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Commission impresses banking official
Country Club Bank earns contract
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By Jim Misunas
LARNED — A banking official from Country Club Bank Oppenheimer & Company said the Pawnee County commissioners and Public Building Commission did their homework on the proposed Pawnee Valley Community Hospital project.
Country Club Bank Oppenheimer & Company of Kansas City, Mo., was hired as the bonding company for the project. The company will underwrite and sell bonds for the financing of PVCH.
John Harris, vice president for capital marketing for Country Club Bank Oppenheimer & Company, was impressed with the professionalism of the commissioners, Kathy Bowman, John Haas and Donna Pelton.  Tom Giessel, Tim George and Dick King serve as members of the Pawnee Public Building Commission, which issues the bonds on PVCH.
“The Pawnee Commission is one of the more apt groups I’ve worked with,” Harris said. “They were well versed in the project. They were very diligent in their research and asked good questions.”
Harris said the hospital project fits perfectly in a solid portfolio because it’s a secure, safe investment because it’s backed by a reliable revenue flow and handled through a Public Building Commission.
“We look for a community that is supportive of a project and we feel will do a good job,” Harris said. “We are familiar with these types of PBC bonds in Kansas. It’s a good sell. We do business in Kansas and have a strong relationship with commercial banks in the state.”
Harris said the recent volatility of the stock market does not affect the Pawnee Valley Community Hospital project. 
“In the final analysis, the way the stock market has gone is probably helpful. Investors are seeking a flight to a quality project and a good solid investment.”
Country Club Bank would be paid between $126,000 to $133,000, depending on whether it’s an $18M or $19M project.  A rating agency fee through Moody’s or Standard & Poors would be $10,000. Bond counsel fees would be $35,000. Other expenses would be $7,200.
The net interest rate will range from 4.2 to 4.5 percent depending on whether the bonds are AA rated or A rated. The true interest rate would range from 4.1 to 4.4 percent.  
The rating is comprised of county and hospital financial statements, financing details and the preliminary official statement which describes the project, Pawnee County and the source of repayment. An “A” bond rating allows for bank-qualified, tax-exempt bonds.
Based on current legislation for bank-qualified loans, a single bond is limited to $10 million; so two bonds would have to be issued, one in 2011 and one for 2012 for Pawnee Valley’s project.
Harris said the next step is securing the title and finalizing the bond documents. 
Pawnee Valley owns a critical care access license, which is certified to receive cost-based reimbursement from Medicare. The reimbursement is intended to improve the financial performance through cost reimbursement plus 1 percent.