Grossmont Healthcare District bond sale results in $28 million savings to taxpayers
May 6, 2015 General
— Final bond sale to complete facilities improvements at Sharp Grossmont Hospital
The Grossmont Healthcare District (GHD), a taxpayer-supported public agency that serves as landlord of Sharp Grossmont Hospital in La Mesa, said it recently finalized the sale for two separate series of general obligation (G.O.) bonds totaling $24.5 million and $175 million.
The bond proceeds will finance ongoing capital improvement construction projects consisting of new and improved patient care facilities currently underway at the publicly owned hospital.
The $24.5 million bond sale was the third and final series of G.O. bonds that are part of Proposition G, a GHD-sponsored $247 million bond measure that East Region voters approved in June 2006. The two previous GHD bond sales totaled $85.6 million in 2007 and $136.8 million in 2011.
The $175 million sale of bonds was a partial refunding of the bonds previously sold in 2007 and 2011. The refunding, a transaction similar to a refinancing, will save taxpayers about $1.13 million in interest payments annually, or a total of about $28.6 million over the life of the bonds through 2040, GHD officials said.
GHD officials said both series of bonds were priced for selling on April 28, and offers were accepted the same day from institutional and retail investors in the U.S. municipal bond market. Closing date for the transactions is scheduled for May 20.
Moody’s Investor Services rated GHD’s bonds at “Aa2,” which ranks near the top of Moody’s 10-tier scale, with “AAA,” as the highest rating possible. The U.S. government, for instance, has a Triple-A rating. Moody’s is a recognized and widely utilized independent source for credit ratings on debt involving sovereign nations, corporations and municipalities.
“The strong rating was a real plus for local taxpayers because it affirmed the creditworthiness of the bonds, as well as the utmost confidence by investors in the District’s financial stability,” said Robert Ayres, 2015 GHD board president. “In addition, the refunding will mean additional savings and a direct benefit to taxpayers.”
This latest bond sale will help complete the 71,000-square-foot Heart and Vascular (H&V) Center building, currently under construction, as well as the 18,000-square-foot Central Energy Plant, with its 4.4-megawatt combustion turbine generator weighing 52 tons, and remodeling work on floors 2 through 5 of the East Tower.
The H&V Center is planned to expand the hospital’s surgery capabilities with four new cardiac catheterization labs and four multipurpose procedural rooms for supporting a wide range of specialties, including general surgery, minimally invasive surgery and image-guided surgery, as well as endovascular interventional procedures.
The East Tower’s remodeling includes upgrades to patient rooms, including Americans with Disability Act (ADA) compliance and bariatric accessibility, improvements to elevators and nurse stations, and modernization of mechanical, electrical and plumbing systems.
The Grossmont Healthcare District, a public agency that supports various health-related community programs and services in San Diego’s East County region, was formed in 1952 to build and operate Grossmont Hospital. The District is governed by a five-member board of directors, each elected to four-year terms, who represent nearly 500,000 people residing within the District’s 750 square miles in San Diego’s East County. For more information about GHD, visitwww.grossmonthealthcare.org.