County told strategy could save hospital $3 million in interest
By Brandy Nance
Originally published 01:41 p.m., March 6, 2008
Updated 01:41 p.m., March 6, 2008
Lyon County commissioners learned Thursday of a plan that could save Newman Regional Health more than $3 million in interest in re-paying bonds during Wednesday’s county commission meeting.
Kevin Cowan, of Gilmore & Bell, in Wichita, presented information to commissioners about public building commissions. The county commission could form such a group in Lyon County. Once established in the county, the building commission could issue public building commission revenue bonds, Cowan said. Those bonds would translate to about $3.5 million in savings in re-payment of three bonds worth a total of $16.6 million. It would lower the bonds’ interest rate from 5.5 percent to 3.95 percent. Without the PBC, the bonds could still be re-financed but it would only save about $2 million.
According to Kansas Statute 12-1757, cities and counties are allowed to establish building commissions. The groups, which are appointed by governing bodies, consist of three to nine members. The statute, however, is not uniform in allowable projects, Cowan told commissioners. Commissioners would be required to form a charter resolution to include health care.
There’s another hitch. Once the group is formed and issues the bonds, it would own the hospital. The building commission would then lease the hospital to the county, which would then sub-let it to Newman Regional Health.
Commissionersdecided to study the issue further. Newman Regional Health Chief Executive Officer Terry Lambert said the hospital decided to bring the proposal to the county commission first since it is a county-owned hospital.
“We felt like this was an informational session for you,” Lambert said. “If you feel that this is a go then we’ll go to our board.”
PBCs have been formed in several other counties in Kansas, including Chase County. The Chase County Jail was funded by a PBC, Cowan said.
In other business, commissioners briefly discussed the Lyon County Planning/Appeals Board’s application to re-define “Urban Access Corridors.” The application has met opposition by residents who are concerned over the new definition, which would break access corridors into 16 defined road sections. Commissioners are expected to send the item back to the planning board for further study.
railroadhorn (anonymous) says...
Isn't Newman a privately-owned hospital? So does this proposal put more money in private people's pockets while taxpayers suddenly become responsible for the hospital? Or would taxpayers still be on the hook for that $2-3 million plus future costs of leasing the hospital to the county then subletting it to doctors? Does Lyon Co. really need to own a hospital right now? And will the county ever get some money to the jail where it's either freezing or burning up all the employees and inmates? Is this million-dollar (read commission dollars to bond sellers) really the most urgent thing right now after Tyson's layoffs?
March 7, 2008 at 5:40 p.m. ( permalink | suggest removal )
emporian (anonymous) says...
Newman's is county owned as previously stated. I do believe that throwing around the term hospital when referring to it is iffy at best.
March 7, 2008 at 6:21 p.m. ( permalink | suggest removal )