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Supervisors sign off on Industrial Development Authority issuance for Banner Health; county counsel and IDA explain conduit financing
Summary
The Board approved resolutions enabling the Industrial Development Authority to issue tax-exempt commercial paper for Banner Health; IDA counsel said the issuance is conduit financing and not county taxpayer debt.
Maricopa County supervisors voted unanimously to adopt resolutions approving the issuance of up to $400 million in tax-exempt commercial paper by the Industrial Development Authority (IDA) for the benefit of Banner Health.
Julie Arvo McKenzie, general counsel to the Maricopa County Industrial Development Authority, explained to the board that the IDA is a separate nonprofit political subdivision that acts as a conduit issuer for tax-exempt financing. She told supervisors the IDA statute requires the county to approve bond issuances but clarified the county and IDA do not provide taxpayer financing for the project. "The money does not come from the IDA, it does not come from the county, it comes from the lenders, or the bond holders," McKenzie said. She added that conduit financing allows nonprofit borrowers such as Banner Health to lower borrowing costs by using tax-exempt financing.
Board members asked whether the IDA holds public hearings and whether the public may comment. McKenzie said the IDA posts agendas and held a virtual public meeting the day before the board meeting; she said representatives from Banner Health participated in that meeting and that public comment is part of IDA meetings.
Supervisor Stewart and other board members said they had asked similar questions in prior years when other large conduit financings were brought to the IDA. The board moved and seconded approval of the resolutions; the motions passed unanimously.
