Refinancing Bond Proposition
Strategic move could save Faith Community Health System $200,000 a year while allowing more nimble operations.
In a strategic move by the Faith Community Health System (FCHS) Board of Directors, a refinancing bond proposition has been proposed to provide the health system more flexibility to continue participating in supplemental state and federal programs and continue to grow.
The proposition will allow the district the option to refinance the existing debt of $22.5 million, down from approximately $30 million over the last five years, with a combination of general obligation and revenue bonds.
Here are important facts that you need to know:
- Refinancing debt is sometimes necessary for better terms that could save the hospital district approximately $200,000 a year in debt service payments. The ability to refinance existing debt is another tool that any growing business should have available as needed.
- This refinancing of the existing debt by the district, and issuing refunding bonds in their place, will allow the district greater flexibility of the terms of the debt and will not increase taxes or add any new money.
- The district will be reducing the current maintenance and operations tax rate by the amount needed to refinance existing debt.
- This will not add additional debt and would only be used to refinance the existing principal balance.
- This is like you refinancing your home mortgage for better terms.
- This process is not new for the hospital district as the same type of bonds were issued in 1991 when the newly formed hospital district absorbed debt from Jack County.
- This is a routine procedure used frequently by school districts, cities, counties, and special districts all over the state.
- This proposition and election does not require the district to refinance. If the bond market is not favorable, the district will not exercise the option.
Together, we can ensure that Jack County continues to see much growth and success when it comes to being able to provide the healthcare programs and services that our local community expects, needs, and deserves.