Alright, so I'm gonna call this meeting to order at 6 p.m.

on the dot, I think.

Um so let's go ahead and get started.

So let's first start with attendance.

So Ryan Holly is present.

I'm in the chair.

To my left, I have Councilman Michael Henry, and then to my right, I have Councilman Lou Giordano, the seventh ward.

Um ex officio in the room.

You start uh let's start the table, just announce yourself and uh John Lapion, second ward here in the bench and AT6 ward show Frank Salvatore, third ward, Peter Bazay, third ward.

I'm gonna hide at large, and Dre Gartner and Fifth Ward.

All right, and then at the table, the members of the committee, who I just skipped over.

Let's over here.

Uh Dan Castogrande Corporation Council.

Robin Edwards, Deputy Corporation Counsel.

Taylor O'Brien, Chief of Stafford.

Hey, Derek Director of Finance.

Glenn Santoro, Robinson and Cole Bond Council.

Thank you.

And then ex official member, councilwoman Candace Faye is here, and then members of the public and Burton.

Hi, Steve Courtney, Danberry Proton.

Thank you.

Uh Greg Burton from Carmody Torrent Sandack and Hennessy, counsel for the uh developer.

Thank you.

Mike Grell, uh lobbyist government relations for Danbury Proton.

Joe Piscotel, DMG worldwide, we're advisor to Denver Proton.

Drew Crandall with Danbury Proton.

And then Jeff Harrell, citizen.

Tom Brown also is a citizen.

Awesome.

All right, did I miss anybody?

All right, I think we're good.

All right, so we're all present.

Um before we begin, I should want to kind of uh briefly outline how uh tonight will flow.

So first we're going to be hearing a prepared presentation from Danbury Proton.

During that presentation, I ask that you keep your comments and questions uh to yourselves and just keep those held until we get to that portion.

Following that, we will hear from both the mayor's office and our bond council to provide their respective perspectives.

And then uh after we hear from those uh bodies, we will the members of the committee will open the up to questioning.

And uh then after the questioning has been exhausted by members of the committee, we will go from left to right for ex officio members to ask any questions.

First, we'll start with members of the table, then go out to the um outer ring.

And I'm just asking everybody to please keep your remarks uh succinct, and I'm really just trying to focus on one question, one follow-up because there's a few members here, and this is uh a decent matter that we should should be um allocating some time to discuss.

So we want to make sure everyone has their um ample time to ask questions, and then also just reminder to ex officio members in the room, please.

When you're addressing your remarks or remarker through the chair, and then uh after we finish the full round, we'll go back uh the same way.

The committee will be asking questions or comments, and then we'll open up to right to left for final rounds of questioning, and then we'll be at the point where we could uh either make a motion to recommend this to the council or possibly extend this ad hoc if we get to that point.

So that's kind of uh the way I want to run things tonight.

So um with that, I will pass it over to Proton and we can start the presentation.

Thank you everyone for being here.

All the council members in particular, legislators, etc.

Um, particularly Mike and Lou who have a responsibility here.

We have brought key members of our staff who just briefly introduced themselves there.

Um I know life is short and there is not much time, so we'll try to make haste with our presentation.

Uh first of all, um what we'll do is explain the city's role as a conduit issuer.

We'll clarify the legal and financial projections.

We'll outline the bond issuance process, focus on the proposed bond resolution in particular, and identify the direct benefits to the city, which uh we'll say twice because there's some significant ones uh in terms of direct financial benefits within the first two years.

You'll get 250,000 at bond closing, $30,000 uh for monitoring services, if you will, for uh for every year.

And because it's of the construction complexity, etc.

There's an awful lot of building permits uh that are actually necessary, so there'll be another $550,000 uh during the two years of construction that also comes to the city.

And then annually, the city will get those um monitoring fees uh as well.

Just a brief recap.

I'm sure most people know what proton care therapy is here, but very briefly normal uses an X-ray beam.

And the protons, we use just the proton.

They have very different wave characteristics, as you know.

As you know, X-rays go completely through your body.

Uh, the wave characteristics is very high energy, and as it goes through your body, it diminishes.

Uh, it hits the tumor in there, but it also hits all your healthy tissue both in front of and behind the the uh the tumor.

Whereas protons has a very different wave characteristic, very low energy as it enters the body, has a thing that's called a brag peak, explosion of energy that hits in the tumor, and then that's it stops, it doesn't go beyond that at all.

So much much better protection of your uh organs at risk, um, and that's that's the big difference.

So, again, heart, lungs, bone, healthy tissue are much better protected.

It also allows us to up the energy level in the tumor to more effectively kill the cancer.

So we're this is the facility that we hope to bring to your city.

It's very innovative and echo-friendly.

Uh, we're using geothermal energy to heat and cool the building.

There will be no gas lines or other fossil fuels coming to the to the property.

We do have an emergency generator, which will use diesel that will test once a month.

So there'll be a little bit of burning, some fossil fuels for that.

Um we size that generator so that it can treat uh keep the whole facility going because when you're under treatment of proton therapy, you really don't want to have that interrupted, and so every they're there typically uh five days a week for a couple of months sometimes.

This is the facility, a section cutting through showing the proton equipment uh inside.

The this is a key decision that any proton facility has to make is whose equipment are you going to use?

Uh Mevion is the equipment that we've been working with for years and feel is is absolutely the best uh out there.

There are three other manufacturers.

This is the only one that's made in the United States.

It's up in um just outside of Boston and uh just a few miles from us.

There are significant benefits to the center, obviously for the patients and their families, um local and regional health care providers, all the other health care providers in the region will be able to send their patients to us to do that small part of their treatment.

Most cancer patients are getting some surgery, they're getting some radiation, they're maybe getting some chemotherapy, those kinds of things.

Uh, so we provide essentially the service for the region by providing proton therapy for them.

Um there'll be a lot of medical research.

Almost all the patients will be on clinical trials, which will be adding to the knowledge that we have on how to treat cancer in the United States.

It'll be very good for the local economy in lots of ways, and we'll get to that in a minute in a minute.

And obviously, it's good for the city in general.

For the patients, again, it's more exacting in terms of uh where it hits you and experience those organs at risk.

It's also particularly useful for return cancer.

Um especially if you had radiation the first time when the cancer returns, you can't use radiation again.

You've already had too much exposure.

So, really, proton therapy is your only choice many times.

There'll be uh, as I said, there'll be relationships with uh all the regional health care facilities.

Um they won't have to build their own proton facilities, as you know, these are incredibly expensive.

And it it by having one in the region that serves everybody, you don't have to have multiple units.

Um that said there'll be lots of research.

The the machines can actually be used for proton research in the off hours after after midnight.

There are kinds of products that want to get zapped and see see how they perform and things like that.

So there'll be that kind of research that also comes out of it.

Um we love that the universities here will definitely be partnering with the university and anything that they might want to do there, and certainly um getting uh interns and things like that involved in the church.

I mean, and in the future in the facility.

We also uh there's a medical school just not too far out there in New York at Vahalia that wants to also place residents in here to train them during medical school.

The economic benefits.

Um, it we use the word planted because of all the concrete that goes into this facility.

This is not a facility that you can easily move from one place to another.

Um, so it's something that you can count on.

It's not gonna leave your city if economic winds said to leave, it's gonna be here for a long, long time.

It's on a on an empty lot that frankly, uh given how hard it was to get through the FAA approval.

I don't think any other kind of if it hadn't been a cancer facility, it would never have been approved by the FAA.

And right now uh there's less than a thousand dollars a year on property taxes, so it's really not any kind of loss that way.

Um there'll be a lot of high-paying construction jobs during the first two years, but more importantly, uh there'll be 30 plus professional jobs and a flopping um uh payroll of about six million dollars, which will ripple down through through the economy.

Um it's uh um there'll be some health care tourism here, it would be great for the airport.

It tends to draw people even internationally uh to various proton facilities, and with this one having it very easy to get there for those folks, I think it'll give them preference to come to this facility.

The community has been very, very um uh enthusiastic every time before the boards, the the building permits, everybody has been totally supportive of this effort.

Um it's also uh they tend to draw other health care facilities to come uh to build near them.

Um so it's it's also going to be generating economic development that way as well.

This is a timeline of the projects.

Um a lot of our people started started in here early, but uh Sattel actually was doing finance in the earliest project Loma Linda, um way back when we are uh doctors um Dr.

Yanamoto and physicists uh started Loma Linda.

So really the team that you have here in Danbury are pioneers in the business, they've been in this for a long time.

As you can see, the popularity of this project type is uh significant.

The this is just the facilities in the United States, they're 95 throughout, in addition to this throughout the world.

Fortunately, Connecticut has another facility already under construction, so soon patients in Connecticut will be able to have proton therapy here.

One facility is not nearly enough for the region, so that's why the C the OHS said, Oh, yeah, you're right, we really do need a second machine.

And took us a while to get to that answer, but we finally did.

Um there's been um some concern about uh a facility in Atlanta that's had some financial difficulty, they're having to restructure their facility.

We are significantly different from them.

They are big big five treatment room facilities, so the capital investment, I think is something like 550 million dollars.

Um we have a one-room solution.

It's the way proton therapy has been developed in in recent years.

The last 13 facilities have been single room facilities that overbuilding initially uh has really caused a problem uh for a lot of the multi-room facilities.

This will continue, they're treating a thousand patients a year, over a thousand patients a year.

This will continue to treat patients even though they're going through some restructuring.

And and the same thing would happen for us.

If somehow our project got in trouble financially, the patients would continue to get patient uh treated, they would just restructure with new financing.

It's too valuable a service, too valuable equipment, nobody's gonna lock the doors and shut it up.

It's gonna, as a matter of fact, on this project.

Um, although the umory is hoping that they can secure it uh for 110 million.

There are a lot of other investors are already very interested in in this project.

So if somehow ours went down, there would be a lot of people that would be more than happy to take a damn green facility.

Um as we said in the graph, things are happening all the time.

Duke just last week announced their facility, they're doing a two-room treatment facility.

They uh that they're helped by 50 million dollar gift, which we don't have.

It would be nice to anybody want to do that, that'd be great.

Um but uh so these these are continually uh coming uh coming forward.

Uh this Joe, you want to talk to this one?

Sure.

What do I push?

Okay.

Greetings are ready.

Joe Pescatello.

We're in the business of developing and uh advising on structured bond transactions in the municipal bond market.

Um this deal is right size for municipal bonds because it has access to capital with long-dated maturities.

Uh, you know, you don't want to do a long-term project with 30-year cash flows with five-year bank debt.

So the municipal bond market is really a project finance outlet and is primarily used for long-term projects.

My firm does things such as airport financings, uh, we do um senior housing, we do educational facilities, you know, we do proton therapy.

And I've been involved with Steve and the team for I guess since 2017 when we started this deal because of another transaction I was working on with one of the partners, and we were brought in, and I uh I kind of have a personal uh crusade on uh on cancer because every one of my aunts and uncles on my mother's side of the family died of cancer.

So seeing that go through, and when I was approached on this, and as it as Steve pointed out, I worked on the very first day uh Proton Facility uh project in the United States, which was in San Bernardino, California.

I I guess that makes me old, but anyway, that was about 2,000.

At that time, there was one.

We also through our London office worked on one in Gronagan in uh Denmark, I guess is that anyway.

So we've been hanging around a hoop with Proton for a long time.

Steve's company has a couple more lined up.

Our job was to create the financial structure and to go out and to find an investment bank that could get the best execution to raise the money in the bond market.

In every deal we do uses what's known as a conduit issuer.

In fact, we spoke to the city about becoming a conduit issuer because uh I spend every day of my life dealing with conduit issuers.

Essentially, what they do is they create capital for private projects, and by being a conduit issuer, you are a lending tax exempt authority to the developer of the project.

So that's the important thing about a conduit issuer.

