April 16, 2013 10:03:39 AM
Carl Smith - [email protected]
Supervisors are hopeful that refinancing 2002 OCH Regional Medical Center's revenue bond could save the county more than $1 million over the next decade.
The board unanimously approved a resolution Monday supporting refinancing the bond after a presentation by Buddy Mitcham, a representative of the Jackson-based firm Government Consultants.
Mitcham proposed taking advantage of low interest rates by refinancing $8.6 million of the almost $12 million outstanding from the bond this year and refinancing the remainder next year. The first phase of the bond refinancing, he said, could save the county approximately $1.4 million over 14 years if interest rates remain the same.
Interest rates could drop in the coming months, allowing the county to lock in a better rate next year, Mitcham said.
"That's real money," he told board members Monday. "After we get the other done after the first of the year, we'll have to run the numbers and see what they look like then, but you're talking about real good savings."
Mitcham estimated the first phase of refinancing could be ready for board approval in October.
The 2002 revenue bond helped pay for construction and renovation projects, OCH CEO Richard Hilton said, including work on the hospital's South Tower and emergency room. The OCH Board of Trustees supports potential refinancing, a letter to supervisors states.
"The market conditions are really good right now compared to the condition when the bonds were originally sold. It makes good fiduciary sense for (OCH) trustees and supervisors to partner together on this matter," he said. "With expenses coming off the books, this translates to tremendous community benefit. I think the supervisors see the promise and rationale with this, and my hat is off to them for taking it up for consideration."
Board Vice President John Montgomery said the move is no different than a homeowner refinancing payments on their house.
"Anytime you can save upward of a million dollars, it's a good move," he said.
The extra cash could allow the county to complete needed projects or plug holes in its budget, board president Orlando Trainer said.
"You could do a substantial road project - an overlay, for example - that would last through the 10-year period and maybe have useful life afterward," he said.
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch