(April 8, Truckee, CA) Tahoe Forest Hospital District (TFHD) successfully refinanced its Measure C, Election of 2007, Series B (2010) general obligation bonds yesterday, April 7, 2016 resulting in a net savings benefiting District taxpayers of $10.6 million, or approximately $424,000 annually over the next 25 years.
This savings will be directly passed on to District taxpayers through lower annual property tax assessments. The refinancing of these bonds does not extend the length of the original bond term, which will be paid off as originally scheduled.
The District completed the Series A General Obligation Bond refinance in March of 2015 that resulted in net savings of $5.1 million. These two refinancings have generated a net savings benefiting District taxpayers of $15.8 million, or approximately $600,000 annually over the next 23-25 years.
GO bonds are paid through a property tax assessment levied on all property within the District subject to taxation based on assessed property values. The general obligation bonds were needed to comply with California Senate Bill 1953, mandating California hospitals become seismically compliant after earthquakes in southern California.
The bond measure also included expanded, improved and modernized healthcare services including an improved emergency department, expanded and upgraded cancer care, modernized maternity and women’s health care, and a modernized long-term skilled care facility. The bond measure was passed by a 72% supermajority vote in 2007.
The savings in debt service payments from the April 7, 2016 refinancing equates to an approximate $2.30 (or 16.9%) reduction in the rate per $100,000 of assessed value for property owners. When combined with the March 2015 refinancing of Series A, the District lowered the overall rate per $100,000 by approximately $3.60 (or 12%).
TFHD’s general obligation bonds have an Aa3 Moody’s Investor Service rating. Moody’s bond ratings are opinions of the investment quality of the debt obligations they rate. The Aa3 rating by Moody’s is one of the highest credit ratings possible for California healthcare providers, and reflects the high quality of the TFHD general obligation bonds.