Without a conduit issuer, you can't get taxes and bonds unless you, as a city or as a state or whatever, can go out and issue it.

So a project such as this, you need a conduit issuer.

We've completed 600 million dollars of projects this year, all with different conduit issuers.

Okay, so as I said, they're necessary.

Um a lot of them, they make a lot of money.

Uh and as you can see in this deal, you guys would be making I don't know, 800,000 over the first couple years.

Some of the conduit issuers are massive.

They have you know 40, 50 billion dollars of debt that they've sponsored.

So you guys can grow.

I mean, if you think about it, other potential projects for the city of Danborough you could put through the conduit.

But let's I'm going astray here.

Let's talk about the project.

Right now, the project's we got approval for 130 million.

The reason for that is when we first started the project six years ago, it was like 90, 100 million.

Prices go up, interest rates go up.

In order to do a bond deal, you have to have reserves, you have to price the reserves based on interest rates.

So, right now the deal is hovering at about 115 million.

So we want some headroom.

Hopefully, we'll be in the market in March.

We want some headroom to have the deal done in uh March.

So there's 15 million levity in case we have to go out and raise more bonds.

Just so you know, if if it was 131 million, it's a problem because you're only authorized to sell bonds up to 130 million.

There's a way we'd have to get private money to do it.

But that's in case people are wondering why that number is that number gives us headway to go out and raise more money.

So the project's 115 million.

And the the bond market, as I was talking to this gentleman in the corner before, a lot of people don't realize how big the municipal bond market is.

There's 4.4 trillion dollars of municipal bonds in the United States right now that are outstanding.

This sector for project finance is done through what's known as the high yield market.

The high yield market has 250, 200 and some odd billion of outstanding bonds right now.

So we're not talking about going to you know Dollar Tree and raising money here.

This is a proven market, well regulated by the SEC and a municipal securities regulation board.

Municipal Security Regulation Board.

So everything we're doing is safe, sound, done properly, best attorneys in the world.

And yeah, we can talk about uh that as we get further on.

Okay.

I guess it's me.

All right.

What a condo issuer issuer is in order to raise money, the conduit issuer has to be a uh organized, and uh Robinson Cole did that to organize the city to be a conduit issuer so that they could essentially uh lend the tax exempt authority to the um project uh project entity.

The conduit issuer issues bonds, all the proceeds go towards the project.

So this is not like you know, it's going into a corporation where we can go and you know go to the Super Bowl or anything like this.

It's 100% designated to the project, and the money sits with a trustee.

And a trustee is Wilmington Trust, which you guys may know it's a subsidiary of MT Bank.

Everybody knows MNT Bank.

I mean T Bank will likely be one of the banks involved in this deal.

Blooming Trust is a trustee.

So in closing, all that money goes to Wilmington Trust.

The city does not uh have any risk.

Uh effectively when you look at the the language in the documents, essentially the only rep and warranty you make is that you exist and you have the ability to be a conduit issuer.

You don't plan to pledge any taxes, you don't pledge any assets.

If there's a problem with the project, you don't have to contribute any money.

This project in Atlanta was done through a conduit issuer who has no obligation to do anything.

Uh we can spend some time if some people have questions later going through how to bankruptcies are going.

Uh, and you don't guarantee any payment.

You don't put up any capital, no payment.

There's nothing that a conduit issuer has to do other than follow the letter of law to allow the companies to raise taxes and bonds.

Once again, the bonds are non-recoursed to the city.

Oh, it's correct.

Okay.

I'm done.

Um so as Joe was saying, um the the bonds that are issued are not recourse to the city, meaning that that the trust estate, what's held by the trustee is the sole source of repayment.

So that'll be the mortgage on the property, the pledge of the equipment.

Uh that collateral is the sole source of repayment for the bonds.

So that repayment um that repayment repo uh responsibility belongs solely to the project.

So only the the project itself is responsible uh for paying uh for paying back the bonds over time.

There's no there's no personal guarantees, there's no individuals that are that are responsible uh for paying back the funds.

Everything is set up in these bond transactions so that uh all of the collaterals, just the project itself, the assets of the project, the facility, the equipment, um, which are all you know tremendously valuable um uh resources and assets, uh, that is what is available uh to repay the bonds.

Uh so the bondholder recourse, uh, if there is any financial trouble, is just to uh those trust assets.

There's a a process within the trust indenture uh which governs that allocates funds to make sure that the the funds that do come in from the operation of the project are allocated uh in appropriate priority to ensure the continued operation of the facility, the payment of of priority expenses, um, and and that's all set out in the in the um in the trust indenture.

Uh so as Joe kind of alluded to this, but you know, there's no city taxing uh power that is pledged, there's no impact on the city credit rating, so it's all it's not only that the city is not you know pledging any of its own assets, it's also not it has no effect on the city's credit, and there's no city assets at risk.

Steve?

And the project owner, uh, there have been some questions about uh the board uh of LMS.

We sent that off to uh Farley, I think you distributed some of that.

Uh we took the uh opportunity to put some of our principal's resumes there as well.

The board is made of uh pastor that uh it's uh is a personal friend of mine.

Well, only it's a frankly personal friends of mine.

Uh there's uh a female attorney, uh male attorney, a uh an engineer, and an accountant.

Um the resume has been quite provided, they're quite accomplished individually on this board, they're volunteering their time.

There's no stifling for their just uh you know the importance of proton therapy, and really this uh uh 501c3 was created for this almost sole purpose of creating proton therapy facilities.

Went through a long process, a 1023 process with the IRS.

Um it took us um probably a year and a half two to actually get the ruling from from the IRS uh that uh it would be a charitable uh uh public charity, um which makes exempt from income taxes.

Uh donors can uh donate to the organization and take uh take that exemption.

Um sales and property tax are exempted by this by state statute and confirmed by the city assessor.

Um the uh that tax uh assuming that it gets confirmed by the assessor is reviewed every four years, just like every other 501c3 in the state.

Uh everybody gets reviewed, uh just got reviewed last year, year 25, the next year, four years will be 20 um uh 29.

Um so if for some reason this facility looked like it was making gobs of money to the board, uh the state could say, hey, listen, can't can't we work something out here on sharing some of that.

This is back to you, Joe.

Okay, so we have in order to complete the sale of the bonds.

There's uh, oh by the way, one thing ELIMOS has a 51c3.

In case you were wondering, because I said the conduit is required to get taxes and bonds, conduits can only lend money to certain organizations.

513 is a qualified organization.

So the the conduit couldn't lend money to Steve's entity and let it be tax exempt.

And the reason is Ilimos owns the project.

So when it's done and finished, and the debts paid off, IlyMos owns it.

It's owned by a charitable organization, it's not owned by Danbury Proton as the developer.

So this is so a lot of times when you get developers, they're confronted with the issue.

Do I want to use tax and bonds?

Which means I have no residual interest in the project, versus am I gonna get I'm gonna have a lower cost of capital with a little longer duration because I could use taxes and bonds.

So in this case, the project financing for tax exempt bonds, the project financing of proton with tax and bonds made the most sense, given the other alternatives in the marketplace.

All right, so anyway, so in order to get the deal done, we need the bond resolution to be approved by the city, and we understand that's on slated for March 3rd.

Oppenheimer and company was hired as investment bank on this transaction.

Oppenheimer is preparing an offering document, it's called a preliminary offering some statement.

That deal will be mailed to uh the bond market.

Uh all people you've heard of Naveen, uh Rockefeller, uh, everybody here who owns tax and bonds, Merrill Lynch bond fund.

They all will get copies of this.

It's issue, it's mailed sometime after the third third of March when it when it's ready and the attorneys approve it and everybody approves it.

Subject to SEC requirements and subject to MSRB requirements.

Uh the marketing takes about two weeks, so that we can get the best price from the investors, we can answer questions, they can meet with the principals.

And then from then you move to a bond closing.

Uh the bond closing typically takes a week to two weeks.

The reason it can't happen right away is when you get the proceeds on the sale of the bonds.

Wilmington trust is sitting with 90 million dollars.

We don't spend, we don't give Steve 90 million dollars on day one.

He draws down as he needs the money.

So think of a construction loan for anybody who's been in the construction business.

That money is held by Wilmington Trust who will issue based on draw requests.

So while that money's sitting there, it gets invested.

So we we hire a bidding agent, which is required on the tax law to go out and get the best investments to get the highest yield for the money sitting in the trust accounts.

Right now, that is uh GIX with a guaranteed investment contracts.

That's the best investment values that we've seen in the marketplace.

Uh when the deal closes, essentially it's a wonderful thing.

Everybody should be on phone call.

You get on the phone with the DTC, which is depository trust corporation.

There's somebody on the other phone, they give you a number, you give them a number, they say, okay, here's your QCIP, boom, you close, that's it.

Money immediately transfers by wire.

It goes to all goes to uh Wilmington Trust, and everyone who's uh going to get money closing, like the city's administrative fees and stuff like that, will submit an invoice to the trustee for reimbursement.

And pretty much is that's it.

It's a big market, it's an efficient market, and as I said, you know, there's four trillion dollars of the stuff out there, so it's not you know, it's not something that hasn't been done before.

Okay, to reiterate what Steve said before, you guys will get 250,000 of close.

You get $30,000 a year to monitor everything we're talking about.

You know, the city wants to make sure that all the reports are done, that would there's a requirement called continuing disclosure under SEC rules for municipal bonds.

The continuing disclosure reports have to be filed, you guys will get copies of them.

Uh and then, of course, you'll get all the normal fees that a city would get for development, you know, uh permits, et cetera, et cetera.

So as what's it eight?

It adds up to 860,000 in the first year, first two years, two years, and then after that, 30,000 a year.

And then if there's any expansion on the property or anything, obviously you'll get fees on that.

Back to Mr.

Courtney.

I I will mention also that the uh planning and zoning approval for this project anticipated adding a second treatment room to this facility.

So if we really did uh need to expand because we just can't treat everyone, which it frankly is a very responsibility because even two facilities in Connecticut's not nearly enough for this region.

To reason uh they have designed their facility also to be able to add a second room.

So it's it's likely that there'll be another room added uh one site.

They just dig a little bit more of the dirt out and cover it back up with the grass just like we did the first pool.

Um so you know, essentially uh we all kind of worry about fear, right?

Uh so there's really very little fear here for the city.

There's no exposure.

The responsibility is solely with the public entity.

Exposure.

And transparency is built into it through primarily through the SEC rules about how this all works.

So it'll be very clear uh what's going on with the project.

Key takeaways of the city is an issue of the bonds to facilitate the financing of the project.

The city is saying there's no responsibility for repayment, and the city receives fees for that process.

Really, it's kind of simple in lots of ways.

And that's our presentation.

And we're certainly willing to uh answer any questions, but uh uh Brian Ryan wants to uh let others go first.

Yeah, so uh I'll pass it over to the mayor's office to see if there's any color you want to add immediately after that presentation, and then we can open it up to uh questions from the committee.

Sure, I'll uh um thank you.

I'll uh Charlie speak from an economic perspective.

I could speak just from initially what we just saw, and what we've known is the reason why this project came to you all when it comes to the um fact that there won't be a financial liability.

Now I'll say to you all you're new to me as well, right?

You're a newer group in my opinion, as to you are to the council, but uh we do have the um bond council here who's been with the city for over 20 years now, right, Glenn, and has told us the same thing.

So this would not be on your your desk today.

This um would never have come up to the council at all if we didn't feel that uh it would one increase uh an economic development gain for the city of Danbury, and two, it does not hurt um or touch the taxpayers uh at all.

Um we did negotiate a fee as as was discussed here.

Um, and Glenn can speak to that further.

But uh the reason why the mayor has brought this to the council is because we feel it's a good investment for the city to be a part of it, it's a new idea to many of us.

Um, the conduit issuing is not new in general, right?

This is one project that's coming to you, and and we could always explore um others in the future if it's something that the council decides that they are open to as we see it as a benefit and not anything to harm us.

