Citizens Medical Center鈥檚 board of directors approved on Wednesday a memorandum of understanding with 足交视频 County to move forward with the funding of a planned Intensive Care Unit renovation and expansion.
The board unanimously approved the memorandum, which will allow the county to budget at least $3 million in American Rescue Plan Act funds and sell debt through certificates of obligation to fund the expansion and renovation. The project鈥檚 construction cost is expected to be just under $11.7 million, according to Austin-based .
Under this plan, Citizens would have to pay off the sold debt from the certificates to the county plus interest over time.
After the pandemic, the ICU expansion is needed at the hospital to better serve the community, Citizens CEO Mike Olson said.
鈥淒uring the pandemic, we were using every ICU bed we could possibly have. Got very creative with that to try and meet the needs of the community,鈥 Olson said. 鈥淚t also helped us to realize we have opportunities to prepare better for the future.鈥
The ICU has been in need of an upgrade for a while because the space is limited, he said. Upgrades have been made in the existing space as the necessity arose, but the hospital needs to extend renovations to the whole space.
鈥淚t鈥檚 overdue,鈥 Olson said.
Preliminary plans call for the renovation of 18,870 square feet of existing space and 21,246 square feet of new space for a total of 40,116 square feet.
The expansion will increase the number of ICU beds by 14 and will allow upgrades similar to what has been implemented in the recently expanded emergency room, Olson said.
Over the next few months, the county will be selling the debt to financial institutions for the ICU project as a result of the memorandum, and it will be executed similarly to the financing of the emergency room project, said Bob Henderson, a financial advisor for 足交视频 County.
However, there will be some additional challenges during this period because the hospital will see a higher interest rate due to the current market conditions, and currently the pool of financial institutions that would bid to buy the debt is limited due to state laws that prevent financial institutions from buying the debt if they are boycotting the oil and gas industry or restricting firearm sales, Henderson said.
Because of this, major bidders have been taken out of the market that would traditionally bid on the debt being sold temporarily while those investment banking institutions respond to state inquires, he said.
鈥淭he normal buyers that we have had are not in play right now,鈥 Henderson said. 鈥淚t鈥檚 likely, instead of doing a competitive sales transaction, we will have to do a negotiated sales transaction. Meaning pre-determining who the underwriter is going to be, let them conduct presale activities to try and smooth out that volatility in the marketplace.鈥
He expects the certificates of obligation to have an interest rate of about 3.5% for the project compared to the 2.1876% for the emergency room project. Although with the volatility in the financial market, the 3.5% interest rate is uncertain.
鈥淲e鈥檙e going to get the best rates available,鈥 he said.
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