County adopts TEFRA resolution and approves Intermountain Healthcare bond package

The Utah County Commission adopted a Tax Equity and Fiscal Responsibility Act (TEFRA) resolution and approved related bond measures that allow Intermountain Healthcare to access tax-exempt municipal financing for multiple projects.

At a public hearing convened to consider the county acting as conduit issuer, the commission heard an overview from a county financial adviser and legal counsel. The adviser said the county itself would not carry repayment liability for the bonds. "Rest assured, the county is not building its own hospital today," said Dustin Matsumori, director of financial planning for Intermountain Healthcare, who also described the scope of projects and why Intermountain needs the conduit arrangement to access tax-exempt rates. Brad Patterson, legal counsel to the county on the transaction, told commissioners his review found the documents "to be in order" and recommended approval.

Matsumori and staff explained the figures on the agenda and in the notice. The public-hearing notice listed a not-to-exceed amount of $310,000,000 tied to projects in Davis County, Wasatch County and Sandy City. Separately, Intermountain described new incremental financing of $350,000,000 for construction projects and additional refinancing of outstanding issues; taken together in the resolutions before the commission the materials referenced up to approximately $530,000,000 when combining new money and refinancing components. Matsumori said the interlocal process allows jurisdictions to avoid duplicative public hearings while still giving affected communities notice and opportunity to comment.

After public questions and staff clarifications about which sums represented refinancing versus new project financing, a commissioner moved to adopt the TEFRA resolution and to close the hearing; the motion passed on a roll call. Commission members later considered three related agenda items (regular agenda items 8, 9 and 10) that formalize elements of the conduit bond package. Staff explained item 10 modified the rate structure of outstanding 2014 bonds rather than creating a new not-to-exceed amount; staff said the outstanding total tied to that series remains about $80,000,000. Motions to approve each of items 8, 9 and 10 were seconded and passed 3–0 as stated on the agenda.

What the county approved were procedural resolutions that permit Intermountain Healthcare to issue tax-exempt revenue bonds with the county serving as a conduit issuer. Commissioners and counsel emphasized that repayment obligations remain the responsibility of Intermountain and that the county does not incur direct liability, change its bond rating, or alter its financial statements as a result of serving as conduit.

The commission recorded no public opposition during the hearing and adopted the TEFRA resolution and the bond measures as presented. Next steps recorded in the agenda materials include finalizing bond documents and related filings required by the Internal Revenue Service and bond counsel prior to pricing and closing.