So I'll let um Farley jump in from an economic perspective.

Thank you, Taylor.

Um, from the economic office perspective, what we're looking for is what differentiates Danbury.

When I'm out there going to other communities, perhaps even other states to talk about why Danbury is different than everybody else.

I want to sell the city as being a differentiator, and we know we have some uh baked in um leverages, right?

We're geographically blessed where we are, gateway to New England, right?

Um we know that we have uh the workforce here that is highly trained in so many aspects, but it's also a very diverse workforce.

Um for the mayor, his goal is to bring in opportunities that don't just simply create jobs but create careers.

That's his focus.

And we can see that in a facility like this, 30 to 40 jobs, many of them would be careers that are coming here to the city.

And the economic benefits speak for themselves, right?

These are perhaps new people coming into the to Danbury to live here and work here.

You these are folks that are perhaps the patients and people that are coming with them to um stay at hotels if they need to go to restaurants, right?

There's immediate economic benefit right away through the construction phase.

Obviously, there are those construction jobs that will benefit um organizations, if not in Danbury, in Connecticut, right?

Um, and so there are there are those opportunities as well.

Um I'll also speak to which I also think falls under the economic uh umbrella is the health care accessibility that we are providing for our residents here, right?

And the opportunity to have a different kind of therapy through one of life's most difficult challenges.

I actually can't think of one that's most more difficult than someone going through cancer.

Um as was mentioned in the slideshow there, uh facilities like these also bring other health care facilities to the areas in which they're serving.

Being one of two in the whole state of Connecticut, being very close to the New York border, they're going to attract a lot of folks from New York coming to Danbury for this therapy.

They're not gonna go all the way to Wallingford, they're gonna come here, right?

Um, I I just think that if we look at how we differentiate ourselves from other towns and cities, now we have a tool in Danbury's belt in order to bring and attract businesses in other ways that we may not have been able to in the past, and that's through this conduit issuer um of bonds here.

And I'll let Glenn speak a little more on that.

But for us as a city, I think there are many economic benefits here and also many benefits for our own residents right here when it comes to health care accessibility and such.

So Glenn.

Sure, thank you.

Um portion of the presentation uh that mentioned the liability to the city.

We've discussed at prior ad hoc meetings.

Uh, it is correct under the act, as we've discussed previously.

The city is not liable.

Taxpayers are not liable.

There's no full faith and credit pledge by the city.

This debt, whatever it may be, 130 million, does not is not shown on the balance sheet of the city.

Um it's just a special obligation of the city as a conduit issuer.

The revenues that were mentioned earlier that are pledged from this project are pledged to the trustee.

The trustee uses those revenues to pay the expenses, the debt service.

So the city is merely issuing the bonds, letting the proceeds to LMOS, and then the project moves on, but the trustee holds those bond proceeds and pays expenses as are incurred.

So the city is merely, as is mentioned many times, a conduit issuer, but the city is not on the hook for the debt service on the bonds.

All right.

Um, any questions from the committee?

I'll start with that.

Yes, to the chair.

On the January 6th meeting, the resolution authorizing the issuance of sale series bonds 2026 was not to exceed 100 million dollars.

We're now at 130 million dollars.

Should that go back to the council for another vote?

Um that's a good question.

Um I mean, I think this committee's charge is to um recommend to the council based on your findings at the ad hoc.

Um I don't know at this point.

I'd have to do some research on that.

We're outside of the purview of the issuance of bonds at 100 million dollars not to exceed.

So we've gone two adjustments to 20 to 30 million dollars, two adjustments.

The council did not vote on that.

Well, they just voted to refer it, refer it at not to exceed 100 million dollars.

Right.

If you may if you as a committee make a recommendation, um, can we just jump in here?

This is Christie Jane with Robinson and call so um and corporation council will verify this that there's no procedural limitation to this, but um, in a meeting such as this where the action is referred to a committee, this body is acting as an extension of the council.

So you're not so any decisions made tonight, any discussion on the resolution, any um dialogue that you have on the ultimate recommendation that you're making to the larger body is not outside of the purview of that initial discussion, regardless of whether or not the paramount changes on the resolution, that is ultimately a decision that will be made by the full council sitting and everybody making their approvals, but the ability to have the discussion and to make a positive referral or a reference to the larger body is within the purview of just you know Roberts rules of orders in general um legislative practice.

Um and obviously corporation council will confirm that, but this meeting as it sits with a larger paramount does not um go in contravention of the initial council's referral to this committee.

My instinct uh as I think about it is that if this were a bond issue that was in which the taxpayers were gonna have liability, I would say yes.

It would have to be recommitted.

But given that the fact that there is no tax liability, uh I'm not sure that you could view this as a substantive change.

That's that's my instinct.

Yes, I'm sorry, I think the chair.

I think we just kind of uh councilman Henry, you said the city council voted.

I want to be clear when it's sends to an ad hoc, there's no vote on that.

So there was no vote in this.

It was the resolution was to not exceed 100 million dollars, which came out of council.

The resolution was given to the council and it was called to an ad hoc.

There was no vote made by the council, so now the ad hoc is reviewing what's proposed in front of you.

So there have been times where we'll call an ad hoc without a resolution and we'll give you the resolution at the meeting.

You've been given an updated resolution at this meeting to make a recommendation to the council.

And I'm really paraphrasing what uh Robinson Cole just said as well.

But I just want to be clear that there was no vote by the council.

Like tonight we can rewrite the entire resolution, and that would not require a vote by the council.

Exactly.

It was it wasn't voted for previously, is what I mean.

Got it makes sense.

Yeah, yeah, rewriting it, you're just amending it from that.

Yeah, it's been amended twice.

And then I guess I just have a question for Proton, I'm not sure who to directed to.

Um can you explain the change?

Um in January it was listed as 100 million, now it's 130.

Um why was it not 100 or 30 from the beginning, just like a as a question?

No, we really should address that subject.

Okay, um you had to explain it to me.

When they first went to the council, they included only the senior bonds, which are um underwritten by the investment bank.

So the which were floating around between 90 and 100 million bucks.

Right now they're at 90.

Let's hope they stay there.

But there's two additional issues.

There's uh three and a half million dollars that the equipment supplier is also investing in a deal, which makes every should make everybody feel good that they're backing up the equipment by putting three and a half million dollars in your money.

And Steve's group is putting in over 20 million dollars of money.

Those two issues, those two separate bond issues, and you know, we have we love to label things.

So the A bonds are the senior bonds that are uh underwritten by Oppenheimer, and that's where you get Merrillynch and you get New Veen and you get Kemper and you get everybody else to buy those bonds.

The B bonds are are spoken for by Mevian, who's the equipment manufacturer, they're gonna get a separate bond issue for three and a half million dollars.

The C bonds, which are Steve and his group, which are 20 some odd million dollars, are uh also what we want to make those taxes empty.

So, in order to make them tax exempt, it has to go through the conduit.

Okay, if we didn't have them as tax exempt, then we wouldn't have a problem.

So the problem here, the problem was when they first went with the number, they didn't include the B and C issue.

Okay, and frankly, there's actually a B1B2, C1 C2.

We can get into the craziness as we get closer to issues.

But so that's why it was only 90 at the beginning, or only 100 in the beginning, because the B and C were overlooked.

Okay.

I'll take the uh responsibility for that.

Even though I don't know, but all right, and then I just had a question.

Um, what happens if this does not happen by three to three?

How does that change the time frame?

Uh so in terms of the resolution not getting passed on the third well it's kind of binary.

Is it happening if it doesn't happen on a third, is it dead, or do you just get to deferred to another date?

Which one?

I guess I guess either.

Okay, I'm not sure.

Well, if if without a resolution, we can't raise money.

Okay, so the deal is dead in the water unless uh you know we can go get some uh commercial bank to lend the money.

Okay, but I can say it's pretty hard to find 130 million dollars anywhere in the marketplace right now.

Um so if it's delayed, delayed just means you're pushing the can down the road for whatever reason, but you're gonna, you know, we need a bright light as to when we think that's gonna happen.

Right?

So if it's the third and we think we're gonna issue bonds in the 15th or 20th or whatever, um to or we're gonna go to bondholders.

That that's a target.

So we really need a target.

The bond, everything is getting done.

The bond everything is getting done, you know.

You've got a bunch of accountants, lawyers, and guys like me going through all the documents to make sure the offering document is done, the bond indenture is done, and the loan agreements are done and ready for presentation to the bondholders.

We just need to target a date because once you guys say yes, then we what we call mail the offering statement, and then we set up meetings with the investors, which are done Zoom more than anything these days, okay, or Zoom or teams.

So we just need to have a schedule.

So if you can't get the third done, it doesn't kill it's not, I mean, it's not toxic, it's a pain in the neck, frankly, because all it does is increase costs because it defer stuff, but it doesn't mean the deal's dead.

Okay.

If you say in the third, forget it, Danbury doesn't want a proton center, you know.

Uh we would be shocked, but you know, we'd have to move up.

Let me I'll just add to that too.

That um, you know, I think people are aware that you know there's a lot of uncertainty in markets, especially now.

Um, and so one of the challenges with not having in the and on our on our calls with the underwriters, this is one of their concerns is that it's hard to know where interest rates are going to go in the future.

It's hard to know what the future is going to look like.

So bond investors look at a relatively short time frame, and right now we've got uh you know financing models that are workable.

Um we don't know what will happen uh in 30 days.

Um, and so time is of the essence, frankly.

Um, any time you're doing any transaction in these kinds of markets, just because we don't know what the future holds.

Time is your enemy, always we we say time kills deals.

That's that is that is absolutely true.

Uh time kills deals.

Any questions?

Oh, sure.

Um I'm not sure.

I guess this would be toward uh directed towards uh Proton, but um uh I was reading uh in the uh news times uh I guess it would have been uh um in uh March of 2025 that um uh there were some conditions that were uh required by um the state of Connecticut um to Danbury Proton uh to uh allow um the uh the deal to go forward, and um one of them reported in the paper was that um uh uh there would be uh um uh a certain uh um percentage of uh Medicaid uh service and Medicare service.

And um uh and so I I looked uh you know I looked into that settlement a little bit and um uh yeah and and it it it uh it defines uh um you know quite a bit of uh um conditions uh regarding uh Medicare and Medicaid coverage.

Um but uh that settlement was with Danbury Proton, and now we're talking about uh Alemos.

Um do all the conditions of that settlement uh carry through um from Danbury Proton to ELAMOS.

And can you speak specifically to the Medicare and Medicaid uh yeah, all those conditions are are conditions of the CON that lasts for the for the entire life of the of the project?

The um about 50 percent, frankly, of our patients are gonna be Medicare patients, so that's a real easy number.

Medicare is gonna be somewhere around two to five percent.

That's also part of our um our charity care.

We have a charity care policy, so it's based on people's uh income and things like that.

So uh definitely Medicare Medicaid's taking taking care of.

No question about that.

Um you mean Medicaid would be two to five percent?

Yeah, and Medicare is fifty percent.

Yeah, sorry to say it backwards.

No, I think I heard Medicare twice.

So I just wanted to be sure I don't want to correct you.

Thank you for the channel.

I just want to make sure I'm a thing.

Um but yeah, and uh um that that uh Greg, you stood up, you probably have something you want to add.

I was just gonna add to that because uh my colleague uh Dave Har uh Dave Hardy who who worked on the the settlement there, we were we were looking into this recently because the investors the the underwriters had some questions about that as well.

And this in the settlement with uh with OHS to receive the CON.

We actually had contemplated the um the nonprofit involvement, so that's actually included uh in that uh in that discussion with OHS.

So uh OHS is aware of of the involvement of the nonprofit, which was necessary in order to secure the financing.

Um so we we just looked into that recently.

Yeah, thank you.

Yeah, so it's it's not I just want to let you know it's not that Ely Moss is sort of new to OHS.

