The Monticello-Big Lake Community Hospital District Board voted unanimously at its annual meeting Thursday to move ahead with refinancing a Series 2009A bond.

 

The outstanding balance on the bond is $4.475 million. Nancy Friesen of the hospital board said the original bond was issued for major hospital improvements in 1998 and refinanced in 2009.

 

The bond currently carries an interest rate of 4.0% to 5.0% and matures in 2020. It has a call date of Dec. 1, 2016.

 

Gary Anderst,  Regional Health Services CFO, said the goal is to refinance the loan with a direct bank loan bearing interest at 3.0% to 3.75%. The reduction in interest rates would result in approximately $100,000 to $150,000 in savings.

 

Anderst said the refinancing of the bond is part of a bigger financing package by CentraCare.

 

“Just looking at this by itself would not be a prudent thing to do. But we can piggyback this on top of a larger financing structure and reap the benefits of that negotiation,” he said.

 

He said the projected interest rates were just an estimate at this point.

 

“With the elections closed, the volatility in the market has made things a little more unpredicable, so we can only give you a range at this point,” he said. “If we find out this is not going to be a beneficial transaction, we will not move forward.”

 

The refinancing resolution was not originally part of the annual meeting’s agenda. It was added shortly before the meeting.

 

“The reason this came so quickly with very little notice was because of that  other transaction,” he said. “We saw the opportunity to take advantage of that bigger transaction.”

 

If the board didn’t vote on the action last week, it would have had to call a special session. Anderst said they were looking to move the refinancing option forward with the CentraCare Finance Committee and Board of Directors on Dec. 6 and 7.

 

The board also approved the 2018 fiscal year budget in the amount of $1,423,800. Director Mary Ellen Wells said the budget won’t have to be re-certified if the refinancing goes through. Instead, it would just be reported as a variance at the next board meeting.

 

Board members who were elected or re-elected earlier this month took their oaths at the end of the meeting. They were: Sheldon Johnson (Monticello), Brian Doyle (Silver Creek Twp.), Linda Kappel (Member At-Large), Nancy Friesen (Monticello Twp.) and the newest member, Carol Bouchie (Big Lake), who replaces Treasurer Tom Campbell. Friesen was voted in as the new treasurer.