(Posted May 17, 2017)
By Kristy Zurbrick, Madison Editor
Through an agreement with county government, Madison Health will save a significant amount of money on refinancing its existing debt and financing its expansion project.
On May 15, the Madison County commissioners agreed to be a conduit for the hospital to secure tax exempt bond financing for up to $45 million. Madison Health CFO Michael Browning predicts the hospital will actually need $39 million. Tax exempt financing allows the hospital to secure a lower interest rate, reducing costs by one-third over taxable interest rates.
The hospital is using Compass Bank to handle the refinancing of debt and financing of the expansion, which includes construction of a new emergency department, cancer center, and offices for medical specialists. No county funds are involved in repayment.
For two years, the bonds will follow a monthly variable interest rate after which a fixed interest rate swap is planned with a 30-year term. The current going fixed rate for this scenario if 3.8 percent. Compass Bank plans to buy and hold the bonds for the first seven years and likely will buy the interest swap, as well, Browning said.
County Commissioner David Dhume said support of the hospital is good for the community. As the hospital grows, so does the community, he said. Commissioner Mark Forrest said cheaper money allows the hospital to do more with its funds.
In other action, the commissioners, who also serve as the county park board, approved funding for two projects at the Little Darby Nature Preserve, located east of Plumwood in Monroe Township.
Capabilities Inc., an organization that helps youths build life and job skills, is committing four or five teens to perform volunteer work in the London area June 5-29. During good weather, the teens will apply herbicides to invasive honeysuckle at the 214-acre property. During bad weather, they will perform indoor tasks for the city of London.
Julia Cumming, who works for the Madison County Soil and Water Conservation District and serves as a consultant to the park board, asked for $300 to outfit the crew with a pump sprayer, chemicals, gloves, and disposable coveralls. A representative of the state Forest Service will be on hand to train and help the teens.
The commissioners also approved setting aside $175 for shelters and stakes to protect newly planted burr oak trees from deer damage. The row of trees sits between the preserve’s prairie area and a farm field. Jerry Miller, a volunteer with the Friends of Madison County Parks and Trails, initiated the project.
In general discussion, Forrest raised the possibility of creating an annual budget for the park board to cover such expenses in the future. He said it wouldn’t be big, but it would be a start.