That's that's been part of the discussion with them uh throughout the settlement process.

Okay, thank you for that clarification.

Has this project ever been fully funded or privately funded before you came to Danbury?

No, this is this is uh this is the one project uh that's coming to Danbury.

I'm not quite certain I understand your question.

Have you been approved for private funding through the private sector?

No, prior.

No, never went to the private sector.

Final approval 2025, the project was approved in January 25 is a 72 to 96 million dollar privately funded project.

I'm I'm sorry, I'm not certain what you do.

The question is, I'm sorry, I'm not getting privately funded or attempted to privately become privately funded prior to coming to Danbury.

I don't know, and I don't know what that was.

Where did you read that?

No, we haven't applied for financing anywhere.

So if you previously have to you have to apply to private funding first become before you come to a municipality?

No.

You don't have to prove that you can be funded or not funded, no.

Okay.

No.

Well, we were we've been waiting for Danbury to become a conduit issuer because there were conduit issuers in different parts of the country that would have done it, but without getting into too much of the securities law legalities and stuff, if it's if an the conduit issuer from say California came to issue bonds in the state of Connecticut, two things would happen.

Number one, Danbury would have to approve it anyway, which would say, well, why would I approve it if you know I'm not gonna make any money?

And number two, those bonds would not be Connecticut tax exempt, which are punitive because there's not a lot of Connecticut issues, and one of the beautiful things about having uh Connecticut issue to bonds is the bonds become Connecticut tax exempt.

So just again to reiterate, we did talk to a bunch of other conduit issuers.

I can think of three, and all of them we would have had the same dead end that they would have needed the city council of Danbury to approve them issuing bonds in Danbury.

So that's when we came up with the idea.

Why don't we just talk to Danbury about being a conduit issuer?

I had done some stuff in Bridgeport before where they became a conduit issuer, so we I came up with the idea and said let's do that.

Uh and that's how we ended up getting with you guys to be a conduit issuer.

But we those conduit issuers looked at the deal and they all were willing to proceed, but one of the things they needed to have under U.S.

tax law was the approval of the local municipality for them to issue bonds in your jurisdiction.

If they did that, you would have had a have a city council meeting saying, okay, CTA from Atlanta, Georgia, uh you can issue 130 million dollars of bonds here.

And you'd say, well, why am I doing that?

Right?

So you might as well make money and be the issuer yourself.

That was our thing.

Okay, but with that would so if if somebody heard about that, I would be surprised.

But that's the only discussions we've had with three other conduit issuers, two in California, one in well, one in California, one in New Hampshire, one in uh actually Florida, not Georgia.

Yeah, thank you.

Because this does supersede our city charter.

As far as bond issuances and amounts, and it has to go to municipality for referendum.

So this does exceed our limitations.

But by conduit issuer or city charter.

Yeah, but uh you don't have you're not borrowing the money.

You're do the conduit issuer is a special category, which I could let the attorneys explain to you.

Essentially, it's not on your balance sheet, it's not under your borrowing capacity.

It's be it's a special way of you being able to finance projects in your municipality.

Okay, I think uh to the chair to Glens Cantorell.

I think you've already issued a statement in the past ad hoc along with corporation council that it does exceed our city charter limitations.

This act that the city council adopted allows the city to issue bonds notwithstanding your charter.

So the charter is pushed away by the Connecticut General Statutes.

Now your recommendation would be would be to go to a public referendum, though.

No, you did make that statement in the ad hoc.

No, I did not.

It's in the ad hoc.

Well, look at the minutes, but you said that there's an option.

You could go to the act.

Under the act, the statutes allow you to go to referendum.

I did not recommend that you go to referendum, which is what you just said.

The act allowed you to go to referendum, and the act has been adopted.

Now we are discussing the bond resolution.

The bond resolution is also under the act, notwithstanding your charter.

So we follow the statutes, the Connecticut General Statutes versus your charter.

The Act, although it provides the option to go to referendum for adoption of the Act, which is what we discussed at a previous ad hoc meeting.

The bond resolution section of the Act does not talk about referendum.

It just says council approval.

Would you recommend res uh referendum in this?

With the taxpayers not on it's a business decision, first of all, legally, because the taxpayers are not on the line.

It is not a full faith and credit pledge.

The city is not liable under the act.

I would not understand why the city would want to go to a referendum.

Okay, thank you.

Thank you, Chair.

And uh just a question from the mayor's office.

I think this would be the best one.

Uh 85 Worcester Heights, that's the property that would be inside um in scope for this.

Um how much do they currently pay in property taxes?

Yeah, penis.

200 bucks a year or something like that.

Okay, I just I saw it mentioned in the presentation.

I just want to make sure I heard that right.

Yeah.

And then I also saw that there's uh city revenues, which was uh multiple times brought up.

That sounds nice.

Um to the uh finance director.

Would you agree with those city revenues the way they're outlined?

I'm sorry, I'll just jump down to the last question.

Uh the city revenues that was lined up.

We can make like $860,000.

That's the way it was kind of proposed to us.

Would you agree with that?

Those are uh I haven't seen the final agreement, but those are those are in line with what we've been discussing with.

Yeah, I can speak about the agreement.

The the money you saw was um partially permitting fees.

So yeah, so that's where that comes from.

But we have an agreement for 250,000 and then the 30 a year.

Okay.

Yeah, so that is.

Thank you.

That's about double what is normally paid.

By the way, that is true.

We're here to protect the city.

We've been working with you guys for a while.

I want to point out one thing about conduit issues.

I'm probably out of school here, but conduit issues throughout the country.

I mean, as I said before, I've been dealing with it with 20 years.

They were formed for the purposes of creating capital for projects.

So we're a city, you know, it has to worry about its own its people, it's you know its workforce, et cetera, et cetera.

Someone comes with a project, the kind of is a way for them to access taxes and bonds through the conduit approval.

Conduits have billions of dollars of outstanding debt that are not on the uh books of the city.

Okay, so if you look at a conduit in in California, I mean you do the which is the largest borrower in the country.

I mean, the hundreds of billions of dollars in debt.

So the point is this deed, this conduit is not formed just for Danbury Proton.

You guys can as people come in and you you can get creative.

People are saying, well, I I'd love to be here, I don't have the financing.

Well, let's look at conduit bonds.

Blah blah blah.

But which by the way, we're happy to help.

So uh, you know, I just want to point out that this it's a well-formulated process that's been around a long time.

And I there are other cities in the state of Connecticut that do it.

I don't remember Glenn.

I think we talked about that previously, who the other or Dave told us Chiefha.

Well, Chief is a conduit out of the state, but the there's other cities that have conduits.

Like the Hamden.

Hamden, I think Bridgeport has a conduit.

Deal under the act.

Yeah.

Just to add one more thought to kind of with both questions, but um, we didn't mention this earlier.

Uh Proton did mention it, the FAA approval here.

This is a site that you cannot build up on.

This is an open lot.

So I mean, as I'm I know all of us care about our city and from Danbury, but if something's gonna get done here, it had to be some revolutionary idea, and it's it's something that you know, otherwise this would be an empty lot.

So having something like this is for our economic development purposes for showcasing DMBury.

This is something I want to take investors of Danbury too.

I know Farley's already thinking of who would love to see something like this in our city because this is just I mean, we're blown away with it.

We're very excited to see something like this.

I hope it does get approved because it just puts Danbury in a whole new category of uh, you know, revolutionary, and and that's for Connecticut as well.

I really would say is and something we're trying to pioneer through our career academy and all these other things we do in Danbury to try to showcase us.

This is really something special.

So just be clear, this is not a hospital that's being built in the uh landing zone for the airport.

I saw some petition out on Facebook.

As you saw building into that underground, right?

So it's still in the flight path though.

Under it, yeah.

So FAA.

Oh, absolutely, yeah.

A lot of things are, yeah, yeah.

The landscaping alone has to conform with FAA.

You can't have growth beyond certain amount of fee.

Yeah.

So as we said, like I you can't I can't call a big business and say, hey, build up on here, they can't do it.

But for somebody to be able to go in the ground and do this, I mean it's a technical you know, materials, but also the actual spaces is really revolutionary too.

There's already FAA approval, there's already zoning approval.

Uh not zone.

Well, once it's permanently covers, yeah.

So it just needs to do planning approval.

Yeah, yeah.

Okay.

That's been approved too.

It's been approved.

Oh, never mind.

Sorry, we're all good here.

Yes.

Everything's clarifying that.

Okay, now I'm gonna open up to questions from our ex officio members.

I'm gonna start the table with uh councilman laughing house.

Um my questions are for proton, just in general.

Um I know you're through the chair, I apologize.

Um I know we talked about or you talked about Emory University, kind of being a uh inch and kind of in a backer.

The one thing from Wallingford in that particular project, my understanding that has the backing of Yale New Haven.

Um right now, Northwell uh New Vance is our hospital.

They're pushing folks to Somerset, New Jersey from a proton uh treatment center.

Have you had any conversation in regards to um our local folks getting treatment once our our facilities up and running or proton's up and running?

A lot of the success of these facilities really depend on a referral base or you know, getting up and running from referral base.

We want this to be successful once it gets going.

Um any thoughts, anything you can kind of add from a conversation standpoint.

Well, certainly.

Um first of all, um people are making decisions on the health care treatment much more uh wide open nowadays.

Um father has cancer, the daughters are looking up on online what's the best treatment type.

Uh dad de jure doctor mentioned proton therapy said no, and daughter says, you know, I think you might want to look into that.

So we're seeing uh a lot more self-referral uh from people who call up facilit the proton facilities and say um would I be a candidate given my particular um uh issues?

They they send us the information and we say yes or no you know uh to that that person, but a lot of the patients are coming simply through self-referral.

Um act that we're an agnostic facility, we don't we're not aligned with any particular health care system is a very positive thing.

We've talked to UConn, for example.

Um there, especially now that they have uh Waterbury Hospital, they're very happy to send us their patients.

They don't want to send their patients to Wallingford because they'll be stolen.

So that the patient typically has a lots of other health care around it.

All we do is the small proton therapy piece of it.

All the surgery, the chemotherapy, all that other stuff is really that's where a lot of the money is, frankly, uh for the healthcare system.

Um we're we're not competing in that space at all.

All we're doing is providing the proton piece of tr of of that.

So there's less reluctance for providers to send to somebody because they don't have to worry about uh us taking their patient from them.

We're sending them right back for all the other health care that they need.

And just to note the Wallingford deal was financed with municipal bonds.

Thank you.

New Haven and Hartford Hospital issued municipal bonds, which they couple together to build it.

So that's how they finance it also.

So tax exam.

Tax exemption, sorry.

If I may just in regards to just kind of keeping in mind the referral pipelines, how do you gauge just kind of the overall um you know uh um you know just the the need for the facility like this?

Sure, that's a great question.

We can't tell you how many times we've answered that one, especially for OHS.

Yes, um the the biggest thing is really uh the population density in the area.

Um when we when we were first approached by the owners of of uh farms, um they asked us would we consider putting proton facility in Danbury and said, No, we're really thinking we want to be in the center part of the state towards in field sort of to catch the springfield market, etc.

That's where our demographic studies had been done.

Lee Farm said, okay, we understand, but we we like your firm.

Can you do some development planning for it?

And so uh they have 300 acres here, and so they hired us to do that in the process.

We hired colliers and others, and we did some more demographic studies, and we said, my goodness, uh there's a huge need here, the largest need in the United States that does not have a proton therapy facility for get in field.

Let's go to the Anbury because just so this it was 15 million people uh that were not being serviced.

So uh, and and then you just extrapolate how many people in the in the population get cancer, etc.

And then um essentially it showed that uh in this media area over 2,000 uh patients really needed the care uh of that would be offered by proton therapy.

One treatment room where we can we can do 300, maybe 400 people if that's why we're thinking really there's gonna be a second room.

And frankly, there will be other facilities.

