UNIONVILLE, MO. -- Putnam County residents are being asked to vote 'yes' on Aug. 7 to a $7.63 million dollar General Obligation Bond issue. The bond issue is designed to help payoff the county's Putnam Memorial Hospital debt, that currently stands at $7.23 million dollars.
Residents learned more about the new bond issue during an informational meeting Thursday evening in the Putnam County Middle School Auditorium. Heather Mudd, Vice President of Piper Jaffray & Co., made a presentation on how the general obligation bonds would function. Her company is the municipal bond underwriter that would help issue the new bonds.
She said the general obligation bonds would insure that the hospital can prosper in the future.
"It helps to secure the financial future of the hospital by cutting the debt that the people of Putnam County will have to pay by about $3.7 million dollars," said Mudd. "It relieves the hospital of almost $200,000 that they don't have to come up with to make debt payment that can be used for operating the hospital and providing healthcare services to the community."
The general obligation bonds would be repaid by property and sales taxes that the county is already collecting.
The general obligation bonds would also fund the construction of a specialized geriatric ward, which board members said would generate revenue.
The bond issue needs a 4/7 majority vote or 57 percent of the voter's support in order to pass. If the bond issue is not passed, Mudd said it could jeopardize the future of the hospital.
"If the bond issue does not pass, the current bond holders will demand immediate payment of all of the balances that are currently due that they have deferred awaiting the vote from the people so the hospital will have to come up with a large bond payment," said Mudd. "And if the hospital can not do that, ultimately the bondholders would force the hospital to close so that they could liquidate the assets and take those to get some of their money back."
Here are some other facts regarding the bond issue worthy of note:
1. The general obligation bonds must be paid off by 2031-the same date as the revenue bonds that the county currently has.
2. Right now, the county is paying 6.75 percent in interest on the Hospital Series 2006 revenue bonds; with the general obligation bonds, the new interest rate would be four percent.
3. Right now, the county has to pay $675,000 for revenue bonds-$525,000 comes from money collected by the county and $150,000 comes from revenue generated by the hospital. With the new general obligation bonds. the annual payment is reduced to $550,000 , with $525,000 coming from county property and sales tax revenue, and $25,000 coming from hospital revenue.
4. Hospital board members emphasize this is not an additional tax.
5. If the issue passes, hospital will save $14,000-$25,000 per month on legal fees currently incurring because of negotiations with current bond holders.
Here is a fact sheet of the hospital's current operations, handed out during the meeting.
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