DALLAS - The Dallas County Hospital District is seeking a November vote on $747 million of general obligation and revenue bonds that would partially finance a $1.27 billion effort to replace Parkland Hospital, Dallas County's charity hospital.
The district's board of managers voted unanimously on Tuesday to ask county commissioners to set the bond election for Nov. 4. The commissioners, who have supported the hospital replacement project, must act by Aug. 31.
Proceeds from the $705 million of GOs would provide 58% of the funds necessary to build a new 862-bed hospital to replace the current facility built in 1954. Proceeds from the taxable revenue bonds would finance a parking garage.
The new complex will be built across the street from the existing 676-bed facility.
If voters approve, the Hospital District would issue the bonds. Moody's Investors Service dropped its A1 underlying rating on the district's debt in April 2006 when the final bonds matured.
The district's last bond issue was $80 million of GOs approved by voters in 1980 to expand the hospital's burn center, add intensive care facilities, and build an in-patient treatment wing.
The district's blue-ribbon facilities committee endorsed a replacement complex in March that had an estimated price tag of $1.37 billion, but the total cost has been reduced by $100 million, said district chief financial officer John Dragovits.
"There was a lot of interest by the board in having this project have a minimal impact on the tax rate, so we went ahead and looked closely at the plans," he said. "Changes were made that lowered the cost but did not jeopardize patient care."
Dragovits said the bonds would require an increase of 2.5 cents in the district's property tax rate of 24.5 cents per $100 in assessed value. The owner of a $150,000 home with a standard 10% homestead exemption would see the tax bill go up by about $30 a year.
The original proposal included a new main hospital facility and a new specialized hospital for women and infants, but the revised plan calls for a single hospital with a newborn intensive care unit.
Other changes include putting administrative spaces into an office building rather than in the hospital, and eliminating several parking garages with additional surface parking lots.
The project will be completed in a single phase, Dragovits said, rather than over two or more, as originally contemplated. If voters approve, work could begin in 2009 with completion of the main facility in April 2014.
The financing plan adopted by the hospital board has a sales schedule with a GO tranche of more than $530 million in 2009 and a second one of more than $160 million in 2010 or 2011, but Dragovits that is not a firm timetable.
"We may have multiple sales, more than two," he said. "That will be determined by the cash needs of the project."
In addition to the bond proceeds, the financing plan includes $250 million from the district's cash reserves, $100 million in additional allocations, and $150 million from private contributions.
The proposed replacement hospital will include 862 adult beds, 117 infant beds, and a 96-bed neo-natal intensive care unit. The complex will also include a clinic and an office building.
Parkland is the primary teaching institution for the University of Texas Southwestern Medical Center, which is located adjacent to the hospital north of downtown Dallas. The hospital admits some 42,000 patients a year. About 16,000 babies are born each year at Parkland.
Dallas County residents cover 40% of Parkland's $1 billion annual budget through the district's property tax. The remainder comes from Medicaid payments, private insurance coverage, and federal and state government subsidies.