New York will get some more facilities right now, they only have one.

But these you saw the graph.

Um, don't do so any any health care institution at all is gonna um really land.

Um or partner with somebody like us who do not take their patients north well, you know, is uh take their patients and do all the other things that they want to do with them.

Thank you.

Thank you.

Just for the record, uh, Councilman Dennis Perkins arrived at 621 and Councilman Michael Queller arrived at 6 30.

Right now, uh sure.

Um I just want to point out that um uh on the Dambray Proton website, uh there's uh extensive information about uh the uh the need and uh how you define the regional areas.

Um take a look at that.

So if anyone wants to look up the the you know how you calculate the need, it's it's it's on your website.

In our whole process with O OHS is very very public.

Um and I might take the opportunity to point to our uh PR guru here for this team, uh, who's um been spent all his life in Connecticut and really um has been instrumental in pushing us to share everything.

We have been totally trans uh transparent.

As a matter of fact, the the document this show is already on the website.

So uh it's it's that's the way we operate.

As well as the resumes of the Stanley Proton team and the almost board.

Also getting back to referrals, just to help to connect the dots.

We fully anticipate cultivating relationships with tons of health care providers, systems, hospitals, but which comes first, the chicken or the egg, until we get our funding and we actually move forward.

What do we have to talk about?

We're in the twilight zone.

So when that day comes when we get our funding and we have uh our groundbreaking, it's a full court press to cultivate relationships with key people within this 50 mile radius of Danbury.

But it's been premature to really try to have serious conversations until we actually become real.

We're not real yet.

Councilman.

Thank you again to the chair if I may.

And again, I know understand the whole need of the proton center, so I'm gonna take it on a different different perspective from my experience being an accountant, so I'm gonna look at more of the financial aspects of it.

And just understand a little bit.

Yes, so emos is a tactile.

It comes from the word elementsary, which means charity.

So, yes, LMOS Act extended 2024 is when you got 2024 is when you got approved from the IRS.

Very good.

And um, so your facility get everything's gonna be through the chair, if I may.

It's an outpatient facility.

It is.

No rooms, no in-house, everything's gonna be extra.

Correct.

As a matter of fact, it's terribly uninvasive.

We we don't even take blood there.

Um so it's um it's um and it's particularly important for cancer patients who are they're immunomised.

It's it's wonderful for that.

As a matter of fact, it's even moving beyond cancer now.

Mayo Clinic has already done clinical trials for heart ablations using protons therapy, so we're seeing that come as well.

Another place, our actually our chief physicist is is who's in China is treating AMD with uh uh macular degeneration.

It's the only place in the world where they're treating uh AMD, and we plan to bring in that here as well.

Again, it's still to the chair again.

I'm looking at it as since we this is the first time as Taylor has mentioned that we've done this.

So we have to look at it if this was our bond, what questions we would ask if this was Rbon, if we're responsible for so these questions can be similar to that that I'm asking.

A lot of times the public looks to the council for guidance to make sure we're not doing anything any mismanagement.

So we're gonna ask those same questions to you as far as the success of this project is based on management, that it's not mismanaged, which is why I asked you previously who's your board.

And I know you submitted it, but I don't have it.

So I'm gonna ask some certain questions.

We're gonna fix that in about two seconds, actually.

So I want to add one thing if I could.

The in order for us to get onboarded by the investment bank, they go through rigorous process of KYC, you know your customer and everything, background checks, and also the questions you're asking, you know, they also ask at at their committee level in in order for and when they signed up with Oppenheimer, Oppenheimer went through a similar process.

I'm not saying don't do your process, I'm just telling you, and then what happens is when you get to the bondholders, they have a whole bunch of other, and I'm a CPA, I can say this.

They have a whole bunch of other CPAs who you know have bayonets in hand and are asking questions.

So uh so I just want to let you know that process is that process is they've gone through it a number of times already with investment banks, advisors, etc.

Now they're going through it, they'll go through with the investors.

And still through the chair.

So the Secretary of State, I got the certificate of authority from them because you get it online, filed on 1 6, 2026.

The directors are Ken Whitenberg, Whittenberg.

Wittenberg.

He's a director.

I don't see him like that.

Yeah, he's a is he David Waters?

Yes, yeah, he's a pastor.

He's the pastor.

Elizabeth Patterson Peterson.

He's hired lawyer.

He's our lawyer.

And Donald Melson.

Don Melson is our CPA by training.

He's uh he's on here, I guess.

Well, and then Michael Grace is the president.

Correct, he's an attorney.

And he's the president of the of the facility.

Okay.

Uh the other question I have is who is Proton LLC.

Uh I have no idea.

Canberry Proton LLC.

Danbury Proton.

Okay.

Uh you're the managing member.

I'm the management member.

Correct.

What is that?

I'm sorry.

What is that?

What is it?

It's an LLC.

What is his purpose?

It's to manage a proton therapy facility, this particular one.

You're gonna own you're managing the facility itself.

Correct.

But through obviously staff doctors, all that.

So all the employees would be through you through the chair?

For the operations, yes.

You're you're the operating entity itself.

Correct.

That has also the CON that allows me to do that.

But you're not tax exempt.

No, that's correct.

That is a for-profit provider of services.

Okay.

Again, to the again, I'm just trying to get to understanding, that's all.

So the owner of the building is this EMPS.

Correct.

And that's their only function is to own the building.

Um, I'm sure that's their only function.

They own the concession to operate the facility through a license agreement with Proton.

They're not making clinical decisions at that point.

Yes.

But they what they do is they hire third-party developer, third-party manager, third-party construction company to build the project.

So hires Proton LLC to run the operations.

Yeah, exactly.

And also the his what's the developer name?

Cide.

CID administration.

CID is another entity who does the development, and they're hired also by Ilimos to build the building.

And Ilymos will approve draws so that the building can be built because Ilimos is the one who's actually can tell uh uh Wilmington trust to make payments.

So will own the debt.

Ily MOS is the owner and the debtor, yes.

And the debtor.

Yes.

And they're gonna and they again they're gonna through the chair, they're gonna outsource it to Danbury Proton LLC.

Outsource the uh Proton is the manager.

The operations that the man, yeah, they'll do the manager, and then there's other outsourcing too development program, uh, SEC rules, stuff like that that they outsource.

So Proton LLC will run the day-to-day operations.

Is that correct?

That's the correct ethic.

Okay, yeah.

So all the furniture, all the equipment within it will be owned by Proton LLC.

No, no, no, no.

No, that's all owned by uh LMS.

Okay, so you didn't so basically you're just running the operation.

Correct.

And then we're saying that we'll have to use again, just trying to get an understanding with all who the players are.

Sure.

That we're dealing with.

Okay.

Regarding the uh through the chair, by the way.

Do the fees.

Now I know you talked about the 250 at closing and the monitoring fees.

When do the monitoring fees end?

The bonds are paid off.

So that could be 20 years.

30 years.

So every year we get 30,000 until it's paid off.

Actually, it diminishes uh based on the amount of the bond amount.

So it's basically the liability.

So it's based on the outstanding amount on the bond.

Principal standards above the state.

Principal because that goes down, a monitoring fees go down.

Correct.

So what's it what's the rate?

Three basis points.

Three basis points.

Okay.

Also negotiated very aptly by screw.

Thank you.

Just trying to get the understanding.

So it's a little higher than 30,000 if you take three basis points on 115 million instead of 100.

Correct.

So when that first came out, we it was when we were at 100 million.

And in closing, you know, if I had a bet, I wouldn't bet.

I don't know what the numbers are going to be, but I know we're going to be less than 130.

I know we'll be in between 100 and 130, but you tell me where interest rates are going, and I'll tell you what a deal closes.

Because we have reserves and all the other stuff.

So I got no clue what the actual numbers are going to be.

Okay.

Just hope rates go down because that's a good thing.

And the one reason we get through the chair why I asked, I mean, 115 million dollar building is about 2 million dollars of property taxes, we're not getting.

But it's not 115 million dollars for the building.

The equipment is like 25 million bucks.

The proton therapy machine.

But it's all of it.

But it's all exempt.

Personal property taxes.

That's why it's again through the chair, which is why I asked the question who's going to own the equipment.

Because if Danbury Proton LSE owns the equipment, it would be taxable.

Correct.

But since the tax exempt entity owns it, it's exempt all the way through.

So we'll all the we're losing potentially to two million.

Unless we get pilot money from the state to help pay it off, it'd be good.

We're not getting anything for it.

You can't build anything else there.

So which I understand.

Correct.

I get it.

Okay, so the other again through the chair, if I may.

Um so the walling for facility is also owned by your group?

Oh no, we have nothing to do with it.

Nothing to do with that.

So this is the first time you're doing this building.

This is the first time.

El OMAS is doing a project.

I think it's about 23 projects now that uh we've been involved in the development.

This is the first one that uh Elamas is doing.

But the team Proton LLC, which is operating it, has done other facilities as well.

So we've been involved in countless um development projects for proton therapy, correct.

Okay.

I mean, we can do that.

Okay.

Um this is for bond council.

When the when they go out for bonding, what's the title of the bond?

What are they going to call it?

I haven't seen the offer statement.

It'll be uh city of 2026 revenue bond, city of Danbury 2026 revenue bonds, I think.

With the caps that this is a special obligation of the city of Danbury and the full faith and credit of Denver is not issued for the payment of the bonds.

That'll be on the cover of the official statement that was mentioned earlier.

The city of Danbury will be mentioned.

The city of Denver is the issuer of the bonds, yes.

So we're gonna be named our names will be on that issuance document.

Correct.

The document will explain that the revenues of the project will be used to pay the debt service on the bonds and not the city of Danbury.

Okay.

Okay.

I do have other questions, but I'm gonna yield it to Florida so others can speak as well.

I don't want to take all the glory here.

But I do have one concern as well.

That's right.

How about that?

I know I don't want to, I don't want to use up all your time.

Just just one more uh concern that I have as well, and it's the council member Henry's point as well.

Again, with regarding the ad hoc itself from the from the January 6th meeting, because I did have a note on to mention it.

The charge of the ad hoc was not to exceed 100 million dollars.

That was the charge of this ad hoc.

Now the document that was submitted to the city on the January 6th had the resolution that said 100,000 on it.

The resolution that was presented to this ad hoc had 130 million dollars on it, already typed.

So it was already decided to go to from 100 to 130 before this ad hoc even met.

So it would have been different if it was the 100 million and then the ad hoc decided to go to 130 and change the document, but it didn't.

It actually changed between January 6th and today.

Twice.

Twice.

So it makes me because I know there was other times and other ad hocs that we were part of where the charge of the ad hoc could not be changed.

The ad hoc itself couldn't say let's add another things to it.

We couldn't add on because it wasn't the charge of the ad hoc.

And then I know it's something it was concerned.

So if corporation council can just look at to see if we could do it.

I mean, I don't mind 130 million.

I just want to make sure that we have the profit process correct.

That's that's all.

It doesn't matter if it's 100 million, 120, 130, it doesn't matter.

I just want to make sure the process is correct.

That that's all.

Through the chair.

In my opinion, without doing tons and tons of research.

I view this as kind of a procedural amendment as opposed to a substantive amendment, which the ad hoc committee in my experience has the authority to recommend to the council.

And the reason I say that is again, these are conduit issues.

The city taxpayers are not understandable.

Well, let me just finish.

If they were, I think it would be a different opinion.

Now this one is responded now set up.

Okay.

Um the council meeting that it was presented.

If I wasn't here, if I didn't look anything, I would know nothing about the resolution going from 100 to 300 million to 130 million.

I would not even know about it until the March meeting when it comes to 130.

The document that was submitted is not the same document that was presented here.

It changed in between.

That's that's all.

The document itself changed.

The resolution changed.

Thank you very much.

It would have been different if the it went from 100 to 100 today and then went from today back.

It changed before it got here, and that was my concern.

