Douglas County approves reissuance of hospital revenue bonds as hospital transitions to nonprofit operator

Douglas County commissioners voted to approve the reissuance of existing tax-exempt gross revenue health care facility bonds after a public hearing on the measure.

Nate Meyer, introduced as chief financial officer at Valamir Health, told the board the county will enter into a lease and operating agreement on Jan. 1, 2026, with a Minnesota nonprofit identified in the hearing as Alamere Health, which will lease, operate and manage the hospital facilities previously financed with the bonds. Meyer said the change in control and use of the financed facilities requires the county to hold a public hearing and approve a reissuance under federal tax law so the bonds will continue to qualify for tax-exempt interest.

“It’s important to note that no new debt is being issued,” Meyer said, explaining the action preserves the existing bonds’ tax-exempt status rather than increasing the county’s debt load. He cited the relevant federal tax-code requirement for a public hearing, noting counsel would certify the bonds remain valid and tax-exempt if the resolution is approved.

After hearing no public comment, Commissioner Charlie moved to approve the resolution to reissue the bonds; Shane seconded and the board approved the motion by roll call.

The resolution preserves the tax-exempt status of previously issued series of gross revenue health care facility bonds that financed hospital improvements between 2012 and 2018, the county’s presenter said. Staff said the action does not increase the principal or create new borrowing; rather, it aligns the bonds’ legal documentation with the pending lease and management change.

The board’s next step is to file the certified resolution with bond counsel as required so counsel can confirm continuity of federal tax treatment. No additional public hearings were scheduled on this item.