On Thursday, June 2, the Guilford County Board of Commissioners will hold a public hearing to consider approval of the sale of $700 million in bonds by Moses H. Cone Memorial Hospital and its affiliates. Approval of the bonds won’t commit the taxpayers of Guilford County to repayment – instead, the bonds will be the obligation of the Cone Health system.
Some proceeds from the sale of the bonds will be used to purchase the medical office building at 709 Green Valley Road in Greensboro at a cost of about $10.8 million, as well as the construction – and equipping – of a central sterile processing facility on the campus of Cone Hospital that’s estimated to cost about $10 million.
The money will also be used for the design, construction and equipping of Cone Health’s ambulatory heart and vascular treatment tower on the Cone Hospital campus at a cost of approximately $175 million.
Other capital improvements to Wesley Long Hospital and Cone Hospital will use an estimated $55 million of the money raised by the bond sale. Cone Health also plans to use a majority of the funds to refinance loans for previous projects at various locations.
The Internal Revenue Code of 1986 requires that the Guilford County Board of Commissioners hold a public hearing regarding the issuance of this type of bond – which is actually issued through the “Public Finance Authority,” a government financing agency that operates out of Wisconsin but that handles bond offerings from all over the country.
Unlike General Obligation bonds issued by local governments, these types of bonds aren’t backed by the faith and credit of the local government where the bond projects take place. These bonds, therefore, present no risk to the taxpayer of any state or local government. Instead, they’re paid back out of revenue from the funded projects.
The Public Finance Authority was created by local governments “for the purpose of issuing tax-exempt and taxable conduit bonds for public and private entities nationwide for projects that are important to the community.”
The authority has come under some criticism by Forbes Magazine and others in recent years after there were some high-profile bond defaults that used the authority as the authorizing agency.
The Public Finance Authority is sponsored by the National Association of Counties, the National League of Cities, the Wisconsin Counties Association and the League of Wisconsin Municipalities.
In the past, the Guilford County Board of Commissioners has routinely allowed these types of bonds to move forward – but the public hearing will give everyone the opportunity to express any concerns.
The hearing on the bonds will be held during the board’s June meeting in the Commissioners’ Meeting Room on the second floor of the Old Guilford County Court House in downtown Greensboro. That meeting will begin at 5:30 p.m.
Also, anyone who wishes to submit written comments before the meeting may send those comments to the Guilford County Clerk to the Board’s Office.