Did you want to ask you?

Please I I understand the question because of your charter and when we go on with other uh ordinances for bonds through the charter.

Um this, however, though saying earlier is very different, it's governed by these statutes, not your charter.

So the statutes say for the bond resolution, notwithstanding your charter, it has to be approved by the council.

And it talks about what it has to be in a resolution.

So when the council gets the resolution, that's what they're gonna vote upon.

So this ad hoc committee presents a 130 million dollar bond resolution to the council, that's what the council will review and adopt.

And if they adopt it, it's adopted under the act, despite what your charter says, and your charter govern governs things like the bond orders of the past.

So we understand what you're saying, but this is different because of the statutes.

I understand that, and through the chair, but in theory, in January, we could have approved the resolution right there.

We didn't have to go to ad hoc really.

We could have said we approve it.

And you're correct.

If the council approved a 100 million dollar resolution, these folks would not be very happy, and they'd probably be pushing for an amendment to that resolution.

And it happens often.

For example, if interest rates go up, we may come back and say 130 isn't enough.

Okay, so it's no, it's not fun and games, it's it's mathematics, right?

So we we run algorithms, we come up with reserves and everything.

We may be higher than 130.

Um and I've had it happen that they have an issue where we had through the other one, it's not it's not the number.

It could it went from a hundred to a hundred and thirty without no one knowing, it just magically increased.

If it was 130 in January, it's funny.

It just went from 100 to 130 before this ad hoc even met.

Isn't that the point of the ad hoc?

The ad hoc would have been from the 100 and go up.

Because it was the resolution because that's approved the resolution, but it had the number not to exceed.

That's that's I just want to just add, I think procedurally that will be on corporation council to make sure that the motion reflects that that this is an amendment to an initial resolution given at the January meeting, and this is the recommendation from the committee.

Does that sound and and to uh councilman Genie's what you've been on the council for a long time?

We've seen amendments, we've seen things come to a council a month later that you didn't see the month prior because of an amendment.

So I think as long as the motion is clear, uh council, um sorry, the attorney council granted, I just call you Dan.

Sorry, and you would you agree with that?

Yes, thank you.

All right, thank you.

All right, I was officially in the room.

Councilman Silvatore.

Yeah, um, you know, obviously cancer care and better cancer care in the area from all four.

I just want to ask a couple questions about the economic side.

And I'm referring to your application from 2022, which I believe you probably started writing it in 2019 because your first fiscal year was fiscal 27 for your numbers.

You have 209, which you state is 60 percent of the total that you thought would start in 2027.

So my question to Proton to the chair is do you um what is the time period between bond approval, getting the money, construction starting, and finishing the project.

To do you still believe that these numbers that you put in your initial application would be the number of patients served at that time.

Very great question.

The um yeah, we all these projects uh there's a ramp up period.

And so we're assuming even though with all the hoopla and everything, um that the first year are really gonna be up at around 60 percent uh capacity.

The next year it goes up to 80, and so it's really the third year before we're at 100% operations.

The the specific number of patients depends on the number of treatments each patient has.

Some patients have 40 treatments, some patients have 23.

So what we're really uh selling, if you will, are treatment slots, and so we have uh essentially uh room for 40 patients a given a day.

Technically 48, but most of the time it gets back down.

So that but that might um we could have uh 40 patients a day for a whole year, and that year we treated uh 400 patients, but the next year, same same number of treatments, but it only ends up being uh 390 patients because they just had a different number of treatments that they had to have.

Does that make sense?

No, it makes sense.

And I'm in health care, so I know the variability of patient care.

I was just curious as to your project, because we're all have to be crystal ball readers in healthcare, right?

So you have to give numbers to OHS.

So I was just curious as to, you know, from the time you get to the bonding, when when do you think the beam's gonna be turned on for the first time to a patient?

And do you believe that the numbers of your first year, which I believe was 209, um, are still an accurate projection for that future?

Yes, yeah.

Um, and our construction period is going to be uh pretty tight.

Um we're hoping it's only 18 months.

We're planning on worse than that from a uh from a uh cash flow point of view.

Um but we want to get this uh up and running as soon as possible.

Um even a month or two can make a difference on people getting the right care.

And I'll be happy to talk to you about your your health care ventures at some point.

I didn't mean to wear this too.

I had coming from work.

I'm done.

Yep.

Council President Bazaid.

Thank you.

Um maybe you can answer this question since you're standing through the chair.

Uh the the question is I I I thought about this and I've read a lot about conduit bonds uh in the last six months, and I've looked into these proton centers, and certainly for the type of treatment you give, that's the cutting-edge world-class treatment.

And it'd be nice to have one in Danbury.

That's that's all well and good.

But but I'm my interest is is protecting the city of Danbury.

And and I I understand that a conduit bond, uh, the city, even though it's titled the issuer, is not liable in any way for any loss experienced or to pay any of these bonds.

I get that.

But at the same time, the city still named the issuer, and I don't want to say this, but have any of your projects gone bankrupt?

No, um, we not one project that I've worked on.

Um, and it's part of the reason is because of that decision we make that we uh want to um work with uh um Nevian machine and my design firm.

I've also involved done other equipment manufacturers, but none of the ones that I'm thinking with the other equipment's even had financial issues.

It's it's typically the uh these large facilities that have had financial issues.

So just to follow up, perhaps I can ask the finance your finance man, Joe, who's high diagonally across from me.

Um are you familiar with uh the occurrence of a bankruptcy or failure of a project that's financed with conduit bonds in terms of any adverse effects to the municipality that issues that is involved in the issuance?

I've been at this game 30 years.

I think in 30 years, maybe two deals that we were involved in had default scenario, and in all the cases the conduit issuer or the city or anybody associated with the deal had no problems, it it fell back to the bondholders to restructure the deal so that they can save their their money.

Uh in such a scenario, is it conceivable that the city would be forced to have its own council to protect it in any proceeding?

No.

Okay.

I mean, it's America.

I mean, there's a lot of attorneys in this room.

If you it's America, you can get sued for anything, right?

So the point is this I mean you're uh you know, if you get sued, you get reimbursed under the bonded measure.

So from the bankrupt entity.

Well, no, there's money in the trust.

You're assuming there's gonna be no money in distrust.

That's correct.

So we as we pointed out before on the Atlanta deal, they're still servicing patients.

So if the city incurs an expense, you're primed.

You get paid before anybody.

Thank you.

So your legal if you got legal fees, you get paid.

Okay.

If I like that, you may get not like my answer.

But the point is our lawyers actually.

But the point is that's the way the indenture works.

So the city is covered for everything.

Are you gonna get sued?

I've never seen a conduit issuer get sued.

I've never seen a city get sued on a bond deal.

But then I don't look, I'm not I'm a small.

Thank you.

Thank you, Mr.

Chairman.

For the pro tam people, um, have you included this possibility of needing a second room in the 130 million?

No, no, that would be a whole separate new financing if we uh wanted to add the second second room.

And so that may or not be done with bonds, it may be done with just bank loans.

Uh at that point would be up and operating, and the only reason we'd even do one is because you're gonna be we got so many customers we can't even service them that the financing might be much easier done through a normal bank.

Okay.

Second question for the chair.

It's uh fair to ask what is the cost of a treatment?

Thinking about the individuals who would benefit from this being in Jamper.

Sure, the uh CMS, the the national system, uh essentially sets the rate for Medicare.

Medicare is used as kind of the barometer for everyone else.

It's uh it's a little bit lower than the actually it's a lot lower than the commercial carrier pay, but the Medicare rate for a uh a given treatment is around a thousand dollars, just so you know.

Um Medicare pays that's what Medicare pays.

Yes.

Because you can't make over Medicare rates.

Yes, so through the chair.

Um I understand that um the structure of this deal is that um the part of the structure is that there's a conduit issuer.

So is a conduit issuer always a municipality?

Because I heard Chief uh, so then what is a conduit issuer?

What are possibilities of other conduit issuers?

You uh the four of us could go form a conduit issuer.

We did we need to be approved by uh government because typically you would be issuing uh under the laws of a certain state, so you'd have to get approved.

There's California, which again we do a lot of business here, they've got four or five conduit issuers, all that are approved by the state, some of which are actually part of the state government.

Um just not to interrupt, but like a redevelopment agency might be.

No, no, they're totally it's a totally different redevelopment agencies were specifically as to real estate conduit issuers can do anything.

Airports, uh proton, uh I've seen tire reclamation centers, uh, senior housing, uh student housing, colleges, everything.

They can do any type of asset that's approved by the IRS.

Now, but one thing important to know here any project you guys ever want to look at that to use somebody wants to do for conduct financing, it's got to be approved, an approved asset for the IRS.

So if if somebody wants to come and build a restaurant chain, it doesn't work.

Okay.

So you know, housing is the majority of bonds are done for housing.

Serving the public senior housing is the biggest right now.

Well, like a massive amount of senior housing money would say.

I want to point out one thing because everybody's focused on the bankruptcy because obviously you're concerned it's proton, it's bankruptcy.

What was the biggest calamity of the pandemic?

Senior housing, right?

People died, you had you had buildings that were uh not up to snuff, etc.

etc.

So the entire financing world for senior housing went down the tubes for a long time.

Okay.

Two uh two, well, a year and a half ago, we had the idea of let's create a different structure, which was which is what our firm does.

That's how we're known in the industry for senior housing so that we can access capital in the market because people are getting older.

I mean, if you look at the SKU, I mean it's it the numbers are amazing how many people need senior housing.

And senior housing both in the low income all the way to and people are living longer.

And people are living longer, and the kids want the house, so they want the fire side.

And I mean, I I can give you studies you would laugh at when you're sorry.

But the point is, I mean, people are paying 30, 40,000 a month to be in senior housing.

So it's crazy all the way down to low income housing.

So we went to we went to one of the largest developers in the country and said, look, I can access we did our work in the bond market.

I can access municipal bonds for senior housing.

Well, what about all the bankruptcies?

I said, No, we can we can do it.

The story is what happened in the pandemic is an outlier, right?

It's a black swan.

It's not gonna happen again.

Or if it does happen again, who the hell knows, right?

So the proton would happen in Atlanta is a black swan.

Who knew that somebody, first of all, the developer, everything he's touched is going to bankrupt.

Okay, I could say that if Steve is being a nice guy.

The developer on this on the Atlanta deals done three deals and went bankrupt.

He built five rooms.

Why do you build five rooms?

Because he got more development fees.

He did a $550 million project where he probably should have done $100 million project.

Why did he do it?

He needed a development fees.

So but everything he touched turned he did a deal in La Hoya that fell apart.

So that that point.

So but my point is my bigger point is don't frown upon Danbury as a proton therapy facility because of one bad project in Atlanta.

Oh, I'm not saying I'm talking to the floor.

I'm just looking at you because I want to, I don't want to be rude.

But when you look at what happened in senior housing, the senior housing market totally ran away from seniors, and now we personally have done it over half a billion in the last year.

And the market has done over four billion of senior housing because guess what?

We need senior housing.

Nobody wants a pandemic, every uh all lessons learned, but it's a different market.

And so Proton is now learned a lesson.

Steve's been involved in 13 deals since this five uh uh this five uh room fiasco down in Atlanta.

None of them have gone bankrupt, all of them are Mevion deals.

So focus on that.

And in any case, if the deal doesn't go bad, the city's protected.

So but I just want to point out that if the city wants to be at the vanguard of health care, having a proton facility, there's only 55 more in the country.

So you guys are top shelf.

Okay.

I have two other questions.

They're I think they're quick.

Um through the chair.

Um, so in the is the land part of the bondholder recourse or only physical assets?

The land it's part of the ownership as well.

Yeah.

So now a lot of people are.

So it is subject to recourse.

Correct.

It's a collateral for the potential collateral.

Okay, thank you.

And then um for um administering the proton therapy.

Is there a special certification needed?

