter Expenses for six out of eleven departments were under budget for first quarter Total expenses for first quarter 2017 are $4,101,113 and are over budget by $25,787. This is a 10% increase over total expenses for first quarter Christwood has a net operating loss for the first quarter of $64,108 compared to a budgeted net operating loss of $35,092. Christwood has a year-end net loss of $75 compared to a budgeted net income of $54,757. Christwood has received $3,113,127 in entrance fees for the first quarter and paid out $820,494 in refunds for net entrance fees received of $2,292,633. Net entrance fees budgeted for 2017 first quarter is $1,650,567, leaving a variance of $642,066 over budget. Capital expenditures are $757,002 compared to a budget of $996,792. The variance is due to the timing of capital projects scheduled for the year. Construction Work-in-Progress for first quarter is $98,017. The final payment of funds in the Construction Trust Account was paid out in February, For period ended March 31, 2017, Christwood s cash has increased $16,131. 5

6 OCCUPANCY STATISTICS % Occupied by Service Type - All Care Settings % 95.00% 90.00% 85.00% 80.00% 75.00% 70.00% Independent Assisted Living Skilled Nursing Cognitive Care Units Occupied vs Budget - Independent Actual Budget 6

7 Units Occupied vs Budget - Assisted Living Actual Budget Beds Occupied vs Budget - Skilled Nursing Actual Budget 7

8 FINANCIAL INFORMATION Balance Sheet Unaudited March 31, 2017 and Audited YE December 31, 2016 ASSETS 3/31/ /31/2016 CURRENT ASSETS: Cash and cash equivalents $ 5,164,770 $ 5,054,830 Cash and cash equivalents limited to payment of debt service - 910,000 Accounts receivable, net 1,242,825 1,055,144 Employee advances (365) (4,058) Assets held by others 10,956,864 10,684,104 Prepaid insurance 47, ,350 Prepaid expenses 129, ,525 Total current assets 17,540,717 17,931,895 ASSETS LIMITED AS TO USE: Held by trustee: Cash and cash equivalents 975, ,384 Accrued interest receivable 32,822 36,855 Investments 3,508,440 2,518,477 Total assets limited as to use 4,516,896 3,010,716 PROPERTY AND EQUIPMENT: Land 3,650,250 3,650,250 Land improvements 2,127,327 2,127,327 Buildings and improvements 50,939,690 50,978,814 Furniture and fixtures 2,549,975 2,474,962 Machinery and equipment 2,298,724 2,262,452 Vehicles 508, ,489 Construction in progress 2,140,769 1,399,513 Total property and equipment 64,214,825 63,359,807 Less: accumulated depreciation (17,825,291) (17,356,180) Net property and equipment 46,389,533 46,003,627 OTHER ASSETS: Deposits 3,350 3,350 Total assets $ 68,450,496 $ 66,949,588 8

9 Balance Sheet Unaudited March 31, 2017 and Audited YE December 31, 2016 LIABILITIES AND NET DEFICIT 3/31/ /31/2016 CURRENT LIABILITIES: Accounts payable $ 228,176 $ 414,901 Deposits on unoccupied units 264, ,814 Accrued interest payable 528, ,158 Accrued expenses 206, ,180 Contracts payable - 1,099,722 Compensated absences 268, ,935 Refundable endowment 31, ,494 Refund liabilities 29,994,748 28,321,428 Current portion of long-term debt 910, ,000 Total current liabilities 32,431,937 32,702,632 OTHER LIABILITIES: Long-term debt, less current portion 30,218,980 30,220,149 Deferred revenue from advance fees 18,346,085 17,540,636 Deposits 14,907 14,286 Total other liabilities 48,579,971 47,775,071 Total liabilities 81,011,908 80,477,703 NET DEFICIT: Unrestricted (12,561,412) (13,528,115) Total net deficit (12,561,412) (13,528,115) Total liabilities and net deficit $ 68,450,496 $ 66,949,588 9

