agenda book oregon facilities authority business meeting · 10/5/2018 · sutcliffe llp ofa...

AGENDA BOOK OREGON FACILITIES AUTHORITY

Business Meeting

October 5, 2018

St. Mary's School 816 Black Oak Drive, Medford, OR 97504

888 SW Fifth Avenue, Suite 1600 Portland, OR 97204

Ph: (503) 802-5710 Fax: (503) 972-7410 · http://oregonfacilities.org/

SUMMARY AGENDA OREGON FACILITIES AUTHORITY

Business Meeting October 5, 2018

1:30 PM – 3:30 PM – OFA Business and Bond Applications St. Mary's School, 816 Black Oak Drive, Medford, Oregon 97504

Tab Item Action

Required 1 Approval of Minutes of August 13, 2018 Yes 2 Consideration of Memorandum of Understanding Between Oregon Facilities

Authority and Oregon State Treasury for Fiscal Year 2019 Yes

Executive Director's Reports No 3 Informational Items No Brief Recess

4 Consideration of Final Approval for the application by La Clinica del Valle

Family Health Care Center, Inc. for an OFA SNAP Loan in an amount not to exceed $4,125,000

Yes

5 Consideration of Conditional Final Approval for the application by

PeaceHealth for an OFA Traditional Bond in an amount not to exceed $230,000,000

Yes

6 Consideration of Preliminary Approval for the application by Friends of the

Child Advocacy Center, dba Kids' FIRST for an OFA SNAP Loan in an approximate amount of $1,815,000

Yes

Other Matters for the Authority No Public Comment No

The meeting is at: St. Mary's School, 816 Black Oak Drive, Medford, OR 97504

To attend by teleconference, Dial-In #: 888-529-0350

Participant Passcode: 503 802 2102

OFA helps nonprofit organizations access lower cost financing for capital projects by facilitating the issuance of tax exempt conduit revenue bonds.

034439/00001/9328724v1

WORKING AGENDA OREGON FACILITIES AUTHORITY

Business Meeting October 5, 2018

1:30 PM – 3:00 PM St. Mary's School, 816 Black Oak Drive

Medford, OR 97504

Tab Discussion and Action Time

Call to Order and Present Notice of Meeting 1:30 1. Approval of Minutes of August 13, 2018 1:30 – 1:35

2. Consideration of Memorandum of Understanding Between Oregon

Facilities Authority and Oregon State Treasury for Fiscal Year 2019

1:35 – 1:45

Executive Director's Reports Bonding Report General Report

1:45 – 2:00

3. Oregon Bond Calendar and Other Items – Informational Only

4. Consideration of Final Approval for the application by La Clinica

del Valle Family Health Care Center, Inc. for an OFA SNAP Loan in an amount not to exceed $4,125,000.

2:00 – 2:20

We will hear from: The Applicant: Ms. Brenda Johnson, CEO and Ms. Jill Borovansky, CFO The Sponsoring Bank: Mr. Darwin Parker, Banner Bank SNAP Loan Counsel: Ms. Carol McCoog, Hawkins Delafield & Wood LLP OFA Executive Director: Ms. Gwendolyn Griffith Recommended action: Approval of Resolution 2018-14, granting final approval to La Clinica del Valle Family Health Care Center, Inc. for an OFA SNAP Loan in an amount not to exceed $4,125,000.

5. Consideration of Conditional Final Approval for the application by

PeaceHealth for an OFA Traditional Bond in an amount not to exceed $230,000,000.

2:20 – 2:45

We will hear from: The Applicant: Ms. Kim Hodgkinson, Executive VP & CFO, and Mr. Jeff Seirer,

System VP Financial Integrity / Controller Applicant's FA: Mr. Eric Jordahl, Kaufman Hall OFA Financial Advisor: Mr. Duncan Brown, PFM Bond Counsel: Mr. Greg Blonde and Mr. Douglas Goe, Orrick Herrington &

Sutcliffe LLP OFA Executive Director: Ms. Gwendolyn Griffith Form of Possible Resolution: Approval of Resolution 2018-15, granting conditional final approval to PeaceHealth for OFA Traditional Bonds an amount not to exceed $230,000,000 and recommending that the State Treasurer consider issuing the Bonds when the conditions have been satisfied. 6. Consideration of Preliminary Approval for the application by

Friends of the Child Advocacy Center, dba Kids' FIRST for an OFA SNAP Loan in an approximate amount of $1,815,000.

2:45 – 3:15

We will hear from: The Applicant: Ms. Sarah Stewart, Executive Director and Ms. Megan Jones,

Finance Director The Sponsoring Bank: Ms. Jamie Louie-Smith, Columbia Bank SNAP Loan Counsel: Ms. Carol McCoog, Hawkins Delafield & Wood LLP OFA Financial Advisor: Mr. Duncan Brown, PFM OFA Executive Director: Ms. Gwendolyn Griffith Recommended action: Approval of Resolution 2018-16, granting preliminary approval to Friends of the Child Advocacy Center dba Kids' FIRST for an OFA SNAP Loan in an approximate amount of $1,815,000.

034439/00001/9313176v2

Oregon Facilities Authority Page 1 of 5

Oregon Facilities Authority

Minutes of Meeting of August 13, 2018

A duly called meeting of the Oregon Facilities Authority ("OFA" or the "Authority") was held on August 13, 2018, commencing at approximately 12:00 p.m. at 888 SW Fifth Avenue, Suite 1600, Portland, Oregon. Authority Members participating in the meeting (in person, unless otherwise indicated) were: Chair Martha McLennan, Vice-Chair Eric Johansen, and Authority Members Beth deHamel, J. Kevin McAuliffe and Roy Kim. Participating in the meeting to assist the Authority were: Gwendolyn Griffith, Executive Director of the Authority; Duncan Brown of PFM, Financial Advisor; Carol McCoog and Jennifer Cordova of Hawkins Delafield & Wood LLP, SNAP Loan and Special Bond Counsel, Michael Schrader of Orrick, Herrington and Sutcliffe LLP, Lead Bond Counsel; Laura Lockwood-McCall and Lee Anaya of the Office of the State Treasurer ("OST"); and Assistant Attorney General Steven Marlowe, Oregon Department of Justice ("DOJ"). Chair Martha McLennan called the meeting to order and presented the notice of meeting. Approval of Minutes The Minutes of the meetings of June 11, July 19 and July 26, 2018, were unanimously approved. Executive Director Reports Ms. Griffith directed the Board's attention to the Bonding Report and General Report, both of which were included with the materials. She reported that the Arco Iris School transaction successfully closed. Mr. Schrader summarized the final road blocks in the transaction and the path to resolving them. Ms. Griffith suggested an out-of-town meeting in the fall in either Medford or Eugene. The Board agreed on Medford and Ms. Pham will communicate with the Board via email to confirm a date in early October. Ms. Jennifer Cordova presented on the purpose and requirements for TEFRA hearings. The Board took a brief recess and reconvened at approximately 1:00 p.m.


Consideration of Final Approval for the application by Northwest Housing Alternatives for an OFA SNAP Loan in an amount not to exceed of $4,400,000. Ms. McLennan declared an actual conflict of interest for this transaction, explaining that she is the Executive Director of the Applicant, Northwest Housing Alternatives, Inc., and she stated that she would neither be participating in the discussion nor voting on this matter. She asked the Vice-Chair, Mr. Johansen, to serve as Chair for this part of the meeting and he agreed to do so. Mr. Stephen McMurtrey, Housing Development Director, appeared on behalf of the Applicant to present the application. Ms. Kathy Swift of Heritage Bank, the sponsoring bank, appeared to assist with the presentation. Ms. Swift described the terms of the financing. The loan will have a ten-year fixed rate, estimated at 4.81%. The loan will have an 80.76% tax factor. Ms. McCoog reported that all issues had been resolved, and the transaction documents were in substantially final form. She recommended the transaction for final approval. The Executive Director's report is included in the materials. Ms. Griffith reported that the preparation for final approval has been as smooth as expected, and she recommended the transaction for final approval. After discussion, Ms. deHamel moved that the Authority adopt Resolution 2018-9, granting final approval to Northwest Housing Alternatives, Inc. for an OFA SNAP Loan in an amount not to exceed $4,400,000. Mr. McAuliffe seconded the motion. Ms. Martha McLennan abstained. Resolution 2018-9 was approved by the remaining four Board members. Mr. Johansen asked that Ms. McLennan resume her role as Chair, and she agreed to do so. Consideration of Conditional Final Approval for the application by Warner Pacific University for an OFA SNAP Loan in an amount not to exceed $5,083,359.44. Ms. Andrea Cook, President, Mr. Steve Stenberg, Advisor to the President, and Mr. Douglas Wade, Vice President of Finance, appeared on behalf of the Applicant to present the application. Mr. Rorie Leone, Vice President, Washington Trust Bank, the sponsoring bank, appeared to assist with the presentation. Mr. Stenberg explained the contract for operation for food service is still outstanding, but that they expect a draft tomorrow and hope to have approval by the end of the week. Mr. Leone summarized the financing terms. The Loan will have an initial five year fixed rate at 4.6%. Ms. Carol McCoog summarized the private use issues with the Sodexo contract. Ms. McCoog shared she expected it to be resolved this week. She reported that all other issues had been


resolved and the documentation was in substantially final form. She recommended the transaction for final approval. The Executive Director's report is included in the materials. Ms. Griffith congratulated the Applicant on its perseverance through its long journey, and she recommended the transaction for final approval. After discussion, Mr. McAuliffe moved that the Authority adopt Resolution 2018-10, granting conditional final approval to Warner Pacific University for an OFA SNAP Loan in an amount not to exceed $5,083,359.44. Mr. Roy Kim seconded the motion and Resolution 2018-10 was unanimously approved. Consideration of Final Approval for the application by Greenhill Humane Society and Society for the Prevention of Cruelty to Animals for an OFA SNAP Loan in an amount not to exceed $2,150,000. Mr. Cary Lieberman, Executive Director, appeared on behalf of the Applicant to present the application. Ms. Jamie Louie-Smith of Columbia Bank, the sponsoring bank, appeared to assist with the presentation. Ms. Louie-Smith announced that construction has commenced, with bank approval, and two draws have already occurred. She summarized the financing terms, reporting that the Loan would have a .7917 tax factor, and will be amortized over 25 years with reset dates at December 1, 2029 and again in 2039. The maturity date is 2044. SNAP Counsel's report is included in the materials. Ms. McCoog reported it has been a smooth transaction and recommended it for final approval. The Executive Director's report is included in the materials. Ms. Griffith reported that closing is expected for the end of the month and recommended the transaction for final approval. After discussion, Mr. Johansen moved that the Authority adopt Resolution 2018-11, granting final approval to Greenhill Humane Society and Society for the Prevention of Cruelty to Animals for an OFA SNAP Loan in an amount not to exceed $2,150,000. Mr. Kim seconded the motion and Resolution 2018-11 was unanimously approved. Consideration of approval for National University of Natural Medicine to use OFA SNAP Bond proceeds for additional projects. Mr. Gerald Bores, Vice President of Finance & Administration, and Mr. David Schleich, President, appeared on behalf of the Applicant to present the proposal. Mr. Gabe Wells of Columbia Bank, the sponsoring bank, appeared by telephone to assist with the presentation. Mr. Bores explained the timeline of events that led to the unused funds and the changing needs of the University. President Schleich updated the Board on the activities of the University.


SNAP Counsel's report is included in the materials. Ms. McCoog explained how the event triggers a tax reissuance and that the plan to return to the Board was recommended in an abundance of caution. Ms. Cordova explained the need for a new TEFRA hearing. Ms. McCoog recommended approval of the Borrower’s request. The Executive Director's report is included in the materials. Ms. Griffith explained that if approval is given, the Board would see NUNM only at this meeting. She recommended approval of the request by the Borrower. After discussion, Mr. Johansen moved that the Authority adopt Resolution 2018-12, granting approval to National University of Natural Medicine for using OFA Bond proceeds for additional projects. Mr. McAuliffe seconded the motion and Resolution 2018-12 was unanimously approved. Consideration of Preliminary Approval for the Application by LaClinica del Valle for an OFA SNAP Loan in an approximate amount of $4,125,000. Ms. Jill Borovansky, Chief Financial Officer, and Brenda Johnson, Chief Executive Officer, appeared on behalf of the Applicant to present the application. Mr. Darwin Parker and Mr. Jim Servoss of Banner Bank, the sponsoring bank, appeared to assist with the presentation. Ms. Johnson summarized the history of the Applicant, and the goals of the Project. Her presentation materials are available upon request. The organization served 30,000 people last year with 374 staff members and 37 dedicated medical providers. The Project will include the acquisition of a building for administrative employees, releasing space in three health centers to allow for expansion of services at each site. Mr. Parker described the terms of the financing. The loan will amortize over 25 years with a 10 year final maturity and a .69 tax factor. SNAP Counsel's report is included in the materials. Ms. McCoog reported a scoping call was held at which no unusual issues were identified. SNAP Counsel will conduct its usual diligence and hold a TEFRA hearing. Ms. McCoog recommended the transaction for preliminary approval. The Financial Advisor's report is included in the materials. Mr. Brown reported on his conversations with the Applicant, and discussed the Applicant's RFP process for selecting a Banner out of six banks that expressed interest. Mr. Brown reported that the application was consistent with his discussions with the Applicant and summarized the key terms of the Loan. The Executive Director's report is included in the materials. Ms. Griffith expects a smooth transaction, and reported that if preliminary approval is given, the financing team would expect to return in October seeking final approval and closing. She recommended the transaction for preliminary approval.


After discussion, Mr. Johansen moved that the Authority adopt Resolution 2018-13, granting preliminary approval to La Clinica del Valle Family Health Care Center, Inc. for an OFA SNAP Loan in an approximate amount of $4,125,000. Mr. McAuliffe seconded the motion, and Resolution 2018-13 was unanimously approved. Ms. McLennan asked for any public comment. There was none. There being no further business to come before the meeting, the meeting was adjourned at approximately 2:50 pm.

___________________________________ Martha McLennan, Chair Gwendolyn Griffith, Executive Director

034439/00001/9322002v3

TOBIAS READSTATE TREASURER

DARREN BONDDEPUTY STATE TREASURER

OREGON STATE TREASURY

September 11, 2018

Memorandum

From: Laura Lockwood-McCall, DirectorDebt Management Division

To: Gwen Griffith, Executive DirectorOregon Facilities Authority

DEBT MANAGEMENT DIVISION

350 WINTER STREET NE, SUITE 100SALEM, OREGON 97301-3896

(503) 378-4930FAX (503) 378-2870

[email protected]

Re: Memorandum of Understanding (MOU) between the Oregon Facilities Authority (OFA)and the Office of the State Treasurer (OST)

We have completed our review of FY 2018 time and costs involved in providing variousaccounting and other administrative oversight services to OFA. Effective July 1, 2018, theadministrative fee charged to OFA will remain the same at Three Thousand Seven Hundred Ten($3,710) per month for fiscal year 2019.

This MOU has an expiration date of June 30, 2019, at which time OST will review and evaluatethe administrative fee for the next fiscal year. However, the parties to this MOU may terminateit by mutual consent with written notice of such termination.

IN WITNESS WHEREOF, Oregon State Treasury and the Oregon Facilities Authority, actingthrough their duly authorized representatives, executed this MOU as of the date set forth above.

OREGON STATE TREASURY OREGON FACILITIES AUTHORITY

LAURA LOCKWOOD-MCCALL GWEN GRIFFITHDIRECTOR, DEBT MANAGEMENT DIVISION EXECUTIVE DIRECTOR

Cc: Lee Anaya, Debt Analyst

W:\Dm\Contracts\OFA\Executive Director\Memorandum of Understanding\MOU - FY 2019\MOU forAdministrative Fee (FY 2019) - Execution Version 2018-09-11(Clean).docx

August 2018

SOLD

BQ

TAX

AMTGeneral Obligation(N) Bonds

2018A Bonds for school district capitalcosts, including renovating andexpanding elementary facilities

Tillamook Cty SD 101(Nestucca Valley)

08/01 Negotiated

$2,927,776

ZERO

06/15/2039

TIC 4.16752%

20.33 1. Piper Jaffray, Inc.2. Mersereau & Shannon LLP3. None

BQ

TAX


2018B Bonds for school district capitalcosts, including renovating andexpanding elementary facilities

Tillamook Cty SD 101(Nestucca Valley)

08/01 Negotiated

$22,770,000

ZERO

06/15/2037

TIC 3.58396%

14.52 1. Piper Jaffray, Inc.2. Mersereau & Shannon LLP3. None

BQ

TAX


2018B Bonds to upgrade and expandschool facilities, improve safety

Linn Cty SD 7J(Harrisburg)

08/07 Negotiated

$6,835,000

ZERO

06/15/2033

TIC 3.05228%

11.22 1. Piper Jaffray, Inc.2. Hawkins, Delafield & Wood3. None

BQ

TAX


2018A Bonds to upgrade and expandschool facilities, improve safety

Linn Cty SD 7J(Harrisburg)

08/07 Negotiated

$2,106,567

ZERO

06/15/2024

TIC 2.59348%


BQ

TAX


2018 Improve existing roads and trafficflow. Refund Series 2005 andSereis 2006 GO Bonds

City Of Tualatin08/08 Negotiated

$23,750,000

ZERO

06/15/2028

TIC 2.42456%


BQ

TAX

AMTRevenue Bonds 2018 C New MoneyOregon Housing &Community ServicesDepartment

08/14 Negotiated

$87,420,000

ZERO

07/01/2049

Fixed 3.7913%

18.41 1. JP Morgan Securities2. Hawkins, Delafield & Wood3. Caine Mitter & Assoc.

BQ

TAX


2018 Capital costs approved atNovember 2017 election

Banks Fire District 1308/21 Negotiated

$4,000,000

ZERO

06/15/2036

ATIC 3.39885%

11.35 1. Piper Jaffray, Inc.2. Mersereau & Shannon LLP3. SDAO Advisory Services LLC

Issuer

Oregon Bond Calendar

Sale Date Sale Type Bond TypeSeries/Par Amount

Maturity/1st Opt. Call

Alternative Minimum TaxBank Qualified

Federally TaxableZero Coupon

1. Underwriter/Purchaser2. Bond Counsel3. Financial Advisor

For Sale Dates from 8/1/2018 to 12/31/2018

Oregon State TreasuryDebt Management Division350 Winter Street NE, Suite 100Salem, OR 97301(503) [email protected]

AverageBond Life/Int. RateProject

1 Printed: 09/19/2018

August 2018

SOLD

BQ

TAX


2018 Improvements to roads, parks, andcity facilities

City Of West Linn08/21 Competitive

$20,000,000

ZERO

06/01/2038

ATIC 3.267%

14.42 1. Mesirow Financial2. Orrick, Herrington & Sutcliffe3. D.A. Davidson & Co.

BQ

TAX

AMTFull Faith & CreditObligations(N)

2018 Financing Agreement and Note,Series 2018

Lane Cty SD 79(Marcola)

08/24 PrivatelyPlaced

$304,000

ZERO

01/30/2025

Fixed 4.83%

3.53 1. Government Capital Corp2. Mersereau & Shannon LLP3. None

BQ

TAX


2018 Replace firefighting equipmentMohawk Valley RFPD08/29 Negotiated

$750,000

ZERO

06/15/2024

Coupon 2.94%

3.42 1. None2. Mersereau & Shannon LLP3. SDAO Advisory Services LLC

BQ

TAX

AMTFull Faith & CreditObligations(S)

2018 Buses and related equipmentClackamas Cty SD 12(North Clackamas)


$1,852,380

ZERO

06/20/2028

Fixed 3.23%

5.29 1. Key Govt. Finance Inc.2. Hawkins, Delafield & Wood3. None

BQ

TAX


2018 Replace existing apparatus,upgrade existing facilities andreplace safety equipment

North Lincoln Fire &Rescue District1

08/30 Negotiated

$6,500,000

ZERO

06/15/2039

TIC 3.36392%

13.59 1. Piper Jaffray, Inc.2. Hawkins, Delafield & Wood3. SDAO Advisory Services LLC

BQ

TAX


2018 Capital costs approved at May2018 election (boat launch,bathrooms, improvements)

Port Of Alsea08/30 Negotiated

$2,660,000

ZERO

06/15/2043

ATIC 4.5548%

16.27 1. Piper Jaffray, Inc.2. Hawkins, Delafield & Wood3. SDAO Advisory Services LLC

BQ

TAX

AMTConduit RevenueBonds

2018 A Expand and remodel currentanimal shelter facilities andconstruct and addition that will beused as a veterinary clinic.

Oregon FacilitiesAuthorityGreenhill HumaneSociety


$2,150,000

ZERO

12/01/2044

4.44%

16.09 1. Columbia State Bank2. Hawkins, Delafield & Wood3. Public Financial Management

Issuer










2 Printed: 09/19/2018

August 2018

SOLD

BQ

TAX


2018 A Refinance a loan that was used torefinance a portion of an existingmortgage obtained to remodel andexpand Egtvedt Hall and McGuireHall and an existing mortgage of astudent housing apartment bldg.

Oregon FacilitiesAuthorityWarner Pacific University


$5,083,359

ZERO

08/31/2028

4.54%

8.23 1. Washington Federal2. Hawkins, Delafield & Wood3. Public Financial Management

BQ

TAX


2018 A Finance the 8-unit Annie RossHouse Shelter for families and anew office headquarters buildingfor staff.

Oregon FacilitiesAuthorityNorthwest HhousingAlthernatives dba EverOnward


$4,400,000

ZERO

09/01/2043

4.81%

15.65 1. Huntington National Bank2. Hawkins, Delafield & Wood3. Public Financial Management

September 2018

POSTPONED

BQ

TAX


2018 D The Fields ApartmentsOregon Housing &Community ServicesDepartment

09/03 Negotiated

$36,600,000

ZERO

1. KeyBanc2. Orrick, Herrington & Sutcliffe3. Caine Mitter & Assoc.

PROPOSED

BQ

TAX


2018 D-2 Willow Creek Crossing ApartmentsOregon Housing &Community ServicesDepartment

09/17 Negotiated

$18,225,000

ZERO

1. KeyBanc2. Orrick, Herrington & Sutcliffe3. Caine Mitter & Assoc.

BQ

TAX

AMTFull Faith & CreditObligations(S)

2018 Airport Helipad Facility FinancingCrook County09/19 Negotiated

$6,000,000

ZERO

1. D.A. Davidson & Co.2. Hawkins, Delafield & Wood3. None

Issuer










3 Printed: 09/19/2018

September 2018

PROPOSED

BQ

TAX


2018 Expansion to Capital Manor CCRCHFA City Of SalemCapital Manor, Inc.

09/26 Negotiated

$36,850,000

ZERO

1. Ziegler Securities2. Orrick, Herrington & Sutcliffe3. None

SOLD

BQ

TAX

AMTRevenue Bonds 2018 Sheldon Village ApartmentsLane Cty HousingAuthority


$3,841,000

ZERO

09/01/2037

Fixed 4.75%

15.61 1. Banner Bank2. Pacifica Law Group3. None

November 2018

PROPOSED

BQ

TAX

AMTFull Faith & CreditObligations(N)

2018 The Bonds are being issued tofinance all or a portion of theDistrict’s unfunded actuarial liability(the “UAL”) with the Oregon PublicEmployees Retirement System(“PERS”)

Portland CommunityCollege

11/06 Negotiated

$200,000,000

ZERO

1. Piper Jaffray, Inc.2. Hawkins, Delafield & Wood3. None

BQ

TAX

AMTGeneral Obligation(S) Bonds

102 Refunding of Series 90AOregon Department ofVeterans' Affairs

11/26 Negotiated

$4,435,000

ZERO

1. To Be Determined2. Hawkins, Delafield & Wood3. Caine Mitter & Assoc.

BQ

TAX

AMTGeneral Obligation(S) Bonds

103 New MoneyOregon Department ofVeterans' Affairs

11/26 Negotiated

$40,000,000

ZERO

1. To Be Determined2. Hawkins, Delafield & Wood3. Caine Mitter & Assoc.

The State of Oregon Office of the Treasurer maintains debt information to assist in debt related matters. The data is based on information obtained from sources believed to be reliable; however, its accuracy cannot be guaranteed. The Officeof the State Treasurer does not independently verify the information received. The State of Oregon is not responsible for the accuracy, completeness or timeliness of the information obtained and the data presented and disclaims any liabilityfor or obligation to bond owners or others concerning the accuracy, completeness or timeliness of the data and information presented.

If you have questions about the Oregon Bond Calendar, please contact the Debt Management Division at 503-378-4930 or [email protected]. If you would like this material provided in an alternative format, please contact the Treasurer'sOffice Americans with Disabilities Act Coordinator at 503-378-4552.

Negotiated sales may occur any day of the week when the sale date is indicated as a Monday.Issues are Listed as 'Proposed' until sale results are reported.AID = Any Interest DateNeg = Negotiated SaleCom = Competitive SalePri = Private Placement SaleAMT = Subject to Alternative Minimum TaxBQ = Bank QualifiedTAX = Federally TaxableZERO = Zero Coupon or Deferred Interest Bonds

Full Faith & Credit Obligation(N) = Non Self-Supporting - bonds repaid by non-project revenues - not property-tax backedFull Faith & Credit Obligation(S) = Self-Supporting - bonds repaid by project revenues - not property-tax backedGeneral Obligation(N) = Non Self-Supporting - bonds repaid & secured by ad valorem property taxes levied outside the limits of Article XI 11bGeneral Obligation(S) = Self-Supporting - bonds 100% repaid by project revenues, and secured by ad valorem property-taxes.

The purpose categories are defined as follows:

1. Development: industrial development, economic development, non-government office buildings, urban renewal.2. Education: primary and secondary education, higher education, student loans.3. Electric power: public power utilities.4. Environmental Facilities: solid waste disposal, resource recovery, pollution control, recycling.5. Health Care: hospitals, nursing homes, life-care communities.6. Housing: single-family and multi-family housing.7. Public Facilities: government buildings, fire and police stations, jails and prisons, civic and convention centers, museums, libraries, stadiums and sports complexes, theaters, parks, zoos, beaches, other recreation.8. Transportation: airports, seaports and marine terminals, toll roads, highways and streets, bridges, tunnels, parking facilities, mass transit.9. Utilities: water and sewer, gas, flood control, sanitation, combined utilities, miscellaneous utilities.10. General Purpose: general purpose, veterans (other than housing), agriculture, unknown.

Bond Index Election Schedule

Issuer










4 Printed: 09/19/2018

http://www.oregon.gov/treasury/Divisions/DebtManagement/Documents/MDAC/Bond%20Index.pdf

http://www.oregon.gov/treasury/Divisions/DebtManagement/Documents/MDAC/Elections%20For%20Web%20Posting.pdf

Issuer










The State of Oregon Office of the Treasurer maintains debt information to assist in debt related matters. The data is based on information obtained from sources believed to be reliable; however, its accuracy cannot be guaranteed. The Officeof the State Treasurer does not independently verify the information received. The State of Oregon is not responsible for the accuracy, completeness or timeliness of the information obtained and the data presented and disclaims any liabilityfor or obligation to bond owners or others concerning the accuracy, completeness or timeliness of the data and information presented.

