05-13-2020 Council Packet - Laserfiche WebLink

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22 future revenues and expenses are subject to, among other things, the capabilities of the management of the Borrower, government regulation and future economic and other conditions that are unpredictable and that may affect revenues and payment of principal of and interest on the Series 2020 Bonds. No representation or assurance can be made that revenues will be realized by the Borrower or the Limited Guarantor in amounts sufficient to make the required payments with respect to debt service on the Series 2020 Bonds. Nature of Limited Guarantors’ Obligations No assurances can be given that, at any particular time that the Limited Guarantor will have sufficient liquid resources to meet any payment obligations that may arise pursuant to the Limited Guaranty. The Limited Guarantor’s audited financial statements for its Fiscal Year ended September 30, 2019 is included in “APPENDIX C - AUDITED CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION OF THE LIMITED GUARANTOR AND AFFILIATES (INCLUDING THE BORROWER) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2019 to this Official Statement. See “APPENDIX B - THE LIMITED GUARANTOR” in this Official Statement for a more complete discussion of the operations of the Limited Guarantor. There can be no assurance that such other operations will continue to be successful and that the Limited Guarantor will have the resources to meet its obligations under the Limited Guaranty. In addition, the total payments payable by the Limited Guarantor under the Limited Guaranty are limited to $4,000,000 (exclusive of any costs of collection of such amounts). The Limited Guaranty will terminate as provided herein under the heading above “SECURITY FOR THE SERIES 2020 BONDS - The Limited Guaranty of the Limited Guarantor” in this Official Statement. No Credit Enhancement Facility There is no credit enhancement facility (letter of credit or bond insurance) securing the Series 2020 Bonds. No Appraisal of the Project Neither the Borrower nor the Underwriter has engaged an appraiser in connection with the issuance of the Series 2020 Bonds. In the event of a foreclosure of the Mortgage, the value of the Project in such event cannot be determined and may be substantially less than the construction costs of the Project and no assurance that the value received for the Project will be sufficient to pay the principal of and interest due on the Series 2020 Bonds. Resident’s Ability to Pay A large percentage of the monthly income of the residents of the 2020 Project will be fixed income derived from pensions, Social Security, and personal savings. Furthermore, investment income of the residents may be adversely affected by declines in market interest rates and stock prices, which may also result in payment difficulties. In addition, residents of the Project will likely be a mixture of individuals with fixed incomes or other government programs such as Medicare. Certain Tax Status Issues Related to Facilities for the Elderly The IRS has also issued Revenue Rulings dealing specifically with the manner in which a facility providing residential services to the elderly must operate in order to maintain its exemption under Section 501(c)(3) of the Code. Revenue Rulings 61-72 and 72-124 hold that, if otherwise qualified, a facility providing residential services to the elderly is exempt under Section 501(c)(3) of the Code if the