Is this a specialty under an oncological practice?

Is it all kinds of training?

I mean, how does that all kinds of licensing stuff you know we're not so have to get a previous debt that we'll start once we break ground now that we know that we're gonna have a facility to build, all those kinds of licenses also will have to be pulled.

That's good.

No, I understand it, but the process is like who gets to administer this.

Is it a is it a techno, is it a technician, like a phlebotomist taking out blood, or is it like uh uh oncology doctor with a specialty in proton therapy?

I'm just wondering what it's like.

Yes, yes.

Our chief medical officer, Dr.

Yanamoto, uh is in the proton therapy space all his life, essentially.

He uh is more than certified to uh to run a facility like this.

Okay, and then what you're asking is the job function.

Like gradually actually doing the training.

How does it get admin?

How does the therapy get administered?

Like X-ray technician.

Is it an X-ray technician or is it a doctor?

Yeah, when you when you have a patient in um the there's a uh dosymmetric plan that gets developed, and so you have a whole uh specialty type of dosimetrist.

So similar to what's now traditional.

Oh, yes, as a matter of fact, we typically do a uh a plan that shows conventional radiation what the plan looks like and what the proton plan looks like.

Uh one one reason we do that is to show uh the insurance companies look how much better this plan is and how much less healthy tissue is being impacted.

Um that's my last question.

So I think that's what we were told.

Thank you.

Okay.

Um pretty simple concept.

We are lending our taxes up status to a bond issues.

Not learning any money, and we're learning the tax exam status for free.

We don't get paid for it.

We get a little bit, a little milk on our whiskers, but not much.

Um we're not putting any taxpayers on the hook for that.

All the stuff about the 100 million, 50 million, whatever it is, not coming out of anybody's pockets, except the buyers.

They're paying for it, not us.

We're not on the hook.

We're simply providing tax exempt status to the bond issuer so that the bond issuer can be a little bit more competitive in the market because the bond buyer now doesn't have to really jack up his interest rates as much because he doesn't have to pay taxes on the interest.

We all get that.

But it's a very complicated procedure that we have to go through to get there.

And we're seeing this tonight with all these questions.

Um as far as the conversation that the council had with itself, and that's essentially what we are right now.

The council recommended an ad hoc, and this is the council having its conversations.

Somebody injected another conversation outside of the council into this process that brought us from 100 million to 130 million, and that's an unacceptable uh infringement on the on the body of the council.

I have a particular problem with the process, not with the number.

Um, and and we should probably discuss that at some other point in time, not necessarily tonight, um, because the council is a separate uh payment, and it shouldn't have happened.

There's a simple solution if it had to have happened, and that is simply that the presenter, the petitioner, would have said, listen, we said 100 million a couple of months ago.

We really need more than that now.

And the committee would then recommend increasing the amount from 100 million to 130 million.

You wouldn't need an amendment.

The report from this committee to the council, it has to go back to the council would simply read the committee recommends increasing the limit from 100 to 130 million.

End of story.

Fine.

And the constituents, the people we all work for, could then opine on that.

Yeah, they said 100 million, but the committee's not recommending 130.

I mention that because I I represent the area where this project is uh you know, proposed to go.

And I am getting phone calls from constituents who don't quite understand the simplicity of the concept that we're simply lending our tax exempt status, and they're saying, hey, councilman, uh, we started out a hundred million and now we're at 130 million.

What the hell's going on?

So there's a couple of issues about Worcester Heights that need to be recognized.

One is it is a bucolic area.

It's also zoned IL40, which is a very scary uh zone if you happen to live next to it, and a lot of people live next to it.

And we've now been through this because I've been representing Worcester Heights for decades.

We've now been through several major projects on Worcester Heights that have rattled the um constituents up there.

And this is probably one of the least um intrusive ones because it's buried, got a good parking lot on the top.

It's it's yes, it's under the flight path, but it's not really sticking out like the Army reader's any offense, or Tony Rizzo's, you know, Keystone thing.

Um or our ARCA, which changes every couple of weeks or bardens, whatever.

But still, it is it is a it is a large project on Worcester Heights.

Uh, there are people who perhaps like to see the city of Danbury purchase the Lee farm and make it a part of Terry Well and whatever, but that's that's another discussion for different days.

But the idea that it's only paying like a thousand dollars a year in taxes right now, and we don't need you know, it doesn't really make any difference because that's kind of a canard.

The fact of the matter is its own IL 40, and another project could go in there that would be paying taxes.

So if we're gonna do apples to apples, we need to compare a project of your scope with another potential project of a similar scope, and and look at the delta in that.

I bring that up because Elamos, am I pronouncing that correctly?

Elamos is apparently the landlord for this project, and its responsibilities begin at and end at being the landlord, as you have uh discussed this evening.

They're not running the the operations inside the building.

They're not doing that.

You guys are doing that.

Elomas is a 501c3.

In a 501c3, there's a whole bunch of nonprofit designations, but 501c3 is an interesting one because 501c3 has to be a charity.

A 501c3, and I'll just tell you a couple of things that a 51c3 has to do.

One of the things a 501, it has to have a charitable purpose requirement to maintain tax exempt status.

These centers must meet a community benefit standard, which includes providing care to everyone, regardless of their ability to pay.

This is mostly having to do with hospitals, which also have to have room and board, as you mentioned, yours does not.

But it it there's a greater umbrella at work here where surgical centers can also qualify as a 501c3.

In addition to that, they have a charity care obligation.

They're legally required to provide financial assistance to eligible patients, which is a major factor in their charitable classification.

If they don't do that, they run the risk of losing their tax exempt status.

And since all of this happens to hinge upon getting this bond, by losing their tax exempt status, they could lose the qualifications for the bond.

I find it somewhat difficult to understand how a landlord, an entity that is nothing but a landlord, can somehow extend charitable treatment, extend financial aid, extend all of these things that a health care provider has to do when it's nothing but a landlord.

So I don't understand how I get the fact that it's a nonprofit landlord.

I I do not get the other half of this 501c3 designation, which requires a charity.

I don't understand how the landlord can be a charity.

If you were the 501c3 providing the treatment, and you were you were giving free treatment to Danbury residents, you were waiving fees, you were doing this, perfectly understandable.

I simply don't understand how a landlord can do that.

Um these are these are questions I don't expect a response to at the moment because I want to go through the list of them.

My esteemed colleague Ben was doing it back and forth.

I'm I'm not doing that, I'm just gonna sort of do a rotational data dump, and then you guys can, and if you forget, because it's kind of a windy data dump, I'm right here, and you can say what was the other part.

Do you want us to answer tonight?

Are you in this?

We don't know tonight, but I'm just we're not gonna just do a back and forth when I get through this.

One of the issues about the 1013, which it's also known is that the residents of Danbury who were at that meeting who were informed of that meeting did not get a chance to opine on the 130 because of the 100 million.

Um so that's something that we're gonna have to deal with at the next meeting.

I did want to say that had corporation council um determined that this was a substantive change, and we would have to recommit.

We could still make your deadline, assuming, of course, this this is this is predicated upon the city council approving it in the first place, because if the city council is not going to approve it, it doesn't make any difference.

But if the city council was uh prepared to approve this at the new 130 million dollar ceiling, we could recommit next month at the city council meeting, have an ad hoc the very next week, approve it, and have a special meeting that night or two days later.

I think it has to be posted to the corporation council to help me on that a couple of days later.

So basically within the month of March.

Even if we had to let me just finish.

Even if we had to recommit because of the 130, which as far as 130 may go to 140.

Right.

Correct.

Right.

I I come back to you when it's 140.

We got to do the same thing.

Even if we had to, and I'm not arguing that we have to.

What I'm what I'm stating is this committee, I think can satisfy the um uh uh uh procedures of Roberts rules by simply recommending a higher amount.

That's all.

We don't have to have an amendment, we don't have to recommit.

What I'm saying is that even if we had a redo, we could satisfy you guys within the month of March.

We have the ability to do that.

In other words, this is not an open-ended thing, it's gonna go to September.

We we could take care of everything in the month of March.

I don't think we need to do that, but I just want to assure you that if we did, if somebody called us up, a bond council called us up and said you gotta recommit this, and we did, we we could take care of you in March.

So I don't know if you remember the questions or not, but the but the probably the most important one is how do we square this circle with a landlord also qualifying as a charitable organization that allows this whole thing to proceed.

The City of Danbury could have been looking at a couple of million as Councilman Shinezi uh mentioned, a couple of million a year, maybe two, two and a half million a year in property taxes, which basically covers the nut on a primary school.

It's a big deal.

It's a big deal to forego that money.

We would prefer not to.

And I I gotta tell you something, maybe with a different administration down the road, if you if you give them a wedge, they're gonna take a really hard look at you guys, and we can pull that ticket.

So uh you know, ease my mind on this LMOS thing, how that's also going to work.

I would also like to hear from our own uh uh council on this one, because I don't understand how a landlord can satisfy a 501c3 in the century.

Steve, would you?

Thank you, Mr.

Chairman.

That's all I have to do.

Thank you, thank you, Councilman.

So one thing to know on the on the 501c3 application is that the 1023 application that was filed for this for not for the nonprofit for Elimos spelled all of this out.

So everything that you're talking about, the fact that Danbury Proton is going to be the manager and is going to you know be involved with LMOS and PSI D is going to be a developer, that is all in the application that went to the IRS, and the IRS approved it.

Took a year, I think, to get through that process, is that right?

I think it was like a year and a half.

Year and a half.

Um but all of those details, everything you just described, that all got reviewed by the IRS.

And the IRS issued a ruling that granted 501c3 status.

So that's that's the answer to that question.

If I may respond briefly, what what you applied for and what you're actually going to do may be two different things.

Our assessor may look at what you're actually, the product that you're producing and say, you know what, Elamas is not a charitable organization, and we're gonna pull that regardless of what you told the IRS, and then we're in court.

So that's the second part.

So the first part is how can a nonprofit that owns the building and has a for-profit entity operating it and doing the management, how can that qualify for 501c3?

The answer to that is that the IRS reviewed that and the IRS determined that that that was permissible and that that the nonprofit um status applied.

The IRS understands that nonprofits don't always have the capacity to do everything that they want to undertake.

And they need other professionals to do that.

And a lot of times those professionals are going to be for-profit entities.

So the IRS looks at that, they make that determination.

So that's the answer to the first question.

The answer to your second question about the tax exemption, you're right.

The standard for tax exemption is actually different than a 501c3 status.

Tax exemption requires that the property be owned by a nonprofit, that's the first part.

Um, but it also has to be uh it has to be for uh a purpose that relieves a public burden.

And so that's where the medical services come into play.

The the charitable uh, you know, Steve mentioned earlier, you know, the different programs that we have for providing care to folks based on their income levels.

So there's the you are doing that, you're gonna have a sliding scale.

Maybe also and then the third, so that's the second part is that it has to relieve a public burden.

Um that's the medical treatment and the and the sliding scale.

Uh the third part is that it can't be self-sufficient.

If a if a non-profit is or is operating a uh an operation that is financially self-sufficient, it doesn't qualify for property tax exemption to the state statutes.

In this instance, um the the this project is not finsible without tax exemption without the support of a government body.

So the project is not viable uh without having governmental support, right?

So out of the gate, as we begin this, that's the governmental support uh that is necessary for this facility to get built and to be up and running.

Now, on an ongoing basis, we're anticipating donations and other other activities to maintain, you know, for example, when you are providing care to people and charging on a sliding scale, you need support to do that.

And so we are anticipating that there will be ongoing charitable contributions necessary in order to operate the facility.

But under the state statutes, any property that is tax exempt, because it's owned by a nonprofit and it meets that test, has to submit a quadrennial report.

It's done every four years.

And the municipality, the tax assessor has the opportunity to look at the financial information for the facility and to determine whether it still meets the standard uh under the state statute.

Um so there will be an ongoing uh process every four years.

