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Authority votes to refinance Calexico Hospital bond

March 07, 2001|By AARON CLAVERIE, Staff Writer

CALEXICO — All four members of the Calexico Special Financing Authority voted to refinance the $9.235 million bond issue it took out in 1996 to pay debts accrued by past operations of Calexico Hospital.

The refinancing of the bonds, which was approved at a special meeting of SFA on Tuesday night, will decrease the interest rate from 7.4 percent to approximately 4.3 percent, said Robert Swerdling, a financial consultant with Minneapolis-based Piper Jaffray.

Swerdling explained the refinancing was a "black and white issue of taking advantage of the savings," referring to the debt service saved by a lower interest rate.

He said refinancing could be accomplished in 45 days if the SFA signs off on the new bond issue once they are presented with the final numbers.

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After the bond issue is finalized, the two members of the City Council and the two members of the Heffernan Memorial Hospital District board who make up the SFA will have to decide whether the board will vote to restructure the bond payment plan in order to draw moneys from the bond issuance's early retirement and reserve funds to pay off other Calexico Hospital debts.

The payment of those debts would reportedly free property tax moneys the hospital district could use to provide medical services at Calexico Hospital.

The SFA is a joint powers authority established in 1996 to purchase the more than $9 million in bonds used to pay off a past bankruptcy of the hospital, as well as other hospital debts. The bonds are being paid off by a voter-approved half-cent sales tax.

SFA Chairwoman Rosie Fernandez, also a member of the hospital board, said after the meeting that approving the refinancing was key to providing medical services at the vacant Calexico Hospital. However, she said, there is still a lot of work to be done.

Swerdling said there is no set date on when the bond will be finalized because the bond has to be looked over by attorneys. The exact amount of money saved by lowering the interest rate has yet to be determined.

Hospital board Chairwoman Norma Apodaca was in attendance at Tuesday's meeting.

She said she was heartened by the genial and cooperative tone of the meeting.

"It's a long time since I've seen the light," said Apodaca.

The hospital board will meet at 6 p.m. tonight in Calexico Hospital to discuss the events of Tuesday's meeting.

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