If you have questions about the Oregon Bond Calendar, please contact the Debt Management Division at 503-378-4930 or [email protected]. If you would like this material provided in an alternative format, please contact the Treasurer'sOffice Americans with Disabilities Act Coordinator at 503-378-4552.

Negotiated sales may occur any day of the week when the sale date is indicated as a Monday.Issues are Listed as 'Proposed' until sale results are reported.AID = Any Interest DateNeg = Negotiated SaleCom = Competitive SalePri = Private Placement SaleAMT = Subject to Alternative Minimum TaxBQ = Bank QualifiedTAX = Federally TaxableZERO = Zero Coupon or Deferred Interest Bonds

Full Faith & Credit Obligation(N) = Non Self-Supporting - bonds repaid by non-project revenues - not property-tax backedFull Faith & Credit Obligation(S) = Self-Supporting - bonds repaid by project revenues - not property-tax backedGeneral Obligation(N) = Non Self-Supporting - bonds repaid & secured by ad valorem property taxes levied outside the limits of Article XI 11bGeneral Obligation(S) = Self-Supporting - bonds 100% repaid by project revenues, and secured by ad valorem property-taxes.

The purpose categories are defined as follows:

1. Development: industrial development, economic development, non-government office buildings, urban renewal.2. Education: primary and secondary education, higher education, student loans.3. Electric power: public power utilities.4. Environmental Facilities: solid waste disposal, resource recovery, pollution control, recycling.5. Health Care: hospitals, nursing homes, life-care communities.6. Housing: single-family and multi-family housing.7. Public Facilities: government buildings, fire and police stations, jails and prisons, civic and convention centers, museums, libraries, stadiums and sports complexes, theaters, parks, zoos, beaches, other recreation.8. Transportation: airports, seaports and marine terminals, toll roads, highways and streets, bridges, tunnels, parking facilities, mass transit.9. Utilities: water and sewer, gas, flood control, sanitation, combined utilities, miscellaneous utilities.10. General Purpose: general purpose, veterans (other than housing), agriculture, unknown.

5 Printed: 09/19/2018

Growth surges in the second quarter, but will it last amid trade wars, a slowing housing market and more Federal Reserve (Fed) rate hikes?

Economic Highlights• The first estimate for second-quarter gross domestic

product (GDP) growth breached 4% for the first time since the third quarter of 2014. A strong rebound in consumer spending, sustained business investment, strong federal government defense spending and a surge in exports (in large part due to accelerated soybean exports to China ahead of tariffs) boosted economic expansion to a 4.1% annual rate.

• The trade war expanded as the Trump administration continues to threaten significant increases in tariffs on imports, the latest iteration being an increase from 10% to 25% on $200 billion of Chinese imports. Not unexpectedly, China threatened retaliatory countermeasures.

• As expected, the Federal Open Market Committee (FOMC) left rates unchanged at its August 1 meeting. However, the post-meeting statement confirmed a likely September rate hike with more hikes to follow. The Fed upgraded its assessment of U.S. economic activity and household spending to “strong.”

• Across the pond, Eurozone GDP slowed further in the second quarter after a weak first quarter. Rising inflation, falling consumer sentiment and a strengthening U.S. dollar (USD) weighed on consumer spending in the region. In a surprisingly unanimous decision, the Bank of England raised its benchmark interest rate for only the second time in a decade, as inflation worries trumped concerns about Brexit.

• U.S. employment conditions remain positive. Despite headline job growth that missed expectations in July (157,000 versus 193,000), upward revisions to prior months make a 215,000 monthly average pace this year and confirm a robust labor market. The unemployment rate ticked lower to 3.9% in July, while average hourly earnings held steady at 2.7% year over year (YoY).

• Robust consumer spending contributed to building price pressures in the U.S. The consumer price index (CPI) rose 2.9% in the 12 months ending in June versus just 1.6% a year ago. The core personal consumption expenditures (PCE) price index – the Fed’s favorite inflation measure – rose modestly in June to 1.9% YoY. Expectations remain anchored around the Fed’s 2% target.

Bond Markets• U.S. Treasury yields kicked off the third quarter by increasing

across all maturities. The two-year Treasury rose the most, increasing by 14 basis points (bps) (0.14%) from 2.53% to 2.67% over the month. The yield curve remained near its flattest level in more than a decade.

• For total return investors, shorter-term maturities generally did better in July, as higher yields pushed the majority of Treasury benchmarks negative for the month (the exceptions being the shortest indices). For example, the three-month and 12-month Treasury indices returned 0.16% and 0.13%, respectively. Meanwhile, the three-year, 10-year and 30-year constant maturity Treasury indices fell 0.18%, 0.72% and 1.65%, respectively.

• Investment-grade credit spreads narrowed during July, benefiting returns in the corporate sector.

• Mortgage-backed securities (MBS) returns also outperformed Treasury benchmarks, though by smaller amounts, helped by low market volatility.

Municipal Bond Market• Municipal new issuance increased YoY in July for the first

time in 2018, with an 8.1% jump in municipal bond sales to $27 billion from $25 billion the same month last year. Year-to-date (YTD) municipal issuance is still down 15.2% to $191.7 billion in the first seven months of 2018 from $226 billion during the same period last year, according to the Municipal Market Monitor (TM3) data.

• July brought positive bond flows throughout the month, with inflows totaling $3.8 billion, following June's net inflows of $2.2 billion, according to Investment Company Institute (ICI) data.

• The Municipal Market Data (MMD) Index curve experienced falling rates across the front and intermediate parts of the curve in July. The one-year rate declined two bps to 1.47%, while the three-year rate dropped three bps to 1.76%. The five-year rate fell two bps to 1.97%, and the 10-year rate also dipped one bp to 2.45%. On the long end, the 30-year rate climbed seven bps to 3.01%, according to TM3 data.

• The 10-year MMD Single-A General Obligation (GO) Index credit spreads and Double-A GO Index credit spreads tightened one bp to 47 and 17 bps, respectively, according to TM3 data.

• In July, Municipal/Treasury ratios decreased throughout the yield curve. The two-year ratio fell to 60.7% from 64.8% in June, and the five-year ratio declined to 69.2% from 72.9% last month. The intermediate-term ratio decreased to 74.9% from 79.1% in June, while the 10-year ratio dropped to 82.7% from 86.3% last month. The 30-year ratio also fell to 97.6% from 98.3% last month, according to TM3 data.

• The Municipal curve saw steepening in July, with the AAA MMD two- through 10-year slope ending at 83 bps, slightly wider than last month’s 82 bps. The slope between the AAA MMD two- through 30-year widened to 139 bps from June’s 130 bps.

Municipal Bond | August 2018

Monthly Market Review

Current 1 Week Ago 1 Month Ago 1 Year Ago 1 Week Ago 1 Month Ago 1 Year Ago

7/31/2018 7/24/2018 6/29/2018 7/31/2017 7/24/2018 6/29/2018 7/31/2017

2-Year 1.62 1.59 1.64 0.94 2-Year 3 -2 68 2-Year 1.62% 2.67% 1.84

3-Year 1.76 1.73 1.79 1.03 3-Year 3 -3 73 3-Year 1.76% 2.77% 1.94

5-Year 1.97 1.94 1.99 1.21 5-Year 3 -2 76 5-Year 1.97% 2.85% 2.05

7-Year 2.19 2.17 2.23 1.50 7-Year 2 -4 69 7-Year 2.19% 2.93% 2.14

10-Year 2.45 2.43 2.46 1.95 10-Year 2 -1 50 10-Year 2.45% 2.96% 2.24

30-Year 3.01 2.98 2.94 2.74 30-Year 3 7 27 30-Year 3.01% 3.08% 2.49

MMD AAA GO Curve MMD Rates Over Time

2018 Cumulative Issuance

Weekly Mutual Fund Inflows (Outflows) 30-Day Visible Municipal Supply

Date Time Statistic Date Time Statistic Date Time Statistic08/14/18 06:00 AM 08/16/18 09:45 AM 08/27/18 08:30 AM08/14/18 08:30 AM Import Price Index MoM 08/16/18 09:45 AM Bloomberg Consumer Comfort 08/27/18 10:30 AM08/14/18 08:30 AM Export Price Index MoM 08/17/18 10:00 AM Leading Index 08/28/18 08:30 AM08/15/18 08:30 AM Nonfarm Productivity 08/17/18 10:00 AM U. of Mich. Current Conditions 08/28/18 08:30 AM08/15/18 08:30 AM Empire Manufacturing 08/17/18 10:00 AM U. of Mich. Expectations 08/28/18 08:30 AM08/15/18 08:30 AM Retail Sales Advance MoM 08/22/18 07:00 AM MBA Mortgage Applications 08/28/18 09:00 AM08/15/18 08:30 AM Unit Labor Costs 08/22/18 02:00 PM FOMC Meeting Minutes 08/28/18 10:00 AM08/15/18 09:15 AM Industrial Production MoM 08/23/18 08:30 AM Initial Jobless Claims 08/28/18 10:00 AM08/15/18 09:15 AM Capacity Utilization 08/23/18 09:00 AM FHFA House Price Index MoM 08/29/18 07:00 AM08/15/18 10:00 AM Business Inventories 08/23/18 09:45 AM Bloomberg Consumer Comfort 08/29/18 08:30 AM08/15/18 10:00 AM NAHB Housing Market Index 08/23/18 09:45 AM Markit US Manufacturing PMI 08/29/18 08:30 AM08/15/18 04:00 PM Total Net TIC Flows 08/23/18 09:45 AM Markit US Services PMI 08/29/18 08:30 AM08/16/18 08:30 AM Philadelphia Fed Business Outlook 08/23/18 10:00 AM New Home Sales 08/30/18 08:30 AM08/16/18 08:30 AM Initial Jobless Claims 08/23/18 11:00 AM Kansas City Fed Manf. Activity 08/31/18 10:00 AM08/16/18 08:30 AM Building Permits 08/24/18 08:30 AM Durable Goods Orders 08/31/18 10:00 AM

Sources: Bloomberg, Thomson Reuters and ICI. Unless otherwise noted, all data is presented as of July 31, 2018.

© PFM Financial Advisors LLC

Economic Calendar

NFIB Small Business Optimism Bloomberg Economic Expectations

S&P CoreLogic CS 20-City MoM SA

Chicago Fed Nat Activity IndexDallas Fed Manf. Activity

Spot Rates Change in Spot Rate (basis points) Market Rates

Term MMD AAA GO U.S. Treasury Muni Swap Rate

The views expressed constitute the perspective of PFM’s financial advisory business at the time of distribution and are subject to change. The content is based on sources generally believed to be reliable and available to the public; however, PFM cannot guarantee its accuracy, completeness or suitability. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation. PFM is the marketing name for a group of affiliated companies providing a range of services. All services are provided through separate agreements with each company. Financial advisory services are provided by PFM Financial Advisors LLC and Public Financial Management, Inc. Both are registered municipal advisors with the Securities and Exchange Commission (SEC) and the Municipal Securities Rulemaking Board (MSRB) under the Dodd-Frank Act of 2010. For more information regarding PFM’s services or entities, please visit www.pfm.com.

Personal ConsumptionGDP Price IndexPCE Core YoYU. of Mich. Current ConditionsU. of Mich. Expectations

Richmond Fed Manufact. IndexConf. Board Consumer ConfidenceMBA Mortgage ApplicationsGDP Annualized QoQ

Advance Goods Trade BalanceWholesale Inventories MoMRetail Inventories MoM

0.0%

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GWENDOLYN GRIFFITH EXECUTIVE DIRECTOR JESSICA MORGAN ASSOCIATE EXECUTIVE DIRECTOR NIKKI PHAM EXECUTIVE ASSISTANT

OREGON FACILITIES AUTHORITY

1600 PIONEER TOWER 888 SW FIFTH AVENUE

PORTLAND, OREGON 97204 PHONE: (503) 802-5710

EMAIL: [email protected]

MEMORANDUM

To: Martha McLennan, Chair Eric Johansen, Vice-Chair Kevin McAuliffe, Authority Member Beth deHamel, Authority Member Sean Hubert, Authority Member Allyson Anderson, Authority Member Roy Kim, Authority Member

From: Gwendolyn Griffith

Date: September 27, 2018

Subject: Application by La Clinica del Valle Family Health Care Center, Inc. At its meeting on August 13, 2018, the Authority approved Resolution 2018-13 granting La Clinica del Valle Family Health Care Center, Inc. (the "Applicant"), located in Medford, Oregon, preliminary approval for SNAP Loan financing in an approximate amount of $4,125,000. Since that time, SNAP Counsel has confirmed that the Applicant qualifies for financing through OFA, and the Project also qualifies under OFA's statute and administrative rules. This is the Applicant's first OFA financing. The Sponsoring Bank is Banner Bank. The Applicant provides comprehensive primary and preventive medical and dental care, as well as integrated behavioral health care, prenatal care, and gynecological care. The Applicant is a federally qualified health center. It serves approximately 30,000 patients, primarily in Jackson County. In July, 2018, the Applicant purchased a new facility, which was financed through a taxable loan made by Banner Bank. This application is to allow the refinancing of that loan into a nontaxable SNAP Loan. The building is located at 931 Chevy Way, Medford, and the Applicant is currently remodeling the building. The building will allow the Applicant to expand clinical services and increase the number of patients served by approximately 8.2%, improve the efficiency in its use of space, and create learning spaces for staff and community members to improve skills and collaborate on specific health improvement efforts.

