June 13, 2012
For Immediate Release
Contact: Gregg Davidson, FACHE, Chief Executive Officer, 360-814-2130
Tom Litaker, Chief Financial Officer, 360-445-8505
Skagit Valley Hospital Taxpayers to Pay Less
Following Refinance of General Obligation Bonds
MOUNT VERNON – Skagit Valley Hospital’s Board of Commissioners is taking advantage of lower interest rates to reduce the amount taxpayers owe on the general obligation bond issue approved by voters in 2004 to expand the hospital.
The taxpayers of the district will achieve savings of $3.7 million over the life of the bonds as a result of refinancing the bonds to a lower interest rate. The new interest rate of 3.38 percent represents a drop of 1.84 percent. Moody’s Investors Service also upgraded the general obligation bond rating to A1, an improvement over the A3 rating given in 2004. The bond sale closed on June 7.
Voters overwhelmingly approved the $62.1 million general obligation bond issue in 2004 to help to build and fund the major portion of the new 220,000 square foot hospital addition. This project received a 67 percent voter approval. A total of $49 million of the $58 million in bonds outstanding were eligible for refinancing. These bonds will all be paid off between now and 2028, the same time frame as the 2004 bonds.
Most districts have both an ongoing Maintenance and Operations (M&O) tax levy and a special building project General Obligation Bond tax. Skagit Valley Hospital is the largest of only three public district hospitals in the state that does not collect an M&O levy from taxpayers. The district has been able to operate successfully without the M&O levy since 1969.
Historic lows in interest rates allowed the hospital’s Board of Commissioners to take this step to reduce the burden on taxpayers.
“We are excited to have this opportunity to give back to a community that has been so generous to the hospital and the patients we serve,” said Bruce Lisser, president of the Board of Commissioners. “The result of this bond sale is a direct savings to the taxpayers.”
The Board and leadership of the organization have used a proactive approach to maintain a strong, stable financial position.
“We are able to save the taxpayers through sound fiscal management,” said Commissioner Clark Todd. “We appreciate the community’s support to build the new hospital to best serve the patients of our region with quality, evidence-based care.”
The impact to the individual property owner’s tax bill is yet to be determined as Skagit County has not yet released the assessed property valuation for 2013. Property owners in Public Hospital District No. 1 currently pay $1.08 per $1,000 of assessed valuation.
“This reflects on the economic viability of the district, the community and the stable operations of the hospital,” said Chief Financial Officer Tom Litaker.
The new, modern hospital opened in 2007 and will celebrate five years of service to the community in June.
“The community saw the need for this new health care facility for the region and generously stepped up to approve the bond issue to build a state-of-the-art hospital to keep quality care, close to home,” Chief Executive Officer Gregg Davidson said. “Through financial stewardship and proactively following the bond market, we are able to bring these savings to the taxpayers.”
Bond Refinancing Facts:
Current Bond Principal: $49 million
Average interest rate: 3.38 percent
Previous interest rate: 5.21 percent
Gross debt service savings: $3,748,298
Total debt service for 25-year life of bond: $77,077,418
Maintenance and operations levy: none
District boundaries: Public Hospital District No. 1, Skagit Valley Hospital covers most of Mount Vernon, area west of the city and the southern portion of Skagit County, including Conway, Lake Cavanaugh and Big Lake.
Skagit Regional Health Facts:
Level III Trauma Center
Level I Stroke Center
More than 1,800 employees
Annual operating revenue, 2011: $229 million
Annual payroll estimate, 2012: $100 million
Recent highlights at Skagit Regional Health:
Since the new hospital opened on June 30, 2007, Skagit Regional Health has continued to grow and advance medicine in the region. Highlights include:
- Comprehensive Regional Cancer Care Center opened in December 2006 and added a third linear accelerator for radiation therapy and opened The Breast Institute in 2009.
- Recruitment of more than 100 physicians in the past four years, including specialists in neurosurgery, electrophysiology, interventional cardiology and plastic and reconstructive surgery.
- Wound Healing Center opened in 2004 and added a hyperbaric oxygen therapy program in 2010.
- The Center for Sleep Disorders opened in 2008 under the direction of certified sleep specialists Murali Maheswaran, DO.
- Skagit Valley Hospital started an adult hospitalist program in 2005 and added a pediatric hospitalist program, in partnership with Seattle Children’s, in 2011.
- Skagit Valley Hospital integrated with Skagit Valley Medical Center in 2010, forming Skagit Regional Health. The system now includes 10 clinic locations in Skagit, Snohomish and Island counties.
- Skagit Valley Hospital became a teaching hospital, welcoming the first class of 12 medical students from Pacific Northwest University in July 2010. In 2012, the hospital will add eight residents, along with third- and fourth-year medical students.
- In conjunction with Cascade Valley Hospital, Cascade Skagit Health Alliance opened in March 2012, providing primary and specialty care in Smokey Point.
- The new Mental Health Center, offering enhanced security and privacy, opened in May 2012.