With the recommendation of the board’s Finance Committee, the Sonoma Valley Health Care District board in its monthly meeting last night approved a proposal for refinancing one of the two general obligation bonds issued by the District in 2009 and 2010.
The Finance Committee reported that, given current market conditions, refinancing would save taxpayers approximately $2,000,000 over the remaining 10-year life of the bond in reduced interest and principal payments. The issuance costs of approximately $200,000 will be included in the liability of the bonds. There is no operating expense or cash required by the District or the County in the refinancing.
“This is good news for Sonoma Valley taxpayers,” said Bill Boerum, board member and Finance Committee chair. “Market conditions have opened a window of opportunity for the District, and we will capitalize on it.” He said the refinancing would take up to three months to complete depending on whether the bond is sold as a public offering or through private placement. The refinancing will be managed by Gary Hicks of G.L. Hicks Financial LLC, who has worked with the District on past bond efforts.
In 2009 and 2010 the District incurred $35 million in general obligation bonds to enable the hospital to finance seismic mandates and the expansion of the west wing of the hospital. The 2009 bond was last refinanced in 2014.
The Finance Committee reports to the Sonoma Valley Health Care District Board of Directors and oversees management of finances to ensure that the hospital is financially sustainable. The Board looks to the Finance Committee to ask questions; to ask for analysis; to track projects over time; and to look at the month-to-month financials and help plan the annual budget.