Public Hearing held on hospital revenue bonds

MANISTEE — A public hearing was held on Tuesday during the monthly Manistee County Board of Commissioners meeting to discuss the issuance of hospital revenue bonds which benefit Munson Healthcare.logo_munson

Mary Clulo, director of treasury and tax at Munson Healthcare, attended the meeting to answer questions from commissioners.

The total amount of the bonds are $63 million, with a large portion benefiting the Munson Healthcare Manistee Hospital network.

“The Manistee portion is $20 million for the hospital facilities, which includes the new building which we’re very excited about,” said Clulo. “There’s a number of possible programs that will be moved into that facility, including physical therapy and other hospital service lines.”

Paul Wyzgoski, bond counsel for Manistee County, said the public hearing was an important step in securing the bonds.

“The purpose of this public hearing is so the Grand Traverse County Hospital Finance Authority can comply with requirements of the internal revenue code that are necessary for issuing tax-exempt bonds,” said Wyzgoski. “It will benefit the entities who are obligated to pay it back, which is Munson Healthcare.”

According to Wyzgoski, there is no financial obligation for the county, but the Grand Traverse Hospital Finance Authority must seek approval from local governing bodies.

“After the public hearing, the governing body can adopt a resolution to approve the issuance of the bonds not to exceed $63 million,” he said.

Clulo said they are pursuing tax-exempt bonds with a 30 year fixed rate.

“Munson’s overall cost capital is about 4.3 percent. Rates are rising, so we’ll see where we come in. We’re going to price in early December and sell the bonds in early January,” she explained. “With this approval we can issue tax-exempt bonds on market, and we get a favorable interest rate compared to taxable bonds.”

Wyzgoski said the tax-exempt bonds are mutually beneficial, and allow entities to secure a lower interest rate.

“When (bondholders) earn that interest they get the interest on the bonds every year,” he said. “When they fill out the tax return, there’s an exemption for the interest on the bonds. They don’t pay federal tax on it so they’re willing to take a lower interest rate.”

Also during the meeting, Jennifer Smeltzer gave a presentation on a future Community Based Outreach Clinic (CBOC), a Veterans Affairs outpatient clinic.

Smeltzer is leading the task force to develop a CBOC in Manistee County, which she said would benefit many veterans in the region.

“Early in the spring, a group of individuals from the community got together and said we wanted to do something about veteran’s healthcare here in the Manistee area,” she said. “It would serve Manistee, Mason, Lake and Benzie counties.”

According to Smeltzer, there are around 750 veterans in the region who would benefit from the clinic, and many drive a minimum of 50 miles one way to receive treatment.

“The nearest one to us right now is Cadillac,” she said. “We find that poor health and financial hardship makes it difficult to travel, especially with fluctuating fuel prices. For able-bodied veterans or caregivers, it requires taking time off of work.”

Smeltzer said the VA recommendation for Michigan is to have 10 CBOC clinics, and there are currently nine in place. The project would be funded entirely by the VA.

“Part of the implementation process is to gather signatures. We currently have approximately 1,500, and we expect 4,000 to 6,000 signatures will be needed to get to the next phase,” she explained. “We are looking for resolutions and letters of support from various businesses, hospitals and local bodies of government.”

The commissioners will vote on a resolution at the next meeting.

On Tuesday commissioners also unanimously gave the approval of a resolution for the extension of the amendatory operations contract for Manistee County Transportation, commencing Oct. 1 through Sept. 30, 2019.

The extension is for the operations contract which has been in existence since the organization was formed.

The commissioners reviewed several items discussed in the monthly Ways and Means committee meeting, including a bid to upgrade the Manistee County Courthouse west annex door lock system and main courthouse locks.

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