That's that's defined by state statute.

We I mean there's nothing unique about our situation here.

And you know, to your point, if if it isn't if there is a situation at four years from now, this project is generating a tremendous amount of revenue and it's totally self-sufficient.

Um that's that's going to be uh you know something that the city assessor will will look at.

Uh you know, that's that is the state process.

That's what Mr.

Chair.

Yes.

Can the petitioners point out that in your CON uh agreement with the state of Connecticut, you have to put aside five percent charitable care for uninsured patients and under uh uh the underinsured and uh out of pocket expenses.

So isn't that part of your agreement with the state of Connecticut, the charitable care?

It is.

Thank you.

And you've got to take Medicare and Medicaid eventually, right?

Absolutely.

And there's rules around not being able to balance bill and stuff, right?

Thank you.

I just wanted to point that out.

Sorry, Mike.

Okay.

Yeah, that would have been helpful.

Just a quick follow-up.

Yep, yep, briefly.

You you mentioned Joe mentioned uh looking at California and a couple of other spitballing ideas about having those guys be the umbrella for the conduit out of the state, but we'd we'd lose the Connecticut um we'd lose the Connecticut uh uh tax exemption.

Did you happen to look at interior Connecticut towns that could have also done pass throughs to Danbury?

Did that like Bridgeport or Hammond pump come?

I I mentioned that I'm not particularly concerned of whether you did it or not, but could we do that?

First of all, did you know another town?

Yeah, could could we have I don't think well I look I can't, I'm not bond counsel, but I would find it weird if Bridgeport can issue bonds on behalf of Danbury.

Right?

I mean, it just doesn't seem to line up.

The conduit issuers that there's actually grew international issuers.

It used to be only California issuers, some of the issuers now can issue in all 50 states, okay, because it's the need for financing has grown so large, and because of the commercial banking um regulations and limitations, bossal accords, all that stuff that you probably know about.

The availability of capital to do projects is limited.

So conduit issuers are now issuing in every state in the country.

The issue is if you want to get issuer from another state, you can't get the state tax deduction.

So I don't know, you by Connecticut taxes and bonds, go try to find something.

There's not many to go by with your broker, right?

You know, so if this one thing that makes these bonds attractive is that they have a Connecticut, they're exempt for Connecticut say for state purposes.

Thank you.

Thank you, Mr.

Chairman.

That's it.

Okay.

Councilman uh Quilla.

Chair.

Uh I think the first question is going to be uh for corporation council on our end of maybe finance.

What have we spent to date on legal fees and what do you foresee you know getting us to the point of you know, say getting a CO for the project and our end and the legal fees?

I know we're getting a 250,000 dollar payment on the close of the bond.

What would it what is our end of the expenses?

Um legal fees are paid for by 250.

We're getting reimbursed for all legal fees.

We pay for that job.

All right.

Fantastic.

That is a good job.

I'd also like to request through the chair, this probably is gonna go back to uh you know, we proton or bond council, a payment schedule we're getting.

You mentioned $30,000 a year, first year, second year for the life of whatever is.

I would just request that we get you know some kind of payment fee schedule for over the life of the 30 years of bond 40 or whatever.

That that'll be built into the loan agreement once the bonds are issued and the process are loaned to Lamos, that'll be built into that document.

And once it's finalized, we will share that with everyone.

You want to get a monthly, you can get a monthly, you want to get a quarterly, you can get a no, I mean just something for us we should be able to know so we can have it within a draw request.

It's just with Wilmington Trust.

It's good through the chair, it's just good to share that information with the constituents they all understand that we know what's coming in.

And I think one of my last questions would be you'd mentioned you have a local kind of charity program.

Obviously, you talked about five percent will be patients when able to pay.

Are you able or will you be able to commit to give Danbury people the priority of that?

This is our hometowns, our project, we're making commitment.

I think it's important on good faith that no offense, but damn very people should come first.

Yeah, that's it's tricky, and I'll point to Mass General Hospital.

Uh what they've had to do since they've been doing this in almost two decades.

Um, because there's so few coton facilities around, um, they meet every Monday and they look at all the patients uh that have come to them uh and they have to make a decision about who's gonna get the patient slot.

Um typically, if it's done uh properly, it's given to the patients that are most needy as the most difficult, and it's not done geographically.

Okay, I can see that being important through the chair, but if that's the case, I would still like to think you could consider the most needy on Danbury first that possible, as long as it's not prejudicial anyway.

And I'm sure that'll have anything.

Listen, there's nothing wrong with asking that question, so yeah, and you know, all our employees will be Danbury employees.

I mean, there's gonna be a prejudice for Danbury people anyway.

See just one thing that it is always a challenge whenever you try to provide uh you know a geographical um is that you you very quickly get into problematic discrimination uh claims.

And I mean for charitable cases, that's what I was talking about.

But just as a yeah, but is it as a general rule?

We we it it's very problematic to try, and I and I understand the desire to do that.

I I really do trying to say, you know, we want the people in our municipality, and unfortunately, the I mean, you know, although that's although the although the intention is good.

I'm not asking anybody to break the it's the legal, yeah.

And that's why I say well, but that's also that's also why we can't commit uh to that.

Um, like Steve said, all considerations come into play.

Uh so you know, travel distance, things like that are all gonna come into play.

A lot of those factors may well favor folks that are very close to the facility, but we just can't make a commitment to it because then we would have to abide by that commitment, and that gets us into the problematic um legal territory.

One last question through the chair is if you were gonna consider adding a second room, right?

Just based on what I'm hearing tonight, and you know, this gets approval on the next you know, meeting, etc.

Wouldn't it be prudent that you come back to us again for that?

So selfishly thinking for the city of Danbury, we get another fee of not saying it's gonna be 250 or monthly fee because you're gonna get additional bonds for that.

That's how I would look at it.

Well, for first of all, what would probably happen is if this happens within the tier of the bond or us, any bondholders call the shots because we wouldn't need to share collateral, right?

Because we'd build it on the same site and whatever they like.

So we'd have to go to them to get approval in the first place.

So if we're gonna issue taxes and bonds to do it, the logical place to go would be to you guys.

You could actually put it into the deal if you want that you have a right of first refusal on any expansion.

I don't have any problem with that.

I don't think it's a way to dream more.

That's what you want.

I don't have a problem with that.

I don't have a problem with that.

Well, the bonds are out of worry.

I mean, now let me say this if the bonds are paid off each year.

Yes.

So while they're at the same time, do you have a problem with this?

All right, we uh made it around the room once.

Um I'm gonna open it up to the committee.

I believe uh Councilman Henry has a few questions.

One question through the chair, two proton uh back to the development of your proton therapy centers.

How many of you done with private funding, not with conduit funding?

Is that relevant to the bond of uh the resolution in front of us?

I can I can only think of one actually, and it's an interesting question because uh it's actually a model facility for us.

It's in Jacksonville, Florida, it's owned by Dr.

Ackerman, of course.

He was able to uh bring his uh own assets to bear and was able to build proton facility with his own uh private funds, and he's done an incredible job, he treats over 40 patients a day, uh which is our model as well.

Um is doing doing very well.

And I might add he's doing that in the context of the city with the largest number of treatment rooms in the whole United States.

The University of Florida also built initially four rooms.

We at my firm actually designed that.

Uh they've also added another fifth room, and recently the Mayo Clinic has uh uh started construction on a two-room facility there.

So he's he's done very well economically because what happens is the whole community now knows do I want plano radiation or do I want protons?

Because now everybody knows, which is his job.

He's going to tell everybody you want that this the stuff over here that's not really good for you, that's what we call radiation pollution, or do you want proton here?

Thank you.

All right, thank you.

Uh not at this time.

Are we at the position where we have a motion?

I have a question.

Additional questions?

Okay.

Really simple.

Just regarding Gambari Proton LLC.

Are you the only member?

Are there other members?

Canbury Proton LLC?

Are you the only member?

I'm the only member.

So you want to own it?

Correct.

Okay.

Thank you.

Any um opinions from the committee based on anything we discussed?

I do a quick comment.

Okay.

I I think we should point out that there's no radiation involved in the process.

You're not storing isotope, you're not doing anything like that.

You're creating using a helium cycle or something like that.

As needed instantaneously, when you turn the switch off, it's off.

An airplane could land on the building, and we're not going to be using the train wreck in Madison.

It's not going to happen here.

There's no radiation at all.

It's made on the spot.

It's like turning on a light and turning it off.

That's a correct.

Yes, and that's very good point.

The uh for a year one a cylinder of helium this big gives us all the helium programs we need to treat all of your condition.

So that's that's the whole source of uh radiation, if you will.

It's that one helium still on the city.

There's no radiation in the sixth board on top of Worcester.

No radioactive material.

Is that is that a little too strong?

Yeah, uh, we do have to build a building made out of concrete that has shielding in it.

Because what happens was what believe it or not, what happens is when those protons hit the tumor, it actually releases neutrons from the patient.

Really, the patient is the biggest source of radiation, if you will.

Um the concrete is there to absorb all that uh so it gets licensed from the state radiation labs.

We have we will be testing monthly certainly no weeks of that patient uh neutrons uh how it's one of the reasons why we build it into the dirt because uh the dirt acts as a great shield uh itself.

But again, when it's off, there's nothing being embedded.

Correct.

That's all like an X-ray machine.

You don't want to stand in front of it when it's on, but when it's off, it's fine.

That's a great analogy.

Yeah, okay.

All right, final remarks from uh the uh staff present.

Anything to add from the mayor's office, economic development, bond council, anything missing.

I like um Councilman Coalow's idea to add in that.

Um secondly, I just um everything you're telling me.

I don't know this stuff, right?

But we the fact that we have this the career academy now with students wanting to be doctors, like I'd love obviously we'll want to talk to you about it in the future, but to get them to even see video of the work you're doing or learn about these things.

It's such an opportunity for our students.

I just think it's it's gonna be really um a benefit in so many other ways that we can think of.

Mr.

Chair.

Can I just uh closing remarks?

No, no, just a clarification uh for you.

There was the talk of having an opportunity to finance uh future uh expansion.

And I just wanted to clarify that what we were talking about there is uh as long as the bonds were outstanding.

Um so I just wanted to clarify that.

That's all right.

Sounds good.

And are there any closing remarks for proton?

No.

Yeah, uh, sure.

Very brief.

Um we hope to be very shortly be able to uh to Danbury and uh we get a situation where we can cure answer for community members.

Yeah, thank you.

Okay, I'm range you your motion.

Uh I'm gonna invite Attorney Cascrani to read the motion in the hand writing.

The uh the the proposed motion would be this the ad hoc committee recommends to the council the adoption of the bond resolution as presented and recommends that the resolution authorizing the issuance of the bonds be increased to 130 million from the hundred million dollars that was before the council, and accordingly that the council consider for adoption the bond resolution as amended to 13 uh million or such higher amount as the council may authorize further that the council conditions its approval on a right of first refusal to the city on financing for any additional treatment rooms beyond those contemplated by this resolution, provided that those additional treatment rooms are proposed during the term of the bond.

Well the bonds are outstanding while the bonds are outstanding because the term of the bonds is different.

to 130 uh million or such higher amount as the council may authorize further that the council conditions its approval on a right of first refusal to the city on financing for any additional treatment rooms beyond those contemplated by this resolution provided that those additional treatment rooms are proposed during the term of the bond well the bonds are outstanding while the bonds are outstanding because the term of the bonds is different I'm sorry while the bonds are outstanding that's the proposed motion so let's say we move the motion right what you're it moved the motion as proposed you've got to move it I move the motion as proposed I second um any discussion approved no no any discussion no discussion no discussion any comments no I believe this uh motion reflects the conversation we had tonight I uh look forward to passing this point all those in favor but all those in favor single comments say aye aye opposed all right motion passes motion to adjourn motion to adjourn so move so move all in favor aye all right all right really