Supervisors to restructure bonds for $17.3 million

By Amanda McBride
The Choctaw Plaindealer

The Choctaw County Board of Supervisors approved to restructure bonds for $17.3 million in their January 31 meeting.

These bonds are to payoff the current revenue bonds of $13.5 million that the supervisors sold in 2011 to fund the construction of the new hospital and medical office building.

Before approving the restructure of the general obligation bonds, the board allowed Peyton Prospere, county bond attorney with Watkins and Eager Law Firm, to explain the differences between each bonds.

Prospere said that the restructuring bonds are general obligation bonds (or GO bonds) that pledges the “full faith and credit of Choctaw County” where as the 2011 bonds were revenue bonds based on the hospital lease with Pioneer Health Systems.

The GO bonds are a negotiated sale and not a bid like the revenue bonds. Prospere added that at the time the revenue bonds were sold, the board and other bonds officials were also creating the hospital lease and working on the bankruptcy filed by Brandywine Health Services. Brandywine previously leased the Choctaw County Hospital and nursing home.

The GO bonds are for $17.3 million which is $3.8 million more than the revenue bonds ($13.5 million). The GO bonds will payoff the revenue bonds, plus interest and cover fees from attorneys and Duncan Williams, the underwriting company.

Prospere said the increase in the bonds is because the revenue bonds cannot be paid off until 2016. The 17.3 million covers the payoff plus interest and fees.

He said the new bonds will create a net savings of $900,000 for the county and reduce the amount the county is required to pay, in bond payments, over the next 12 months. Prospere also added that restructuring the bonds “would put the county on sound financial footing” and Choctaw County could take advantage of historically low interest rates.

Lease payments from Pioneer Health Systems for the hospital, nursing home and medical clinic will pay the majority of the bond payments.

The restructuring or GO bonds will also have a reserve fund. The county must deposit $1.4 million in this fund by February 1, 2016 to pay towards the principal payments. There will also be a discretionary sinking fund which allows the county to deposit funds to pay the debt off early. Once $1.5 million is deposited into this fund, according to Prospere, the county can take that amount and pay off some of the bonds or use it to make the annual bonds payment.

Before voting on the GO bonds resolution, District 5 Supervisor Eric Chambers negotiated approximately $15,000 out of the fees.

District 2 Supervisor Larry McClain made the motion to approve the bonds resolution as presented that day, with a second from District 4 Supervisor David Carter. All five supervisors voted to approve the resolution.

The Board of Supervisors also approved in the January 31 meeting:
-Agenda after adding circuit clerk, inter-fund transfers and Angelica building roof.
-Travel for Peggy Miller, Circuit clerk, to SIMS training.
-Recognized certificate of attendance of training for the election commissioners.
-Inventory deletions.
-Recognized a bus turnaround on Hebron Road.
-To pay three invoices from Crowder Engineering on the Drane Road Project $1,421, Maddox Road Project $2,449 and the Reform Sturgis Road box culvert stabilization Project approximately $3,000 after receiving the funds from the state.
-Solid Waste postage request $190.
-Recognized state mileage new rate of .565
-Travel for Chris Coleman, fire coordinator, on Feb. 20-21 in Pearl.
-Invoice from Pryor & Morrow for architect fees, approximately $900 on the hospital construction and to forward to bond trustee for payment.
-Payroll.
-Transfer $32,915 from Fund 001 General Fund to Fund 126 Ambulance Service.
-Receive a $75,000 lease payment from Pioneer Community Hospital and to issue a demand check to Pioneer for $75,500 for indigent care. Both payments are for the 2012 fiscal year.
-Inventory move requests from Lauren Williams, hospital administrator.
-Tax assessor/collector’s postage request $212.85