City Manager Nick Hernandez had a positive update for the Public Building Commission during its annual meeting on Sept. 18 at City Hall.
Since the passage of the Health Care Sales Tax by voters earlier this month, there has been movement forward in the quest to refinance South Central Kansas Medical Center’s construction bonds.
“We’ve already met with John Haas, (a) financial adviser … with Ranson Financial,” Hernandez said. “We have a potential timeline, with dates.”
The bonds would have to be refinanced by Sept. 1, 2019, according to the timeline he presented to the commission.
However, it looks as though the actual date will be in June 2019.
“We are already working on some plans,” Hernandez said. “We are going to set up a date with the rating agency to try and discuss what our plan is, and what our approach is going to be. That meeting will probably take place in Dallas, Texas.”
Right now, the exploration of potentially creating bank-held bonds to refinance the debt locally is looking less likely to be the solution.
Because of steps that already have been taken, the possibility of refinancing the bonds into similar, lower-interest bonds is looking positive.
Hernandez said Ranson is looking at the difference between issuing 20-year bonds versus 25-year bonds.
“What’s the range of interest rate they’re expecting?” asked Commissioner Dan Jurkovich.
“Three and a half to 3.25 (percent),” Hernandez said.
Currently, the average interest rate of the remaining bonds is somewhere closer 6.75 percent.
The total savings to taxpayers that could be seen is anywhere from $5 million to $7 million, Hernandez estimated.
The board will meet in the future to discuss the refinancing process further, but no firm date has been set yet.
In other business, the commissioners:
- unanimously approved the Nov. 21, 2017, regular meeting and April 13, 2018, special joint meeting minutes as written.
- unanimously approved the reappointment of Commissioner Mike Munson as board chair and Commissioner Angie Bruce as vice chair.
Commissioners Shandon Weston and David Billings were absent from the meeting. All five city commissioners were present, however.