Pratt County PBC authorizes $2.75M escrow to defease bonds; commission directs one-year PRMC rent reprieve

Pratt County’s Public Building Commission approved a plan Sept. 23 to place $2.75 million of surplus sales-tax proceeds into an escrow trust to defease specific hospital-related bonds, and the County Commission directed bond counsel to prepare documents that would apply sales-tax surplus as a rent credit for Pratt Regional Medical Center for one year.

Kevin Cowan, bond counsel with Gilmore Bell, told commissioners the county’s sales-tax surplus reserve had grown to the point it was ‘overfunded for tax purposes’ and that federal arbitrage rules made leaving the funds idle inefficient. “When we were working on that earlier this summer, we realized this reserve fund, the sales tax surplus reserve fund, was overfunded for tax purposes,” Cowan said, describing an escrow invested in U.S. government obligations as the permitted mechanism to ensure the funds are not treated as taxable arbitrage income.

A cash-flow analysis presented by Clayton Kelly with Cypressandler showed the escrowed funds would cover interest and principal payments through the chosen maturities and estimated $213,000 in interest savings by escrowing and…