While an intent to issue refinanced improvement revenue bonds for Bluestem Communities in Hesston and North Newton had already been approved by the Harvey County, Kan., Commission, that item was brought back at Monday’s commission meeting to finalize the process.
Following a federal mandate, a hearing was held — with no comments being made on the issuance of the IRBs.
Mostly, bond counsel Kevin Cowan said this item is intended to refinance bonds that are already outstanding, though Bluestem Chief Financial Officer Jerol Schrag had noted at the previous meeting that there would be $2 million in new money intended for additional improvements to the Bluestem facilities in Hesston (Schowalter Villa) and North Newton (Kidron Bethel).
These additional funds will "enhance the living experience" for residents in health care and assisted living, according to a project description. Additionally, renovations at Schowalter Villa in Hesston will turn one of the hallways in assisted living into health care certified rooms, helping complete the "A Private Home for Everyone" vision of Bluestem Communities, while the IRBs will help secure a generator for Kidron Bethel in North Newton among other capital improvement plans for both sites.
Bonds have not been sold yet, so Cowan stated that this resolution of sale would outline the parameters of the refinancing on the county's behalf, which would allow documents to be signed by the involved parties as long as the principal amount of the IRB does not exceed $12 million, the interest rate does not exceed six percent and the maximum maturity of the bonds does not extend beyond 2044.
Commission chair Randy Hague also wanted to make sure that county taxpayers would not be held liable for the bonds, which Cowan assured the commission would not be the case — as the payment for the bonds would be directed to the trustee and leasee.
"Your pledge as the issuer are the rentals paid," Cowan said.
Project facilities themselves are used as security for the bonds and Cowan stated that no public money can be used to pay for these bonds.
Right now, the timeline bond counsel and invested parties are working on is getting an initial sales statement finalized this month and closing in September. As maintaining low interest rates were a key concern of commissioners, Schrag noted the goal is to have the bond refinancing finalized before the Federal Reserve hosts its open market meeting at the end of September (which could impact the overall interest).
"I'd like to be in front of that by 10 days," Schrag said.
The commission unanimously voted to approve Resolution 2018-17 advancing the issuance and sale of said bonds.
