HomeMy WebLinkAbout2011-0920 Document Submitted at Mtg ASHLAND COMMUNITY HEALTHCARE SERVICES ("ACH")
Corporate Member Role&Rights
1 Corporate Structure: ACH is a nonprofit/public benefit corporation; City of Ashland is
sole corporate Member. ACH is a 501(c)(3) charitable organization; exempt from federal
income tax.
2. Powers Reserved to City as Sole Member:
a. Appoint Directors to Board;(* but not a City Councilor) remove Directors for Cause
b. Approve(*or propose) amendments to Articles of Incorporation
C. Dissolve the corporation if ACH is in breach of Facilities Lease
d. Conduct annual and special Member meetings
*(e. Appoint a liaison representative to serve as ex-officio non voting member of the board)
3. Assets: City owns real property, improvements, buildings, and fixed equipment—all leased to _
ACH.
a. Lease term 711/1996-- 7/112006; 4 five (5) year renewal options; 30 year total through
7/l/2026
b. Rent: principal and interest on debt secured by the leased assets
C. ACH pays taxes, utilities, maintenance, insurance, capital improvements
d. Prior consent of City required to assign the Lease, including by operation of law such as
merger,and to sublease all of the assets
e. ACH has right of first refusal if City decides to sell the assets
4. Affiliation Options/Impact: City will need to approve an affiliation transaction
a. Sale of assets to ACH or to an affiliation partner
b. ACH sublease of assets to an affiliation partner
C. Merger or consolidation of ACH into affiliation partner's entity
d. Terminate current Lease and enter into new Lease with affiliation partner
C. City withdraws as sole member of ACH and affiliation partner becomes sole member
f. Affiliation partner adds Directors to ACH Board and obtains control
5. Ancillary Issues:
a. Limited Lease tern makes assignment difficult
b. Capital Improvements revert to City at end of Lease
C, Assets owned by municipal entity; additional city and state laws may apply to transfer
or other disposition of public assets.
' -added by Ashland City Attorney