National Association of Higher Educational Facilities Authorities

State Happenings

NEBRASKA

Board Member News

Nebraska Governor Heineman has appointed Lowell Berg to the Nebraska Educational Finance Authority (NEFA) Board of Directors. Mr. Berg is a partner in the architectural firm of The Clark Enersen Partners in Lincoln, Nebraska. He has previously served on the NEFA Board and we are happy to welcome him back. Mr. Berg replaces Roger Doerr of Hastings who served as a Member for four years. We extend a sincere thank you to Roger for his faithful service.

Governor Heineman also reappointed John Munn of Syracuse, Nebraska to serve a second term on the NEFA Board. Mr. Munn is the Director of the Nebraska Department of Banking and Finance. We look forward to another four years of service with Mr. Munn.

NEW JERSEY

NJHCFFA Welcomes a New Public Member

On December 15, 2005, Moshe (Marc) Cohen, Ph.D., was confirmed by the New Jersey State Senate to replace Noreen White as a public member of the New Jersey Health Care Facilities Financing Authority (NJHCFFA). Mr. Cohen is a Principal State Certified General Real Estate Appraiser for Valuation Solutions, specializing in Real Estate Finance, Tax Appeals, and Condemnation. He began his professional career as an economist for the Federal Reserve Bank of New York, after which he began consulting large corporations, municipalities, private investors and developers on real estate finance. He then became a Professor of Finance at Penn State University (Malvern Campus), where he helped found the Graduate Center for Finance, a program designed to provide graduate training to middle managers and corporate executives. Just prior to his current consulting position, Dr. Cohen served as President and Portfolio Manager of Forward Asset Management, Inc.

Dr. Cohen received a Doctorate in Business and Applied Economics, and a Masters in Finance, both from the Wharton School at the University of Pennsylvania. He earned his Bachelor’s degree in Economics and Statistics from Tel-Aviv University, and currently resides in Randolph, New Jersey. His term as Public Member of the Authority will expire on April 30, 2009.

NJHCFFA Eliminates Initial Fees and Reduces Annual Fees

Well aware that many of the NJHCFFA borrowers are faced with mounting financial pressures, on December 15, 2005, the Authority unanimously voted to approve a new fee structure that reduces the costs of borrowing funds through the Authority.

In 2003, the fees were raised after a significant portion of the Authority’s fund balance was contributed to provide additional charity care funds. Having successfully averted its own financial crisis and currently finding itself with a stable fund balance, the Authority determined it could reduce its fees for future transactions, furthering its mission "to ensure that all health care organizations have access to financial resources to improve the health and welfare of the citizens of the State."

The New Fee Structure

For all financings, the new fee structure:

• no longer requires borrowers to reimburse the Authority for fees charged by the Attorney General’s Office for the work it performs on the borrower’s financing

• currently caps the amount on which annual fees are charged at $80,000,000

For traditional and Variable Rate Composite Program financings, the new fee structure:

• eliminates initial fees (10.31 basis points in 2004 and 2005, based on the original principal amount of the bonds)

• returns annual fees to 10 basis points based on the original principal amount of the bonds and eliminates the annual adjustment for inflation

For the Equipment Revenue Note Program, the new fee structure:

• eliminates initial fees

• reduces annual fees to 7.5 basis points

For the Capital Asset Loan Program, the new fee structure:

• reduces the initial fee to $500 (previously $5,000)

The structure also enables a new Authority concept to assist hospitals in financing "Terrorist Preparedness Projects." These are projects that are mandated by the NJ Domestic Security Task Force but are not reimbursed with State or Federal funds. Projects financed through this program will have:

• no initial fees

• an annual fee of only 5 basis points

Executive Director Mark Hopkins noted, "The Authority’s goal is to charge only those fees that are necessary to provide health care organizations with efficient access to capital markets through the work of our highly qualified staff." The new fee structure requires that 50% of the first year’s estimated annual fee be paid by the potential borrower at the signing of a memorandum of understanding with the Authority. This non-refundable deposit will not be returned to the borrower if the financing does not close. However, if the financing does close, the deposit will be credited to the payment of the first year’s annual fee.

This site was last updated on 03/09/06 .