City OKs bond issue for HCH

Holton Community Hospital’s plans to build a new health clinic in Hoyt received a boost from the Holton City Commission on Monday.

During the commission’s first meeting of 2015, commissioners approved a resolution authorizing the City of Holton to issue approximately $3.6 million in health care facilities revenue bonds on behalf of Rural Health Resources of Jackson County. The bond issue is expected to be finalized by ordinance following a public hearing at the next commission meeting, set for Tuesday, Jan. 20.

RHR, which oversees Holton Community Hospital’s operations, plans to use the bonds to refinance existing bonds used in the construction of the hospital, finance the construction of an addition to the hospital and finance the construction of a new clinic in Hoyt.

Todd Van Deventer, bond counsel with Piper Jaffray of Leawood, said the new bonds would likely carry an interest rate between 2.84 percent and 3.09 percent.

Hospital CEO Carrie Saia, who attended the meeting with Van Deventer, announced in August of last year that RHR had purchased land north of Denison State Bank in Hoyt to build a new clinic. The new clinic would replace one operated out of a residence in Hoyt since May of 2004 and has a projected cost of $200,000, it has been reported.

Saia told commissioners that the “new construction” part of the bond issue would be used to pay for remodeling of the hospital’s physical and cardiac rehabilitation departments and an expansion of the hospital’s business office.

Concerning the refinancing of the existing Kansas Development Finance Authority Series 1998 bonds, Saia said RHR is currently paying an interest rate of more than 5 percent on those bonds. About $2,820,000 remains outstanding on those bonds, she said.

The range of interest on the new bonds, Van Deventer said, would be good for 10 years.

“We have commitment on those rates,” he said. “It’s a great market right now.”

Van Deventer also told commissioners that the city would merely be acting as a “conduit” for the bonds and would assume no responsibility for paying principal and interest on the bonds. The hospital cannot issue its own tax-exempt debt without the city’s assistance, he added, because it is a not-for-profit entity.

Commissioners noted that the bond issue process would be similar to one approved in November 2012, when they agreed to act as a “conduit” for the issue of $1,175,000 in taxable health care facility refunding revenue bonds on behalf of Medicalodges Jackson County. That bond issue also was used to refinance existing bonds at a lower interest rate, it was reported.

In other business on Monday, commissioners met with representatives of two engineering services — EBH and Associates of Great Bend and BG Consultants of Emporia — determined as finalists for the job of performing a study on the city’s sanitary sewer collection system. Results of the study are intended to be used in upgrading the system, commissioners noted.

Jim Kohman, representing EBH, said he did not have a firm price on his firm’s services for a study of Holton’s sewer system, but noted that he wanted to “charge the city appropriately” for his work. Kohman also asked the commission whether they wanted EBH to perform GIS (geographic information system) mapping on the sewer system, noting that an additional cost may be involved.

However, BG representatives Bruce Boettcher and Sam Johnson said their firm could provide GIS mapping of the sewer system at no cost to the city and that they would look for ways to incorporate Holton city employees into the process to make it more cost-effective. Boettcher also estimated his firm would charge the city $20,000 a year for the first three years of the study if the firm is chosen.

A decision on which of the two engineering firms will perform the study is expected at the commission’s Jan. 20 meeting.

Commissioners also:

- Approved minutes from a special meeting held on Dec. 31.

- Met with four new city employees including emergency dispatcher Justin Brennan, introduced by Police Chief Gale Gakle; power plant operator Ferdie Beecham, introduced by Electrical Production Superintendent Ira Harrison; street crewman Nathan Doyle, introduced by Street Superintendent Rex Cameron; and utility billing clerk Amber Baxter, introduced by City Clerk Teresa Riley.

- Approved a temporary alcoholic liquor license for Holton/Jackson County Chamber of Commerce’s Second Saturday event this coming Saturday. Chamber Director Carolyn McKee said the temporary license was sought because part of the event falls outside the 4 p.m. to 7 p.m. time frame approved for the monthly event.

- Tabled action on requests from the Chamber and the Jackson County Historical Society for additional funds, possibly from what the city had been using to pay its dues to the now-defunct Holton Main Street organization (see related story).

- Noted that the commission’s next meeting would be held at 7 p.m. Tuesday, Jan. 20 at City Hall due to the next regular meeting date — Monday, Jan. 19 —falling on Martin Luther King Jr. Day.

- Announced winners of the city’s annual Christmas light decoration contest. First place and a $100 utility bill rebate went to Terry Shockey; second place and a $50 rebate went to Dean Tuley; and third place and a $25 rebate went to Angela Childs.

- Approved annual designations for 2015, including Denison State Bank, The Farmers State Bank and Holton National Bank as official city depositories and The Holton Recorder as official newspaper for publications.

- Heard comment from Commissioner Twila White that Jackson County Emergency Management Coordinator Pat Korte has invited city officials and department heads to a March 10 meeting of the Local Emergency Planning Committee.

- Met in executive session for five minutes to discuss matters of non-elected personnel. No action resulted from the session.

- Adjourned the meeting at 8:35 p.m. All commissioners were present, including Mayor Robert Dieckmann, White, Dan Brenner, Erich Campbell and Tim Morris.