Converse County hospital leaders ask Natrona commissioners to consider issuing revenue bonds to buy Summit/ Memorial building

Representatives of Summit Medical Center and Memorial Hospital of Converse County asked the Natrona County Commission to consider issuing hospital revenue bonds that would allow the hospitals to buy the Summit building for $29.2 million. Bob Kaiser, chairman of the Memorial Hospital of Converse County board, and Matt Vanmier, CEO of Summit and Memorial Hospital, presented the proposal and said the hospitals prefer tax-exempt revenue bonds to bank financing because bond rates are lower and allow investment in facility improvements.

Kaiser told the commission the underwriters and legal advisers view the offering as a nonrecourse revenue bond: bondholders would be secured only by pledged hospital net revenues, not by county property tax or general-fund revenue. Kaiser said the hospitals expect bond investors to be principally insurance companies, tax-exempt municipal funds and professional money managers. He said the board has engaged counsel and that a detailed disclosure statement and legal opinion are available for review.

Vanmier said the project is about access and quality of care, and that local, community ownership allows different service priorities than purely corporate systems. He said the hospitals are profitable and that refinancing would free funds for service expansion; he added that if bond markets do not produce acceptable terms the hospitals would seek bank financing at higher rates and with a substantial down payment.

Commissioners focused on legal risk and local benefit. Commissioner Clark said the county must protect taxpayers and requested written assurance from bond counsel that there is no county obligation if the bonds are issued; several commissioners asked for a written bond-counsel opinion and for underwriting schedules and the hospital financials. Kaiser and Vanmier said their bond counsel (identified in the meeting as Rick Thompson) and an underwriter (materials referenced from Stipple and Merrill Lynch in prior offerings) prepared disclosure materials and were available to meet with county advisors and the commission.

Commissioners also asked how Natrona County residents would benefit. Kaiser said Converse County hospitals refer patients to Wyoming Medical Center and others, and that Converse has invested in regional medical capacity; he argued that expanded local services would add regional capacity and could benefit patients in neighboring counties. Commissioner Coates and others said they wanted to review financials, the bond counsel opinion and a clear statement of legal liability before deciding whether to adopt a nonbinding inducement resolution.

No vote was taken. Commissioners asked hospital representatives to provide: the signed bond-counsel opinion, the underwriting timeline, detailed financial schedules and a formal inducement resolution for review. The commissioners said they would have their county attorney and a bond counsel review any request before any formal county action.

Background: Kaiser said the board has used revenue bonds in Converse County in prior projects and that the lease payments the hospitals currently pay are larger over time than the projected bond debt service; the presenters estimated bond-market yields cited in the presentation at about 5.76% and said bank financing could be substantially more expensive and require a 20% down payment.