Memorandum September 27, 2018 Page 2

The financing team has been working diligently on the transaction. No unusual issues have been encountered. SNAP Counsel informs me that the documents are in substantially final form. The Applicant and Bank hope to close the financing prior to the end of October, 2018. SNAP Loan Counsel's Report is included in the materials. Ms. McCoog recommends the transaction for final approval. Recommendation: I recommend that the Authority adopt Resolution 2018-14, granting to La Clinica del Valle Family Health Care Center, Inc., final approval for an OFA SNAP Loan in the approximate amount of $4,125,000 and recommending to the State Treasurer that he consider closing the transaction. If you have any questions, please let me know. GG/np

034439/00233/9336504v1

3139177.1 042824 CORR

M E M O R A N D U M

TO: Members of the Oregon Facilities Authority Gwendolyn Griffith, Executive Director

FROM: Carol J. McCoog Jennifer B. Córdova

Gulgun U. Mersereau DATE: September 24, 2018

RE: La Clinica del Valle Family Health Care Center SNAP Loan La Clinica del Valle Family Health Care Center, Inc. (the “Borrower”), an Oregon nonprofit public benefit corporation and a 501(c)(3) organization, is seeking final approval for the issuance of an Oregon Facilities Authority SNAP Loan in the maximum principal amount of $4,125,000 (the “SNAP Loan”).

Background

The Borrower will use the SNAP Loan proceeds finance the acquisition of a building to house central support staff and the Center for Learning and Innovation. The Borrower will obtain financing through Banner Bank (the “Bank”) with a 10-year, fixed rate loan amortized over 25 years.

Issues Since Preliminary Approval

We have completed our tax due diligence and are comfortable with the Borrower’s 501(c)(3) designation. Borrower’s counsel is prepared to deliver the appropriate opinions.

We have completed our tax due diligence on the uses of the facilities being improved through the SNAP Loan and based on Borrower’s representations, we do not believe that there will be private business use or unrelated trade or business that will exceed the IRS limitations.

Bank documents, borrower’s counsel opinion, and SNAP loan documents are in substantially final form.

Recommendation

Based on our review of this transaction and documents, we recommend Borrower for final approval of the SNAP Loan. Parties anticipate closing of the SNAP Loan on October 31.

Approving Resolution – La Clinica del Valle Page 1

034439/00233/9329450v1


Resolution No. 2018-14 Adopted: October 5, 2018

A resolution of the Oregon Facilities Authority conditionally recommending that the State Treasurer issue a small nonprofit accelerated program (SNAP) loan to finance or refinance the La Clinica del Valle Family Health Care Center, Inc. projects as described herein, and authorizing and determining other matters with respect thereto.

WHEREAS, the Oregon Facilities Authority, a body politic and corporate duly created and existing under the laws of the State of Oregon (the “Authority”) is authorized and empowered by the provisions of ORS Chapter 289, as amended (the “Act”), to recommend to the State Treasurer the issuance of revenue bonds, as defined in ORS 289.005(1)(b), for the purpose of financing or refinancing the acquisition, construction and equipping of “projects” as defined in the Act, and the loaning of the proceeds of such revenue bonds to participating institutions in connection therewith; and

WHEREAS, La Clinica del Valle Family Health Care Center, Inc., an Oregon nonprofit corporation and a 501(c)(3) organization (the “Participating Institution”), has filed with the Authority a substantially complete application to finance the acquisition of a building to house central support staff and the Center for Learning and Innovation (all of the foregoing being herein collectively called, the “Project”); and

WHEREAS, in said application the Participating Institution requested that the Authority consider recommending that the State Treasurer issue a small nonprofit accelerated program (“SNAP”) loan under the Act in an approximate principal amount of $4,125,000 (the “Loan”), and to lend the proceeds of that Loan to the Participating Institution for the purposes described above; and

WHEREAS, the Authority, in its Resolution No. 2018-13 adopted on August 13, 2018 (the “Initial Resolution”), recommended that the State Treasurer indicate his intent to issue the Loan on behalf of the Participating Institution to finance or refinance the Project as requested, and the State Treasurer expressed his intent to issue the Loan for such purposes; and

WHEREAS, the Participating Institution and Columbia Bank (the “Bank”), as expected SNAP lender, have agreed on the terms of the Loan. The Participating Institution and the Bank


034439/00233/9329450v1

have requested that the Loan be issued in accordance with the Authority’s SNAP loan financing agreement in a maximum principal amount of $4,125,000, and are ready to proceed expeditiously with the issuance of the Loan;

NOW, THEREFORE, be it resolved by the members of the Authority as follows:

Section 1. Compliance with Administrative Rules. The Authority hereby finds and determines the following:

(i) In reliance upon the advice of the Authority’s counsel for its SNAP revenue loan program and its financial advisor, the Executive Director has determined that all legal requirements and other requirements for the issuance of the Loan to refinance or finance the Project have been met or will be met prior to the issuance of the Loan, including but not limited to the fulfillment of any terms or conditions set forth in the Initial Resolution and the Preliminary Agreement approved thereby; and

(ii) Substantially final forms of the SNAP Revenue Loan Financing Agreement and the other operative documents described in OAR 172-005-0040 relating to the Loan have been placed on file with the Executive Director of the Authority and are available for inspection by members of the public.

Therefore, the requirements of the administrative rules adopted by the Authority pursuant to the Act (the “Administrative Rules”) have been met insofar as such requirements relate to the matters referred to in (i) and (ii) above and to the extent such requirements must be met as a condition precedent to the adoption of this resolution by the Authority.

Section 2. Recommendation to Issue SNAP Loan. The Authority hereby recommends that the State Treasurer issue the Loan under the Act in the aggregate principal amount of not to exceed $4,125,000, and lend the proceeds of the Loan to the Participating Institution for the purposes described herein.

Section 3. Effectiveness; Conflicting Resolutions. This Resolution shall be effective immediately upon its adoption. All resolutions of the Authority and parts thereof which are in conflict with the terms of this Resolution shall be, and they hereby are, rescinded, but only to the extent of such conflict.


034439/00233/9329450v1

Certification of Resolution

The undersigned does hereby certify that I am the duly appointed, qualified and acting Executive Director of the Oregon Facilities Authority; that the foregoing is a true and complete copy of Resolution No. 2018-14 as adopted by said Authority at a meeting duly called and held in accordance with law on October 5, 2018; and that the following members of the Authority voted in favor of said Resolution:

the following members of the Authority voted against said Resolution:

and the following members of the Authority abstained from voting on said Resolution:

In witness whereof, the undersigned has hereunto set her hand as of this 5th day of October, 2018. Gwendolyn Griffith, Executive Director


OREGON FACILITIES AUTHORITY 888 SW FIFTH AVENUE, SUITE 1600



MEMORANDUM



Date: September 26, 2018

Subject: Application by PeaceHealth for Refunding of Bonds

PeaceHealth (the “Applicant”) has made a timely application for OFA financing in the Traditional Program in an amount not to exceed $230,000,000. The Applicant is a familiar institution to OFA and this is its 10th financing through OFA. The Applicant is requesting conditional final approval. Disclosure: The law firm of Tonkon Torp LLP, in which I am a partner, is performing immigration- related legal work for the Applicant. I am not involved in that work. Under the state ethics rules, this creates a conflict of interest for me, which I have disclosed to OST. I will not be advising the Board by providing any recommendation on this issuance due to this conflict. I have, under instruction from OST, processed this transaction in the usual course, and this memorandum describes the Applicant’s request for conditional final approval. The Project is the refinancing of OFA bonds that were issued in 2008 and 2011. All of these bonds were issued for projects that qualified for OFA financing, according to the opinion letters obtained at the time. This transaction is intended close in two parts: one in October and one in December. It is part of a larger transaction that includes the issuance of nontaxable bonds in Washington as well as the issuance of taxable debt. The Applicant is seeking the required credit ratings, and I understand that these are expected shortly. The 2011 Bonds will be directly placed with a bank. The 2008 bonds will be publicly sold in variable rate mode, and will be backed by a letter of credit.


The financing team has been working diligently on the transaction. Lead Bond Counsel Doug Goe and Greg Blonde have informed me that no unanticipated problems were encountered and that most of the required documents are in substantially final form. He further informs me that no business issues remain to be addressed. The required TEFRA hearing is scheduled for October 10, 2018 at 4:00 P.M. at the Office of the State Treasurer. Bond Counsel's Report is included in the materials. Orrick, Herrington & Sutcliffe LLP recommends the transaction for conditional final approval. The Financial Advisor's Report is included in the materials. Mr. Brown confirms that the transaction meets the requirements for conditional final approval, pending the Applicant obtaining the required credit ratings. Recommendation: As noted above, I will not be making a recommendation on this transaction. If you have any questions, please let me know. GG/np

034439/00236/9336496v1

PFMFinancialAdvisorsLLC,650NEHolladayStreet,Suite1600,Portland,OR97232

September 21, 2018

Preliminary Report PeaceHealth

This report has been prepared for the Oregon Facilities Authority’s preliminary consideration of the application submitted by PeaceHealth to refund, on a current basis, its 2008A, 2008B, and 2011A bonds. The proposed refunding par is currently estimated at $230,000,000.

History and Financial Performance PeaceHealth has issued bonds through the Oregon Facilities Authority as recently as 2013. As an organization, PeaceHealth operates in Oregon, Washington, and Alaska. Organizationally, PeaceHealth is organized into three networks: Northwest, Columbia, and Oregon West. PeaceHealth’s largest market is in the Eugene/Springfield area.

PeaceHealth has recognized positive income from operations and an increase in unrestricted net assets in fiscal years 2018, 2017, and 2015. (In fiscal year 2016, the organization saw a decrease in unrestricted net assets, largely driven by an increase in its pension liability and unrealized losses on interest rate swaps.) The organization prepares detailed financial statements and has received clean audit opinions in each of fiscal years 2015, 2016, and 2017 (Unaudited fiscal year 2018 financial statements are included in PeaceHealth’s application; audited financial statements are expected to be available prior to the October meeting).

S&P Global Ratings assigns a rating of “A” to PeaceHealth. Fitch Ratings assigns a rating of “A+.” Both ratings were affirmed in October 2017 and carry a “stable” outlook. PeaceHealth and its advisors anticipate affirmation of long-term ratings in late September or early October.

The Financing The proposed financing will be a refunding of outstanding debt previously issued through the Authority. The proceeds of this debt were used primarily to fund the construction of PeaceHealth’s “RiverBend” facility in Springfield, as well as projects at other Oregon facilities (in Eugene, Cottage Grove, and Florence).

The 2011A Bonds were originally issued as a direct placement with U.S. Bank. The proposed refunding will be a direct placement with Bank of America Public Capital Corp., with an interest rate based on 80% of one-month LIBOR plus a credit spread. The refunding bonds will have a

Preliminary Report – PeaceHealth – Page 2

PFMFinancialAdvisorsLLC,650NEHolladayStreet,Suite1600,Portland,OR97232

10-year term and maintain an amortization schedule consistent with a 2047 final maturity. While this refunding will not result in debt service savings, it will limit renewal risk and provide additional certainty regarding the financing for the next ten years.

The 2008A and 2008B Bonds will be refunded with new variable rate demand bonds, consistent with the structure of the 2008 bonds. The new bonds will utilize Citi as remarketing agent and new direct-pay letters of credit from U.S. Bank and TD Bank. The refunding is anticipated to result in savings of approximately $400,000 annually.

PeaceHealth has retained Kaufmann Hall as its Municipal Advisor. PeaceHealth selected other members of its financing team (remarketing agent, letter of credit banks, and direct-purchase bank) through competitive RFP processes.

PeaceHealth has requested conditional final approval at the October meeting. Based on prior Authority experience with PeaceHealth, the straightforward nature of the refunding transactions, and our review of the application, we believe the application meets the requirements for conditional final approval, subject to the affirmation of credit ratings at the anticipated levels. If you have any questions regarding this review, I will be present at the October meeting.

For PFM Financial Advisors LLC

A. Duncan Brown

ORRICK, HERRINGTON & SUTCLIFFE LLP

1120 NW COUCH, SUITE 200

PORTLAND, OREGON 97209

tel 503-943-4800 fax 503-943-4801

WWW.ORRICK.COM

M E M O R A N D U M

TO: Members of the Oregon Facilities Authority Gwendolyn Griffith Executive Director

FROM: Douglas E. Goe and Gregory A. Blonde

DATE: September 28, 2018

RE: Conditional Final Approval for PeaceHealth Bond Financing through the Oregon Facilities Authority

Overview.

PeaceHealth, a Washington nonprofit corporation authorized to do business in the State of Oregon (“PeaceHealth”), is requesting approval from the Oregon Facilities Authority (the “Authority”) for the issuance of conduit revenue refunding bonds, in one or more series, in an aggregate principal amount of not to exceed $230,000,000 (collectively, the “Bonds”). Bond proceeds will be used for the following purposes: (i) to refund, in whole or in part, outstanding bonds, including the State of Oregon – Oregon Facilities Authority Revenue Bonds (PeaceHealth), 2008 Series A (the “2008A Bonds”), the State of Oregon – Oregon Facilities Authority Refunding Revenue Bonds (PeaceHealth), 2008 Series B (the “2008B Bonds” and together with the 2008A Bonds, the “2008 Bonds”) and the outstanding State of Oregon – Oregon Facilities Authority Refunding Revenue Bonds (PeaceHealth), 2011 Series A (the “2011A Bonds” and together with the 2008 Bonds, the “Refunded Bonds”), which originally financed and refinanced capital projects owned and used by PeaceHealth at its hospital and health care facilities in the State of Oregon (the “State”), (ii) to fund one or more debt service reserve funds, if deemed necessary, and (iii) to pay costs of issuing the Bonds.

