Taxpayers in the Tulare Local Healthcare District will save $54 million after a recent bond sale and refinancing, the district announced Thursday.
The district emerged from bankruptcy in 2019, and in January it received a new bond rating that reflected its improvement.
“We have worked hard to exit bankruptcy and provide a viable future for the district,” said Kevin Northcraft, President of the district’s Board of Directors, in a statement. “A critical component of our efforts has been a refinancing of the General Obligation Bonds at a significantly lower interest rate.
“Working closely with management, attorneys and our municipal advisors, we have been able to not only sell all of the bonds, but we have been able to do so at a much lower interest rate and thus save the taxpayers’ money.”
Landowners in the district’s area pay taxes that funnel into the General Obligation Bonds. With the district refinancing outstanding bonds at a lower interest rate of 2.45 percent, taxpayers will save $54 million.
Moody’s investment rating service reviewed the district in January and upgraded its credit rating to investment grade, which was due to the district’s improved financial state coming out of bankruptcy.
Tulare’s hospital district, which operates the once-branded Tulare Regional Medical Center, was embroiled in controversy over its closeness with its hospital management firm – Health Care Conglomerate Associates.
After a shakeup election in 2016 and a recall campaign in 2017, the board of directors initiated bankruptcy proceedings. After emerging from bankruptcy, the district enlisted Adventist Health to manage the hospital and aid in updating facilities.
“The district board has been very prudent with the taxpayers’ funds. We have worked hard to improve the district’s finances and credit rating, while continuing to meet all financial obligations,” said Sandra Ormonde, CEO of the Tulare Local Healthcare District, in a statement.
“The board is pleased that these efforts have led to a tax savings for the area landowners, and ultimately improved financial status for the public agency.”