At its June 4 meeting, the Palm Drive Health Care District Board directed staff to pursue refinancing for two bonds that could save the district $1.48 million.
The three directors in attendance — Gail Thomas, Dennis Colthurst and Eira Klich-Heartt —unanimously agreed to have staff investigate the refinancing. Director Richard Powers was absent because he was out of state.
The refinance option was one of two bids received by the district after it solicited requests. The district will seek a binding commitment for the bid terms from the bank, which has not been named for now, according to the district’s attorney Bill Arnone.
The bid from what was named Bank A refinances the bonds at a rate of 4.83% for the general obligation bonds and 5.12% for the parcel tax. Bank A also did not require a reserve fund, which Arnone said would bring the parcel tax bonds to final maturity in 2034 as opposed to 2035.
This is contingent on the district getting out of its bankruptcy proceedings, which might be completed by July 25.
What’s happening with the district’s bankruptcy case?
The district was in bankruptcy court on May 29, where two objections to the district’s reconfiguration plan were deemed invalid. However, a late claim against Palm Drive still has to be explored by the court.
The claimant, according to Arnone, holds that the district owes it money as a result of the bankruptcy of the previous management company, Sonoma West Medical Center. It claims that AAMG received money owed to it and therefore Palm Drive is also accountable for that money.
In order to keep the timetable for bankruptcy, the bonds and the eventual change of ownership, the board is holding a special meeting on June 13 at 6 p.m. at Sonoma Specialty Hospital. One hour before the public meeting, the board will hold executive session with Arnone to discuss possible settlement terms with the last bankruptcy claimant.
The district is also actively seeking a replacement for Jim Horn, who wrote a letter of resignation effective immediately on May 6.
The district has put ads in local media, including Sonoma West Publishers and has a link on its website, but no one as of June 4 had responded. The board will look to fill the position by appointment at its June 13 meeting.
The board wants to have the seat filled quickly because it was advised by Arnone that the county would likely step in and compel an election should no one step forward. There was a concern about the money an election would cost the district.
Colthurst said that he may know someone who could fill the seat.
In other matters, the board approved several backlogged minutes from December through May.