The portion of the Bonds that will refund the 2008 Bonds are expected to be marketed and sold by Citigroup Global Markets Inc. in a negotiated public offering, and will bear interest at a variable interest rate (daily or weekly mode), and will be supported by letters of credit issued by U.S. Bank National Association and TD Bank.

The remaining portion of the Bonds that will refund the 2011A Bonds are expected to be purchased directly by Banc of America Public Capital Corp in a direct placement, and will bear interest at a variable interest rate based on LIBOR.

The Bonds are expected to have investment grade ratings from S&P Global Ratings and Fitch.

PeaceHealth 2018 Financing Bond Counsel Recommendation September 28, 2018 Page 2

In addition to the Bonds, PeaceHealth expects to directly issue federally taxable bonds for the purpose of financing certain capital projects at its hospital and health care facilities in the State, and to refund certain obligations, including the possibility of the State of Oregon – Oregon Facilities Authority Revenue Bonds (PeaceHealth), 2009 Series A (the “2009A Bonds”).

Payments with respect to the Bonds will be secured by Notes issued pursuant to PeaceHealth’s Master Trust Indenture on a parity basis with PeaceHealth’s other Master Trust Indenture debt.

At this time, PeaceHealth has two issues of outstanding revenue bonds that are under audit by the Internal Revenue Service (“IRS”), including the 2011A Bonds. The initial audit responses have been submitted to the IRS, and Orrick understands that these are random audits, and expects a favorable outcome. PeaceHealth will proceed with the expected refunding of the 2011A Bonds while the audit is in process.

Discussion of Open Items and Next Steps.

Initial drafts of the bond indentures, loan agreements and other documents and agreements (the “Bond Documents”) are currently in the process of being drafted and are deemed to be in substantially final forms. Drafts of the Preliminary Official Statement, PeaceHealth’s Appendix A, the Bond Purchase Agreement, the supplements to the Master Trust Indenture and the bank documents are also in process and have been circulated to the working group. In our role as bond counsel to the State, we expect to perform our standard tax and general due diligence review, which is in process. This review will be a bring-down of the due diligence review conducted in connection with the bonds issued by the State on behalf of PeaceHealth in 2014, and supplements the due diligence recently completed in connection with the IRS audits. No material issues are expected in connection with the due diligence review. If our final review reveals any issues or material concerns, however, we will alert the Authority’s Executive Director.

Recommendation.

As Bond Counsel to the Authority, we recommend that the Board grant conditional final approval of PeaceHealth’s application for the issuance of the Bonds through the Authority, with authority delegated to the Treasurer’s office to confirm all conditions to the sale and issuance of the Bonds have been satisfied. The final approval for issuance of the Bonds remains subject to several conditions set forth in the Resolution, including without limitation, delivery of final Bond Documents, receipt of two investment grade ratings, and finding that no material issues have arisen with respect to the Bonds. We would be happy to answer any questions Members of the Authority may have with respect to the proposed financing.

4129-4324-9687

RESOLUTION – PEACEHEALTH 2018 FINANCING

STATE OF OREGON OREGON FACILITIES AUTHORITY

RESOLUTION NO. 2018-15

ADOPTED: October 5, 2018

A RESOLUTION OF THE OREGON FACILITIES AUTHORITY RECOMMENDING THAT

THE STATE TREASURER ISSUE REVENUE BONDS TO FINANCE AND REFINANCE

THE PROJECTS DESCRIBED HEREIN UPON SATISFACTION OF CERTAIN

CONDITIONS AS DESCRIBED HEREIN; AUTHORIZING THE EXECUTION AND

DELIVERY OF A PRELIMINARY AGREEMENT BY AND BETWEEN THE AUTHORITY

AND THE PARTICIPATING INSTITUTION; AND AUTHORIZING AND DETERMINING

OTHER MATTERS WITH RESPECT THERETO.

WHEREAS, the Oregon Facilities Authority, a body politic and corporate duly created

and existing under the laws of the State of Oregon (the “Authority”) is authorized and empowered by the provisions of Oregon Revised Statutes Chapter 289, as amended (the “Act”), to recommend to the State Treasurer of the State of Oregon (the “State Treasurer”) the issuance of revenue bonds for the purpose of financing or refinancing the acquisition, construction and equipping of “projects” as defined in the Act, and the loaning of the proceeds of such revenue bonds to participating institutions in connection therewith; and

WHEREAS, PeaceHealth, a nonprofit corporation duly organized and existing under the laws of the State of Washington and qualified to do business in the State of Oregon, (the “Participating Institution”), has filed with the Authority an application requesting the issuance of revenue bonds for the purpose of refunding in whole or in part certain outstanding bonds including State of Oregon – Oregon Facilities Authority Revenue Bonds (PeaceHealth), 2008 Series A (the “2008A Bonds”), the State of Oregon – Oregon Facilities Authority Refunding Revenue Bonds (PeaceHealth) 2008 Series B (the “2008B Bonds” and together with the 2008A Bonds, the “2008 Bonds”) and the outstanding State of Oregon – Oregon Facilities Authority Refunding Revenue Bonds (PeaceHealth), 2011 Series A (the “2011A Bonds” and together with the 2008 Bonds, the “Refunded Bonds”) previously issued for the Participating Institution’s benefit by the Authority, the Refunded Bonds having been issued for the purpose of financing and refinancing various capital projects owned and used by the Participating Institution in its health care operations (that portion of the capital projects originally financed or refinanced with proceeds of the Refunded Bonds that is being refinanced with the Bonds (as defined below) being herein collectively called the “Projects”); and such application has been reviewed by the State Treasurer’s office, the Executive Director of the Authority, the Authority’s bond counsel and the Authority’s financial advisor; and

WHEREAS, in said application the Participating Institution has requested that the Authority consider recommending that the State Treasurer issue tax-exempt revenue bonds, in

RESOLUTION – PEACEHEALTH 2018 FINANCING Page 2

one or more series (the “Bonds”), under the Act in the approximate aggregate principal amount of $230,000,000, and to loan the proceeds of such Bonds to the Participating Institution for the purposes described above and to pay the related costs associated therewith, including the funding of one or more debt service reserve funds, if deemed necessary and desirable, and to pay costs of issuance of the Bonds; and

WHEREAS, the portion of the Bonds that will refund the 2008 Bonds are expected to be marketed and sold by Citigroup Global Markets Inc., as representative on behalf of itself and other underwriters, in a negotiated public offering; and

WHEREAS, the portion of the Bonds that will refund the 2011A Bonds are expected to be purchased directly by Banc of America Public Capital Corp, in a direct placement; and

WHEREAS, the Participating Institution, the other parties to the transactions pertaining to the issuance and sale of the Bonds, and the Authority’s bond counsel are preparing drafts of the basic documents needed in connection therewith; and

WHEREAS, to maximize savings from the refunding and to secure favorable long-term interest rates for the financing of the capital projects, the Participating Institution has requested that the Authority grant conditional final approval recommending the issuance of the Bonds upon satisfaction of certain conditions set forth herein; and

WHEREAS, the Participating Institution is ready to proceed expeditiously with the issuance, sale and delivery of the Bonds and as such, the Authority wishes to delegate authority to the State Treasurer, or his designee, to approve final Bond Documents (as defined below) upon the advice of the Authority’s bond counsel and financial advisor;

WHEREAS, the State Treasurer, acting on behalf of the State of Oregon and the Authority, previously issued the State of Oregon – Oregon Facilities Authority Revenue Bonds (PeaceHealth), 2009 Series A (the “2009A Bonds”) on October 15, 2009; and

WHEREAS, depending upon market conditions, the Participating Institution may desire to defease the 2009A Bonds and has requested the Authority, if necessary, to enter into an escrow agreement related to the defeasance of the 2009A Bonds (the “2009A Escrow Agreement”), with such defeasance escrow to be funded by the proceeds of a taxable financing that does not include the Authority;


SECTION 1. ELIGIBILITY. The Authority, based upon the advice of its bond counsel, hereby finds and determines that the Projects qualify as a “project” within the meaning of the Act. The Authority further finds and determines that the financing and refinancing of the Projects by means of revenue bonds issued by the State Treasurer pursuant to the Act will promote the public purposes sought to be advanced by the Act.

SECTION 2. COMPLIANCE WITH LEGAL REQUIREMENTS AND ADMINISTRATIVE

RULES. The Authority hereby finds and determines that the State Treasurer, or his designee, in reliance upon the advice of the Authority’s bond counsel and the Authority’s financial advisor,


has determined that all legal requirements and other requirements for the issuance of the Bonds to finance and refinance the Projects have been or will be met prior to the issuance of the Bonds.

Except as set forth below, the requirements of the Administrative Rules have been met insofar as such requirements relate to the matters referred to above and to the extent such requirements must be met as a condition precedent to the adoption of this resolution by the Authority.

SECTION 3. RECOMMENDATION TO ISSUE BONDS. Contingent upon the concurrence of the Director, Debt Management Division of the State Treasurer, the Authority hereby recommends that the State Treasurer issue the Bonds under the Act in the approximate aggregate principal amount of $230,000,000, and to loan the proceeds of such Bonds to the Participating Institution for the purposes described herein, subject to the Participating Institution’s compliance with all legal and other requirements and confirmation by the State Treasurer, or his designee, that the conditions described in Section 6 below have been satisfied. The Authority finds that no further meeting or action of the Authority is needed for the State Treasurer to proceed with the issuance of the Bonds.

SECTION 4. PRELIMINARY AGREEMENT; AUTHORIZATION. The form of Preliminary Agreement attached hereto as Exhibit A is hereby approved. The Executive Director of the Authority is hereby authorized, empowered and directed, for and on behalf of the Authority, to execute and deliver such Preliminary Agreement in substantially the form approved but with such variations, changes, omissions and insertions as may be necessary or appropriate and not inconsistent with the provisions of applicable law and to execute such other documents and instruments as shall be necessary or advisable for the purpose of furthering the actions described in Section 3 hereof.

SECTION 5. APPROVAL OF FORMS OF BOND INDENTURE, LOAN AGREEMENT, BOND

PURCHASE AGREEMENT AND OFFICIAL STATEMENT. The State Treasurer, or his designee, is hereby authorized, on behalf of the Authority, upon the advice of the Authority’s bond counsel and the Authority’s financial advisor, to approve the final forms of one or more Bond Indentures, Loan Agreements, Bond Purchase Agreements (to the extent the Bonds are publically offered) and other financing documents, including Official Statements related to the Bonds (to the extent the Bonds are publically offered) (collectively, the “Bond Documents”).

SECTION 6. CONDITIONS TO ISSUANCE, SALE AND DELIVERY OF BONDS. The State Treasurer, or his designee, is hereby authorized, on behalf of the Authority, with the advice of the Authority’s bond counsel and the Authority’s financial advisor, to approve the issuance, sale and delivery of the Bonds upon (1) delivery to the Authority of final Bond Documents; (2) receipt of ratings on the Bonds as required under the Administrative Rules if the Bonds are sold to the public; (3) confirmation that the terms and conditions of the Bonds are substantially the same as presented to the Board in connection with, and as described in, this Resolution; (4) finding that no material issues have arisen with respect to the transaction prior to the closing that, in the opinion of the State Treasurer, or his designee, create the need for additional review or approval by the Board; and (5) confirmation that all legal and other requirements for the issuance, sale and delivery of the Bonds have been satisfied.


SECTION 7. DEFEASANCE OF 2009A BONDS AUTHORIZED. The State Treasurer, or his designee, is hereby authorized, empowered and directed, for and on behalf of the Authority, to execute and deliver the 2009A Escrow Agreement, if necessary, in connection with the defeasance of the 2009A Bonds.

SECTION 8. APPOINTMENT OF ATTORNEY-IN-FACT; DISCLOSURE COUNSEL. The Authority’s bond counsel, the law firm of Orrick, Herrington & Sutcliffe LLP, Portland, Oregon (“Orrick”), is hereby appointed the Authority’s attorney-in-fact for the purpose of applying for any rulings from the Internal Revenue Service that may be required in connection with the bonds described herein and for filing, signing and taking any other actions on behalf of the Authority in connection with any such ruling request. Orrick is also appointed as disclosure counsel to the Authority for the purpose of assisting the Authority with respect to compliance with its disclosure obligations under applicable federal and state securities law.

SECTION 9. EFFECTIVENESS; CONFLICTING RESOLUTIONS. This Resolution shall be effective immediately upon its adoption. Any resolutions of the Authority and parts thereof which are in conflict with the terms of this Resolution shall be, and they hereby are, rescinded, but only to the extent of such conflict.

[Signature follows next page]

RESOLUTION – PEACEHEALTH 2018 FINANCING SIGNATURE PAGE

CERTIFICATION OF RESOLUTION

The undersigned does hereby certify that I am the duly appointed, qualified and acting

Executive Director of the Oregon Facilities Authority; that the foregoing is a true and complete copy of Resolution No. 2018-15 as adopted by said Authority at a meeting duly called and held in accordance with law on October 5, 2018; and that the following members of the Authority voted in favor of said Resolution:

the following members of the Authority voted against said Resolution:

and the following members of the Authority abstained from voting on said Resolution:

In witness whereof, the undersigned has hereunto set her hand as of this 5th day of

October 2018.

___________________________________ Gwendolyn Griffith, Executive Director

PRELIMINARY AGREEMENT – PEACE HEALTH 2018 FINANCING Page A-1

EXHIBIT A

PRELIMINARY AGREEMENT

BETWEEN

PEACEHEALTH

AND


THIS PRELIMINARY AGREEMENT is entered into as of the 5th day of October 2018 by and

between the OREGON FACILITIES AUTHORITY, a public body corporate and politic duly created and existing under the laws of the State of Oregon (the “Authority”), and PeaceHEALTH, a nonprofit corporation duly organized and existing under the laws of the State of Washington and qualified to do business in the State of Oregon, (the “Participating Institution”).