10 Statement of Operations Unaudited March 31, 2017 and Audited YE December 31, / /31/2016 CHANGES IN UNRESTRICTED NET DEFICIT: Revenues: Resident services $ 4,028,427 $ 14,828,059 Earned advance fees 603,295 2,603,928 Contributions 39, ,250 Investment income 323, ,782 Other Revues - insurance proceeds - 149,427 (Loss) on disposition of assets 1,000 (429,845) Total revenues 4,995,390 18,041,601 Expenses: Operating expenses 4,131,048 15,644,019 Depreciation and amortization 483,659 1,756,301 Interest expense 380,757 1,565,933 Extraordinary loss on refunding of debt - - Total expenses 4,995,464 18,966,253 (Increase) decrease in unrestricted net deficit (74) (924,652) Foundation Assets beginning of the year 966,777 Net deficit at beginning of year (13,528,115) (12,603,463) Net deficit at end of year $ (12,561,412) $ (13,528,115) 10

11 Statement of Cash Flows Unaudited for March 31, 2017 YEAR-TO-DATE ACTUAL BUDGET VARIANCE OPERATING ACTIVITIES Excess (deficit) revenues over expenses (74) 54,757 (54,831) Add items not requiring the expenditures of cash: Depreciation 469, ,500 31,611 Amortization 14,548 14,550 (2) Less items not resulting in the receipt of cash: Earned entrance fees (603,295) (866,095) 262,800 Change in working capital (1,198,013) 491,541 (1,689,554) NET CASH PROVIDED (USED) BY OPERATIONS (1,317,723) 132,253 (1,449,976) INVESTING ACTIVITIES Capital Additions (855,018) (996,792) 141,774 Purchase of Land Loss/(Gain) from Disposal of Assets NET CASH USED BY INVESTING ACTIVITIES (855,018) (996,792) 141,774 FINANCING ACTIVITIES Bond Principal Payment Bond Premium Discount (15,718) 0 (24,854) Changes in Entrance Fee and Carport Deposits (88,042) 0 (88,042) Net Entrance Fees Received 2,292,633 1,650, ,066 NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 2,188,873 1,650, ,306 INCR(DECR) IN CASH AND CASH EQUIVALENTS 16, ,028 (769,897) Cash and cash equivalents at Beginning of Period 20,589,576 20,589,576 0 CASH & CASH EQUIVALENTS AT END OF PERIOD 20,605,708 21,375,604 (769,897) 11

12 LOAN COVENANTS Unaudited for twelve months ended March 31, 2017 DEBT SERVICE COVERAGE RATIO: INCLUDING NET EXCLUDING NET Funds Available for Debt Service received during the twelve months ended March 31, 2017 ENTRANCE FEES ENTRANCE FEES Decrease in net assets $ 179,128 $ 179,128 Add: Deduct: Entrance fees received in cash (excluding entrance fees paid by the initial residents other than entrance fees paid in respect of the last six independent living units occupied) $ 9,005,327 $ - Unrealized (gains) or losses on marketable securities (785,936) (785,936) (Gains) and losses from disposition of capital assets (1,500) (1,500) Interest expense 1,176,503 1,176,503 Depreciation and amortization 1,793,904 1,793,904 11,188,298 2,182,971 Entrance fees accrued as revenues 2,849,629 2,849,629 Refunds paid 2,242,300-5,091,929 2,849,629 Total Funds Available for Debt Service $ 6,275,497 $ (487,530) Debt Service Requirements for the year ended December 31, 2017 Interest, Principal & Sinking fund requirements for bonds or long-term indebtedness $ 2,494,450 $ 2,494,450 Total Debt Service Requirements $ 2,494,450 $ 2,494,450 Debt Service Coverage Ratio 2.52 (0.20) Required Debt Service Coverage Ratio DAYS CASH ON HAND AS OF MARCH 31, 2017: Unrestricted cash and investments $ 17,130,376 Total cash operating expenses for the period ended March 31, ,481,869 Days Cash on Hand 344 Required Days Cash on Hand

13 HISTORICAL COVENANT RESULTS Debt Service Coverage Ratio Days Cash on Hand YTD ended 3/31/17 Christwood's Days Cash on Hand Bond Requirement =