WHEREAS, the Authority is authorized and empowered by the provisions of Oregon Revised Statutes (“ORS”) Chapter 289, as amended (the “Act”), to recommend to the State Treasurer the issuance of revenue bonds for the purpose of financing or refinancing the acquisition, construction and equipping of “projects” as defined in the Act, and the loaning of the proceeds of such revenue bonds to participating institutions in connection therewith; and

WHEREAS, the Participating Institution has filed with the Authority an application requesting the issuance of revenue bonds for the purpose of refunding in whole or in part certain outstanding bonds including State of Oregon – Oregon Facilities Authority Revenue Bonds (PeaceHealth), 2008 Series A (the “2008A Bonds”), the State of Oregon – Oregon Facilities Authority Refunding Revenue Bonds (PeaceHealth) 2008 Series B (the “2008B Bonds” and together with the 2008A Bonds, the “2008 Bonds”) and the outstanding State of Oregon – Oregon Facilities Authority Refunding Revenue Bonds (PeaceHealth), 2011 Series A (the “2011A Bonds” and together with the 2008 Bonds, the Refunded Bonds) previously issued for the Participating Institution’s benefit by the Authority, the Refunded Bonds having been issued for the purpose of financing and refinancing various capital projects owned and used by the Participating Institution in its health care operations (that portion of the capital projects originally financed or refinanced with proceeds of the Refunded Bonds that is being refinanced with the Bonds (as defined below) being herein collectively called the “Projects”); and such application has been reviewed by the State Treasurer’s office, the Executive Director of the Authority, the Authority’s bond counsel and the Authority’s financial advisor; and

WHEREAS, in said application the Participating Institution has requested that the Authority consider recommending that the State Treasurer issue tax-exempt revenue bonds, in


one or more series (the “Bonds”), through both a public offering and a private placement, under the Act in the approximate aggregate principal amount of $230,000,000, and to loan the proceeds of such Bonds to the Participating Institution for the purposes described above and to pay the related costs associated therewith, including the funding of one or more debt service reserve funds, if deemed necessary and desirable, and to pay costs of issuance of the Bonds; and

WHEREAS, the Authority has adopted a resolution pursuant to which it has recommended that the State Treasurer issue the Bonds under the Act for the purposes as described above; and

WHEREAS, the State Treasurer has indicated in writing his intent to issue the Bonds under the Act for the purposes described above;

NOW, THEREFORE, for and in consideration of the premises and the mutual undertakings of the parties as set forth herein, the Authority and the Participating Institution hereby agree as follows:

SECTION 1. RECOMMENDATION OF THE AUTHORITY. By Resolution No. 2018-___ adopted on October 5, 2018 (the “Resolution”), the Authority has recommended that the State Treasurer issue the Bonds under the Act in the approximate aggregate principal amount of $230,000,000 and to loan the proceeds of such Bonds to the Participating Institution for the purposes described in the Resolution. Such recommendation remains subject to the terms hereof and upon satisfaction by the Participating Institution of all conditions stated herein and all other conditions imposed on the Participating Institution by the Authority prior to issuance of the Bonds and upon compliance with all requirements of applicable law, including without limitation, the following conditions and understandings:

(i) COMPLIANCE WITH APPLICABLE LAW. Prior to the issuance of any Bonds, the Authority and the State Treasurer shall have been advised by the Authority’s bond counsel that all legal requirements for the sale of such Bonds have been fully met and complied with. If bond counsel advises the Authority that all legal requirements have not been complied with or that the financing and refinancing contemplated by the Participating Institution deviates in any material respect from the financing and refinancing proposed in the application of the Participating Institution, the Authority may require the Participating Institution to take further actions prior to the issuance of the Bonds, including resubmitting an updated application and seeking an additional approval of the Authority.

(ii) BONDS ARE LIMITED OBLIGATIONS. In the event that any Bonds are issued, such Bonds shall be payable solely and only from the specific properties and revenues pledged thereto and shall not constitute a debt of the State of Oregon or a lending of the credit of the State of Oregon within the meaning of any constitutional or statutory limitation or a charge upon any properties or revenues of the State of Oregon or the Authority not specifically pledged thereto, and no holder of any such Bond shall have the right to enforce the payment of any amounts owing under or with respect to such Bonds out of any properties or revenues of the State of Oregon or the Authority not specifically pledged thereto. The Participating Institution understands that any loan


agreement, amendment, supplement or other agreement to be entered into in connection with the Bond financing and refinancing will provide that amounts payable thereunder by the Participating Institution will be sufficient to pay the principal of and the interest on, and redemption premium, if any, of the Bonds as and when the same become due and payable.

(iii) DISCRETION TO DETERMINE WHETHER TO PROCEED. The Authority and the State Treasurer shall each retain at all times complete and absolute discretion as to whether or not to proceed with the issuance of the Bonds, and each may refuse to proceed therewith for any reason deemed by either to be sufficient notwithstanding that all legal requirements for the issuance of such Bonds may have been met and fully complied with.

SECTION 2. UNDERTAKINGS ON THE PART OF THE PARTICIPATING INSTITUTION. The Participating Institution agrees as follows:

(A) COMPLETION OF FINANCING. If Bonds are issued as requested by the Participating Institution as described above, it is the intent of the Participating Institution to diligently cause the Projects to be operated or to continue to be operated in the manner and for the purposes previously disclosed to the Authority in the Participating Institution’s application for financing. If the Bond proceeds are not sufficient to complete the financing and refinancing of the Projects as contemplated herein, to fund the debt service reserves, if necessary, and to pay costs of issuance of the Bonds, the Participating Institution agrees to cause the financing and refinancing of the Projects, the funding of the reserves and the payment of costs of issuance to be completed at the Participating Institution’s expense. The Authority makes no representation or warranty that the proceeds of the Bonds will be sufficient to accomplish the financing and refinancing of the Projects, the funding of a reserve and payment of costs of issuance of the Bonds as planned by the Participating Institution, and the Participating Institution hereby acknowledges and agrees that it assumes all risks associated with such potential insufficiency.

(B) COOPERATION WITH THE AUTHORITY AND TREASURER. The Participating Institution will cooperate with the State Treasurer, the Executive Director of the Authority, the Authority’s bond counsel and the Authority’s financial advisor in all matters relating to the issuance, sale and delivery of the Bonds and the financing and refinancing of the Projects from the proceeds thereof; provided, however, that nothing herein shall obligate the Participating Institution to cause the Bonds to be issued.

(C) ARRANGEMENTS FOR SALE OF THE BONDS. The Participating Institution acknowledges and agrees that it shall have sole responsibility for arranging for the sale of the Bonds, and acknowledges that under the Act the State Treasurer has the ultimate authority to approve and remove any underwriter for the Bonds.

(D) EXECUTION AND DELIVERY OF LOAN AGREEMENT. At the time of issuance of any Bonds, the Participating Institution will deliver an executed loan agreement or other financing agreement with the State Treasurer (acting as issuer of the


Bonds on behalf of the State), under which terms the Participating Institution will agree to pay the loan payments sufficient in the aggregate principal of and interest on, and redemption premium, if any, of such Bonds as and when the same shall become due and payable. The loan agreement or other financing agreement shall contain a provision that the Participating Institution shall indemnify and hold the Authority and the State of Oregon harmless from all liabilities incurred in connection with the financing and refinancing and the offering or sale of such Bonds.

(E) FURTHER ACTIONS. The Participating Institution will take such further action and adopt such further proceedings as may be required to implement the terms and provisions of this Preliminary Agreement. The Participating Institution shall obtain all necessary governmental approvals and opinions of bond counsel to ensure the legality of the Bonds and the exclusion of interest on the Bonds issued on a tax-exempt basis from gross income for federal income tax purposes. In addition, the Participating Institution shall make no use of the proceeds of the Bonds issued on a tax-exempt basis so as to cause the Bonds to be classified as “arbitrage bonds” within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended.

(F) REIMBURSEMENT FOR EXPENSES. Regardless of whether the Bonds are issued, the Participating Institution will reimburse the Authority and the State Treasurer for all reasonable and necessary direct and indirect expenses incurred in connection with the consideration and processing of the application for bond financing and the preparation of the Bonds for issuance, which expenses shall be itemized on an invoice sent by the Authority to the Participating Institution and paid within 30 days of the date of such invoice. If any Bonds are issued, the Participating Institution will pay, or cause to be paid, to the Authority its usual and customary fees according to Authority policy (as the same may be modified from time to time), its issuance fee and any annual fee.

(G) FEES AND EXPENSES OF BOND COUNSEL AND FINANCIAL ADVISOR. The Participating Institution hereby agrees to pay the fees and expenses of Orrick, Herrington & Sutcliffe LLP, bond counsel and disclosure counsel (hereinafter, “bond counsel”) to the Authority, and PFM Financial Advisors LLC, financial advisor to the Authority, for professional services rendered in connection with the issuance, sale and delivery of any Bonds. The Participating Institution acknowledges that the fees and expenses of bond counsel and the financial advisor shall be as set forth in the respective contracts of said firms entered into with the Authority and the State Treasurer, subject to such modifications as may have been agreed upon in writing by bond counsel or the financial advisor, as appropriate. The fees and expenses of bond counsel and the financial advisor shall be paid at the time of the issuance and delivery of any Bonds; provided, however, that with respect to any expenses which it is not practicable for bond counsel or the financial advisor to compile and itemize at such time, such expenses shall be paid within thirty (30) days from the date of any invoice therefor; and provided further, that if the Participating Institution abandons or otherwise fails to complete the financing contemplated hereby within six months from the date of adoption of the Authority resolution referred to in the preamble hereto, the Participating Institution shall pay all fees and expenses incurred by said bond counsel or said financial advisor in


connection therewith, which fees and expenses shall be itemized on an invoice sent to the Participating Institution and paid within thirty (30) days of the date of such invoice.

(H) INDEMNITY AND HOLD HARMLESS AGREEMENT. The Participating Institution hereby agrees to indemnify and hold the State of Oregon, the State Treasurer, the Authority and their respective officials, officers, members and employees (the “Indemnified Parties”) harmless against and from any and all claims, of whatever nature and howsoever arising, by or on behalf of any person, firm, corporation or other legal entity arising from the execution of this Preliminary Agreement or any other actions taken or omitted to be taken by any of the Indemnified Parties or the Participating Institution relating in any way to the Projects or the offering, sale, remarketing or issuance of the Bonds or any transaction related to the foregoing, including without limitation any claim or liability arising from or in connection with:

(i) any condition of the Projects or the construction thereof;

(ii) any breach or default on the part of the Participating Institution in the performance of any of its obligations under this Preliminary Agreement or any other agreement entered into in connection with the Bonds or the Projects;

(iii) any act or negligence of the Participating Institution or of any of their respective agents, contractors, servants, employees or licensees;

(iv) any act or negligence of any assignee or lessee of the Participating Institution, or of any agents, contractors, servants, employees or licensees of any assignee or lessee of the Participating Institution;

(v) any material misstatement or omission, or alleged material misstatement or omission, made or omitted in any disclosure materials used in connection with the offering or sale of the Bonds or any other information used in connection with the offering, placement, sale, remarketing or purchase of any Bond (other than a material misstatement or omission contained in information provided by an Indemnified Party specifically for inclusion in disclosure materials relating to the Bonds).

The Participating Institution shall indemnify and save the Indemnified Parties harmless from any such claim arising as aforesaid, or in connection with any action or proceeding brought thereon, and upon notice from the Indemnified Party, the Participating Institution shall, subject to ORS Chapter 180 (or any successor provision of law), defend it in any such action or proceeding at the Participating Institution’s expense, and shall pay all attorney’s fees and expenses of the Indemnified Parties incurred in connection therewith at trial, on appeal or otherwise related to the claim for which indemnification is provided hereunder, and against all other liabilities arising from the issuance of the Bonds on behalf of the Participating Institution and any fees and costs incurred by the Indemnified Parties in responding to any U.S. Department of the Treasury Internal Revenue Service (the “IRS”) audit, U.S. Securities and Exchange Commission (the “SEC”) inquiry or any Federal, State or regulatory action or proceeding with respect to the Bonds or the Project. The Authority and the State Treasurer may employ, at the


Participating Institution’s expense, any legal counsel or experts required in responding to any IRS audit, SEC inquiry or any other Federal, State or regulatory action or proceeding with respect to the Bonds or the Project. The foregoing indemnification and hold harmless agreement shall be and remain in full force and effect notwithstanding the failure or refusal, for any reason, of the Authority or the State Treasurer to proceed with the issuance of the Bonds. Notwithstanding anything to the contrary contained herein, the Participating Institution shall have no liability to indemnify the Indemnified Parties against claims or damages resulting from the Indemnified Parties’ own willful misconduct.

SECTION 3. MISCELLANEOUS. The State of Oregon, the State Treasurer, the Authority and their respective officials, officers, members and employees, and Orrick, Herrington & Sutcliffe LLP and PFM Financial Advisors LLC, and each of them individually, shall be third party beneficiaries of this agreement with respect to payment of their respective fees, with the right to enforce the provisions of this agreement directly and individually and without joining any other beneficiary hereof.

This agreement shall be governed by and construed in accordance with the laws of the State of Oregon.

This agreement shall be binding upon the parties hereto and their respective successors and assigns.

This agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

PRELIMINARY AGREEMENT – PEACEHEALTH 2018 FINANCING SIGNATURE PAGE

IN WITNESS WHEREOF, the Authority and the Participating Institution have caused this Preliminary Agreement to be executed and delivered by their duly authorized officers or representatives as of the date first set forth above.

OREGON FACILITIES AUTHORITY By: _______________________________________

Its Executive Director

PEACE HEALTH, AS PARTICIPATING INSTITUTION

By:

Authorized Representative

4157-8762-2679.4



1600 PIONEER TOWER 888 SW FIFTH AVENUE



MEMORANDUM



Date: August 7, 2018

Subject: Application by Friends of the Child Advocacy Center dba Kids' FIRST Friends of the Child Advocacy Center dba Kids' FIRST (the "Applicant"), located in Eugene, Oregon, timely made an application to the Authority for SNAP Loan financing in an approximate amount of $1,815,000. The Applicant appears to be the type of organization that qualifies for financing through OFA, and the Project also appears to be of the type that qualifies under OFA's statute and administrative rules. These assumptions would be confirmed in the diligence process, if preliminary approval is granted. This is the Applicant's first OFA financing. The Sponsoring Bank is Columbia Bank. The Applicant mission is to provide intervention and advocacy services for children who are victims of, or witnesses to, crime. It coordinates a multidisciplinary team response to child abuse, and provides comprehensive assessments that include forensic interviews, forensic medical examinations, and victim advocacy/support for families and their non-offending caregivers. The Project is the financing of a portion of the purchase price of a 9,052 square foot building and additional attached lot that can accommodate up to 26 parking spaces. The purchase and sale agreement for the property provides for a purchase price of $1,700,000. Estimated renovation costs are $750,000. The Applicant’s equity contribution will be approximately $695,000. The Bank is offering a loan with an initial interest-only period for six months to allow for renovation of the facility. Thereafter, the loan will have a 25 years amortization period.


Interest will be fixed for ten years, after which it will reset. There is a mutual call at ten years. The expected SNAP Loan Interest rate is 3.95%. On September 6, 2018, we held a scoping call with the financing team. No unusual issues were identified. The Applicant and Bank hope to close the financing prior to the end of January, 2019. The Bank has informed me that the Applicant wishes to obtain preliminary approval, and then await the appraisal and other Bank-Applicant steps to be taken before moving into full gear on the preparation of Bank and SNAP Loan documents. Therefore, I would expect to see the Applicant returning for final approval in January, 2019. The purchase and sale agreement provides for a January closing. The Financial Advisor's Report is included in the materials. Mr. Brown has conducted PFM's usual conference with the Applicant. SNAP Loan Counsel's Report is included in the materials. Ms. McCoog recommends the transaction for preliminary approval. Recommendation: I recommend that the Authority adopt Resolution 2018-16 granting to Friends of the Child Advocacy Center dba Kids' FIRST preliminary approval for an OFA SNAP Loan in an approximate amount of $ 1,815,000. If you have any questions, please let me know. GG/np

034439/00234/9336483v1

PFM Financial Advisors LLC, 650 NE Holladay Street, Ste. 1600, Portland, Oregon 97232

September 19, 2018

SNAP Report Kids’ FIRST (Friends of the Child Advocacy Center)

This report has been prepared for the Oregon Facilities Authority’s preliminary consideration of the application submitted by Friends of the Child Advocacy Center (d/b/a Kids’ FIRST) for a SNAP loan of up to $1,815,000.

Preliminary Conversation and Application I spoke with Sarah Stewart and Megan Jones, Interim Executive Director and Finance Director, respectively, of Kids’ FIRST. Kids' FIRST is the child abuse intervention center for Lane County, and currently leases approximately 3,000 square feet from the County. The organization is looking to expand its footprint and find a space better suited for its services. Kids’ FIRST has executed a sales agreement with the University of Oregon for the acquisition of a suitable property; the property will cost $1.7 million and the organization expects another $750,000 in renovation costs. Following a due diligence period, the property acquisition is expected to close in early January 2019. Kids’ FIRST expects to apply approximately $700,000 of previously fundraised amounts and cash reserves towards the project in addition to the $1.8 million SNAP loan.

Kids’ FIRST solicited financing terms from three potential lenders and received proposals from two. Of those two, Pacific Continental Bank (now Columbia Bank) proposed the most advantageous interest rate. The loan will have a ten year initial term and a 25 year amortization. The interest rate will be based on the ten-year Intercontinental Exchange (“ICE”) swap rate – a published, third-party index – plus a 2.00% credit spread and multiplied by the bank’s tax factor (current about 79%). The loan has provisions for formulaic interest rate resets at years 11 and 21; however, the term sheet also provides for the bank (or the borrower) to terminate the financing at either interest rate reset date. This termination provision was not part of our initial conversation. However, the loan application is otherwise consistent with our discussion.

Preliminary Report – Kids’ FIRST Page 2

Western Financial Group, PMB 172-V, 333 South State Street, Lake Oswego, Oregon 97034

If you have any question regarding this review, I will be at the October meeting.

For PFM Financial Advisors LLC

A. Duncan Brown

3139102.1 042931 CORR

M E M O R A N D U M

TO: Members of the Oregon Facilities Authority Gwendolyn Griffith, Executive Director

FROM: Carol J. McCoog Jennifer B. Córdova Gulgun U. Mersereau

DATE: September 21, 2018

RE: Preliminary Approval for Kids’ FIRST SNAP Loan Friends of the Child Advocacy Center, Inc. dba Kids’ FIRST (the “Borrower”), an Oregon nonprofit corporation and a 501(c)(3) organization, is seeking preliminary approval for the issuance of an Oregon Facilities Authority SNAP Loan in an approximate principal amount of $1,815,000. Background The Borrower will use the SNAP Loan proceeds to purchase and renovate a building and a parking lot for the Borrower’s permanent home. The Borrower will obtain financing through Columbia Bank (the “Bank”) with a 2 phase loan that will include (i) a 6-month, draw-down phase during construction and (ii) a permanent loan with a 25-year amortization after the initial 6 months. Interest will be set at closing for the first 10.5 years and subject to reset after that initial period. Initial Scoping Call and Review of Application We have conducted an initial scoping call with the Borrower and reviewed its application. Based on the information provided, as of the time we are submitting this memorandum, we have identified the following issues that may affect either the size of the SNAP Loan or our ability to proceed with the SNAP Loan. Other issues may arise as we conduct further due diligence during the issuance process. • We will conduct due diligence on the Borrower’s 501(c)(3) status in order to determine that its 501(c)(3) status is current and that, from our perspective, there is nothing that materially, adversely affects its status. If we are not ultimately satisfied that the Borrower’s status is current and that there is nothing that would materially, adversely affect this status, we will not proceed with the issuance of the SNAP Loan.


3139102.1 042931 CORR

• We will conduct due diligence on the uses of the facilities and property being refinanced and financed to determine whether there will be private business use or unrelated trade or business use that may exceed the IRS limitations. Recommendation Based on participation in the scoping call and our review of the application, we recommend the Borrower for preliminary approval of a SNAP loan. Next Steps Assuming the Board grants preliminary approval for the Kids’ FIRST SNAP Loan, we will conduct our standard 501(c)(3) tax due diligence, and we anticipate that the Bank will schedule a kick-off call to review outstanding issues and establish a schedule for the financing.

Initial Resolution – Kids’ FIRST Page 1

034439/00234/9324336v1

State of Oregon Oregon Facilities Authority

Resolution No. 2018-16 Adopted: October 5, 2018

A resolution of the Oregon Facilities Authority recommending that the State Treasurer issue a small nonprofit accelerated program (SNAP) loan for the purposes described herein, authorizing the execution and delivery of a preliminary agreement by and between the Authority and the Participating Institution proposing the project described below, and authorizing and determining other matters with respect thereto.

WHEREAS, the Oregon Facilities Authority, a body politic and corporation duly created and existing under the laws of the State of Oregon (the “Authority”) is authorized and empowered by the provisions of ORS Chapter 289, as amended (the “Act”), to recommend to the State Treasurer the issuance of revenue bonds, as defined in ORS 289.005(1)(b), for the purpose of financing or refinancing the acquisition, construction and equipping of “projects” as defined in the Act, and the lending of the proceeds of such revenue bonds to participating institutions in connection therewith; and

WHEREAS, Friends of the Child Advocacy Center, Inc. dba Kids’ FIRST, an Oregon nonprofit corporation and 501(c)(3) organization (the “Participating Institution”), has filed with the Authority a substantially complete application proceeds to acquire and renovate a building and parking lot (all of the foregoing being herein collectively called the “Project”); which application has been reviewed by the Executive Director of the Authority, the Authority’s bond counsel for the Authority’s small nonprofit accelerated program (“SNAP”) loan and the Authority’s financial advisor; and

WHEREAS, in said application the Participating Institution has requested that the Authority consider recommending that the State Treasurer issue a SNAP loan under the Act (the “Loan”) in an approximate principal amount of $1,815,000, and to lend the proceeds of the Loan to the Participating Institution for the purposes described above and paying the related costs associated therewith and with the issuance of the Loan;


Section 1. Eligibility. The Authority, based upon the advice of Hawkins Delafield & Wood LLP, bond counsel for the Authority’s SNAP loans (“Bond Counsel”), hereby finds and determines that the Project qualifies as a “project” within the meaning of the Act. The Authority further finds and determines that the financing and refinancing of the Project will promote the public purposes sought to be advanced by the Act.


034439/00234/9324336v1

Section 2. Recommendation to Issue SNAP Loan. The Authority hereby recommends that the State Treasurer declare his intent to issue the Loan in the approximate principal amount of $1,815,000, and to lend the proceeds of the Loan to the Participating Institution for the purposes described above; provided, however, that

(i) prior to the issuance of the Loan, the Authority and the State Treasurer shall have been advised by Bond Counsel that all legal requirements for the issuance of the Loan have been fully met and complied with;

(ii) in the event that the Loan is issued for the purpose of financing and refinancing the Project, the Loan shall be payable solely and only from the specific properties and revenues pledged thereto and shall not constitute a debt of the State of Oregon or a lending of the credit of the State of Oregon within the meaning of any constitutional or statutory limitation or a charge upon any properties or revenues of the State of Oregon or the Authority not specifically pledged thereto, and no holder of the Loan shall have the right to enforce the payment of any amounts owing under or with respect to the Loan out of any properties or revenues of the State of Oregon or the Authority not specifically pledged thereto; and

(iii) the Authority shall retain at all times complete and absolute discretion as to whether or not to proceed with the issuance of the Loan for the purpose of financing or refinancing the Project, and may refuse to proceed therewith for any reason deemed sufficient by the Authority notwithstanding that all legal requirements for the issuance of the Loan may have been met and fully complied with.

Section 3. Preliminary Agreement. The form of Preliminary Agreement attached hereto as Exhibit A is hereby approved. The Executive Director of the Authority is hereby authorized, empowered and directed, for and on behalf of the Authority, to execute and deliver such Preliminary Agreement in substantially the form approved but with such variations, changes, omissions and insertions as may be necessary or appropriate and not inconsistent with the provisions of applicable law.

Section 4. Appointment of Attorney-in-Fact. Bond Counsel is hereby appointed the Authority’s attorney-in-fact for the purpose of applying for any rulings from the Internal Revenue Service that may be required in connection with the Loan and for filing, signing and taking any other actions on behalf of the Authority in connection with any such ruling request.

Section 5. Post-Issuance Compliance. The Authority hereby resolves that the Participating Institution is not subject to the requirements of Section III of the Post-Issuance Disclosure Compliance Requirements of the State of Oregon Oregon Facilities Authority Post-Issuance Tax and Disclosure Compliance Policies and Procedures adopted by the Authority on December 5, 2012.

Section 6. Effectiveness; Conflicting Resolutions. This resolution shall be effective immediately upon its adoption. All resolutions of the Authority and parts thereof which are in conflict with the terms of this resolution shall be, and they hereby are, rescinded, but only to the extent of such conflict.


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Certification of Resolution

The undersigned does hereby certify that I am the duly appointed, qualified and acting Executive Director of the Oregon Facilities Authority; that the foregoing is a true and complete copy of Resolution No. 2018-16 as adopted by said Authority at a meeting duly called and held in accordance with law on October 5, 2018; and that the following members of the Authority voted in favor of said Resolution: the following members of the Authority voted against said Resolution: and the following members of the Authority abstained from voting on said Resolution:

In witness whereof, the undersigned has hereunto set her hand as of this 5th day of October, 2018.

__________________________________ Gwendolyn Griffith, Executive Director

Exhibit A: Form of Preliminary Agreement – Kids’ FIRST Page 1

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Exhibit A

Preliminary Agreement Oregon Facilities Authority SNAP Loan

Between

KIDS’ FIRST

and


This Preliminary Agreement is entered into as of the 5th day of October, 2018 by and between the Oregon Facilities Authority, a public body corporate and politic duly created and existing under the laws of the State of Oregon (the “Authority”), and Friends of the Child Advocacy Center, Inc. dba Kids’ FIRST, an Oregon nonprofit public corporation and 501(c)(3) organization (the “Participating Institution”).

Premises:

WHEREAS, the Authority is authorized and empowered by the provisions of ORS Chapter 289, as amended (the “Act”), to recommend to the State Treasurer the issuance of revenue bonds, as defined in ORS 289.005(1)(b) for the purpose of financing or refinancing the acquisition, construction and equipping of “projects” as defined in the Act, and the lending of the proceeds of such revenue bonds to participating institutions in connection therewith; and

WHEREAS, the Participating Institution has filed with the Authority a substantially complete application to acquire and renovate a building and parking lot (all of the foregoing being herein collectively called the “Project”) through the Authority’s Small Nonprofit Accelerated Program (“SNAP”); and

WHEREAS, in its application the Participating Institution has requested that the Authority consider recommending that the State Treasurer issue a SNAP loan under the Act (the “Loan”) in an approximate principal amount of $1,815,000 (the “Principal Amount”), and lend


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the proceeds of the Loan to the Participating Institution for the purposes described above and paying the related costs associated therewith and with the issuance of the Loan;

WHEREAS, the Authority has adopted a resolution pursuant to which it has recommended that the State Treasurer issue the Loan under the Act for the purposes described above; and

WHEREAS, the State Treasurer has indicated in writing his intent to issue the Loan under the Act for the purposes described above;

NOW, THEREFORE, for and in consideration of the premises and the mutual undertakings of the parties as set forth herein, the Authority and the Participating Institution hereby agree as follows:

Section 1. Undertakings on the Part of the Authority. Subject to the terms and conditions stated herein, the Authority agrees and represents as follows:

(a) Issuance of Loan. The Authority will, subject to the terms hereof and upon satisfaction by the Participating Institution of all conditions stated herein and all other conditions imposed on the Participating Institution by the Authority prior to issuance of the Loan and upon compliance with all requirements of applicable law, take such further actions as may be necessary or appropriate to recommend that the State Treasurer issue the Loan under the Act in the Principal Amount, and lend the proceeds of the Loan to the Participating Institution for the purposes described above, which Loan shall be payable solely and only out of the loan payments paid by the Participating Institution pursuant to a SNAP loan financing agreement to be entered into by the Participating Institution.

(b) Other Actions. Subject to the terms hereof and upon satisfaction by the

Participating Institution of all conditions stated herein and all other conditions imposed on the Participating Institution by the Authority or the State Treasurer prior to issuance of the Loan and upon compliance with all requirements of applicable law, the Authority will take such action within its lawful powers as may be necessary and advisable to recommend that the State Treasurer authorize, issue the Loan and lend the Loan proceeds to the Participating Institution for the purposes described above, all as authorized by law and as mutually satisfactory to the State Treasurer, the Participating Institution and the Authority.

The foregoing undertakings of the Authority are hereby qualified by and subject in all

respects to the following conditions and understandings:

(i) Compliance with Applicable Law. Prior to the issuance of the Loan, the Authority and the State Treasurer shall have been advised by Hawkins Delafield & Wood


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LLP (“Bond Counsel”) that all legal requirements for the issuance the Loan have been fully met and complied with.

(ii) Loan to be Limited Obligation. In the event that the Loan is issued for

the purpose of financing and refinancing the Project, the Loan shall be payable solely and only from the specific properties and revenues pledged thereto and shall not constitute a debt of the State of Oregon or a lending of the credit of the State of Oregon within the meaning of any constitutional or statutory limitation or a charge upon any properties or revenues of the State of Oregon or the Authority not specifically pledged thereto, and no holder of the Loan shall have the right to enforce the payment of any amounts owing under or with respect to the Loan out of any properties or revenues of the State of Oregon or the Authority not specifically pledged thereto. The Participating Institution understands that the SNAP loan financing agreement to be entered into in connection with the Loan will provide that amounts payable thereunder will be sufficient to pay the principal of and the interest on, and redemption premium, if any, of the Loan as and when the same become due and payable.

(iii) Discretion to Determine Whether to Proceed. The Authority and the

State Treasurer shall each retain at all times complete and absolute discretion as to whether or not to proceed with the issuance of the Loan for the purposes described above, and each may refuse to proceed therewith for any reason deemed by either to be sufficient notwithstanding that all legal requirements for the issuance of the Loan may have been met and fully complied with.

Section 2. Undertakings on the Part of the Participating Institution. The

Participating Institution agrees as follows:

(a) Completion of Project. If the Loan is issued as requested by the Participating Institution, it is the intent of the Participating Institution to diligently cause the Project to be completed at the earliest practicable time and to cause the Project to be operated in the manner and for the purposes previously disclosed to the Authority in the Participating Institution’s application. If the Loan proceeds are not sufficient to complete the financing of the Project, the Participating Institution agrees to cause the Project to be completed at the Participating Institution’s expense. The Authority makes no representation or warranty that the proceeds of the Loan will be sufficient to accomplish the Project as planned by the Participating Institution, and the Participating Institution hereby acknowledges and agrees that it assumes all risks associated with such potential insufficiency.

(b) Cooperation with the Authority and Treasurer. The Participating

Institution will cooperate with the State Treasurer, the Authority, Bond Counsel and the Authority’s financial advisor in all matters relating to the issuance of the Loan.


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(c) Arrangements for the Lender. The Participating Institution acknowledges and agrees that it shall have sole responsibility for arranging a lender of the Loan, and acknowledges that under the Act the State Treasurer has the ultimate authority to approve lender under the SNAP loan program. At the request of the Participating Institution, the State Treasurer has approved Columbia Bank, as the lender (the “Lender”).

(d) Execution and Delivery of SNAP Loan Financing Agreement. At the

time of issuance of the Loan, the Participating Institution will deliver an executed SNAP loan financing agreement with the State Treasurer (acting as issuer of the Loan on behalf of the State of Oregon and the Authority), under which terms the Participating Institution will agree to pay the loan payments sufficient in the aggregate to pay the principal of and interest on, and redemption premium, if any, of the Loan as and when the same shall become due and payable. The SNAP loan financing agreement shall contain a provision that the Participating Institution shall indemnify and hold the Authority and the State of Oregon harmless from all liabilities incurred in connection with the requested financing and the placement of the Loan.

(e) Further Actions. The Participating Institution will take such further

action and adopt such further proceedings as may be required to implement the terms and provisions of this Preliminary Agreement. The Participating Institution shall obtain all necessary governmental approvals and opinions of Bond Counsel in order to insure the legality and the exclusion of interest on the Loan from gross income for federal income tax purposes. In addition, the Participating Institution shall make no use of the Loan proceeds so as to cause the Loan to be classified as an “arbitrage bond” within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended.

(f) Reimbursement for Expenses. Regardless of whether or not the Loan is

actually issued, the Participating Institution will reimburse the Authority and the State Treasurer for all reasonable and necessary direct and indirect expenses incurred in connection with the consideration and processing of the application for Loan financing and the preparation of the Loan for issuance, which expenses shall be itemized on an invoice sent by the Authority to the Participating Institution and paid within 30 days of the date of such invoice. If the Loan is issued, the Participating Institution will pay to the Authority its usual and customary annual administrative fee according to Authority policy (as the same may be modified from time to time) and its issuance fee.

(g) Fees and Expenses of State, Bond Counsel and Financial Advisor. The

Participating Institution hereby agrees to pay the fees and expenses of the Authority, the State Treasurer, Bond Counsel, and PFM Financial Advisors LLC, financial advisor to the Authority, as those fees are in effect on the date of closing. The fees currently in effect are shown in the attached Appendix A. The Participating Institution shall pay these fees and expenses at the time of the issuance the Loan; provided, however, that with


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respect to any hourly fees and any expenses which it is not practicable to itemize at the time of issuance the Loan, such hourly fees and expenses shall be paid within 30 days from the date of any invoice therefor; and provided further, that if the Participating Institution abandons or otherwise fails to complete the financing contemplated hereby within six months from the date of adoption of the Authority resolution referred to in the preamble hereto, the Participating Institution shall pay all fees and expenses incurred by Bond Counsel and the Authority’s financial advisor in connection with such financing, which fees and expenses shall be itemized on an invoice sent to the Participating Institution and paid within 30 days of the date of such invoice.

(h) Indemnity and Hold Harmless Agreement. The Participating Institution

hereby agrees to indemnify and hold the State of Oregon, the State Treasurer, the Authority and their respective officials, officers, members and employees (the “Indemnified Parties”) harmless against and from any and all claims, of whatever nature and howsoever arising, by or on behalf of any person, firm, corporation or other legal entity arising from the execution of this Preliminary Agreement or any other actions taken or omitted to be taken by any of the Indemnified Parties or the Participating Institution relating in any way to the Project or the placement or issuance of the Loan or any transaction related to the foregoing, including without limitation any claim or liability arising from or in connection with:

(i) financing and refinancing of the Project and any condition of the

Project or the construction thereof;

(ii) any breach or default on the part of the Participating Institution in the performance of any of its obligations under this Preliminary Agreement or any other agreement entered into in connection with the Loan and the financing and refinancing of the Project;

(iii) any act or negligence of the Participating Institution or of any of its

respective agents, contractors, servants, employees or licensees;

(iv) any act or negligence of any assignee or lessee of the Participating Institution, or of any agents, contractors, servants, employees or licensees of any assignee or lessee of the Participating Institution;

(v) any material misstatement or omission, or alleged material

misstatement or omission, made or omitted in any information used in connection with the placement or issuance of the Loan.

The Participating Institution shall indemnify and save the Indemnified Parties harmless from any such claim arising as aforesaid, or in connection with any action or proceeding brought thereon, and upon notice from the Indemnified Party, the Participating Institution


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shall, subject to ORS Chapter 180 (or any successor provision of law), defend it in any such action or proceeding at the Participating Institution’s expense, and shall pay all attorney’s fees and expenses of the Indemnified Parties incurred in connection therewith at trial, on appeal or otherwise related to the claim for which indemnification is provided hereunder. The foregoing indemnification and hold harmless agreement shall be and remain in full force and effect notwithstanding the failure or refusal, for any reason, of the Authority or the State Treasurer to proceed with the issuance of the Loan. Notwithstanding anything to the contrary contained herein, the Participating Institution shall have no liability to indemnify the Indemnified Parties against claims or damages resulting from the Indemnified Parties’ own willful misconduct.

(i) Policy Concerning Sale of Project. It is the policy of the Authority that

the proceeds of any sale of Loan -financed or refinanced assets shall be applied to prepay the outstanding Loan in such amounts and at such times as may be permitted by the Loan documents executed in connection with the issuance of the Loan, and as the Authority determines may be reasonable under the circumstances. Furthermore, in the event of the sale of Loan -financed or refinanced assets that serve as collateral for the Loan, adequate and acceptable substitute collateral shall be identified and provided prior to or simultaneous with such sale. The Authority may consider release of its security interests in lieu of such substitution of collateral, but only after all other security holders and the Lender agree to the release of their security interests in the assets to be sold. The Participating Institution hereby acknowledges the foregoing and agrees thereto.

Section 3. Miscellaneous. The State of Oregon, the State Treasurer, the Authority and

their respective officials, officers, members and employees, and bond counsel to the Authority and PFM Financial Advisors LLC, and each of them individually, shall be third party beneficiaries of this agreement with the right to enforce the provisions of this agreement directly and individually and without joining any other beneficiary hereof.

This agreement shall be governed by and construed in accordance with the laws of the State of Oregon without regard to principles of conflicts of law. Any claim, action, suit or proceeding (collectively, a “Claim”) between the Authority or any other agency or department of the State of Oregon and the Participating Institution that arises from or relates to this agreement shall be brought and conducted solely and exclusively within the Circuit Court of Marion County for the State of Oregon (unless Oregon law requires that the Claim be brought in another county; provided, however, if a Claim must be brought in a federal forum, then it shall be brought and conducted solely and exclusively within the United States District Court for the District of Oregon). In no event shall this Section be construed as a waiver by the State of Oregon of any form of defense or immunity, whether it is sovereign immunity, governmental immunity, immunity based on the Eleventh Amendment to the Constitution of the United States or otherwise, from any Claim or from the jurisdiction of any court. PARTICIPATING INSTITUTION, BY EXECUTION OF THIS AGREEMENT, HEREBY CONSENTS TO THE IN PERSONAM JURISDICTION OF SAID COURTS.


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This agreement shall be binding upon the parties hereto and their respective successors

and assigns.

This agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the Authority and the Participating Institution have caused this Preliminary Agreement to be executed and delivered by their duly authorized officers or representatives as of the date first set forth above.


By: _________________________________________ Gwendolyn Griffith Its Executive Director

Friends of the Child Advocacy Center, Inc. dba Kids’ FIRST

as Participating Institution

By: ___________________________________________

Name: _________________________________________

Title: _________________________________________

Appendix A to Preliminary Agreement – Kids’ FIRST Page 1

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Appendix A

Oregon Facilities Authority SNAP Loan Program Fee Schedule

As of July 2018

OFA Fees:

Initial Application: $500

Processing Fee: 0.5% of the amount of the loan, up to $600,000, plus 0.3% of the amount of the loan in excess of $600,000 Note: For SNAP Loans closing after July 1, 2018 and before June 30, 2019, the

processing fee shall not exceed: • For loans $1,000,000 or less, 65% of the amount calculated above; • For loans greater than $1,000,000 but not more than $2,000,000, 70% of the

amount calculated above; and • For loans greater than $2,000,000 but not more than $3,000,000, 75% of the

amount calculated above. • For loans greater than $3,000,000 but not more than $5,000,000, 80% of the

amount calculated above.

Office of the State Treasurer Fees:

Closing Fee (based on principal amount):

$5 million or less: $6,000. More than $5 million and less than $10 million: $12,000 $10 million or more: $18,000.

OFA Bond Counsel:

Principal Amount of Loan Compensation Not to Exceed Up to $500,000 $11,500 $500,001 - $1,500,000 $11,500 + .30% for the amount over $500,000 $1,500,001 to $5,000,000 $15,000+ .40% for the amount over $1,500,000 Over $5,000,000 $30,750 + .20% for the amount over $5,000,000

Appendix A to Preliminary Agreement – Kids’ FIRST Page 2

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Financial Advisor Fee: $900 Other Borrower Fees: The Borrower may incur bank fees and fees for its own counsel, which must issue a tax opinion on the §501(c)(3) status of the Borrower and related matters.

Additional fees may apply for certain transactions. Please consult the Executive Director.