El Paso County Planning $120M for New Children’s Hospital

DALLAS — El Paso County, Tex., expects to issue $120 million of general obligation bonds for a new children’s hospital next March, county commissioners said. In a meeting Monday, Thomason Hospital chief executive Jim Valenti outlined the cost of construction and financing for the new hospital. Thomason is the county’s public hospital, which is supervised by the El Paso County Hospital Board. Thomason will oversee the construction of the children’s hospital.The county commissioners voted 4 to 0 to approve the children’s hospital that won voter approval on Nov. 6. Commissioner Dan Haggerty was not present at the meeting of the five-member commissioners court.The hospital has been under discussion for years in El Paso. First-year Commissioner Veronica Escobar was the major proponent for the project at the county after having worked with city officials and other civic leaders over the years to make the hospital a reality.Under Valenti’s outlined budget, $2.2 million of the bond money will go toward the cost of issuance, underwriter’s discount, and bond insurance.Construction is expected to cost $74.4 million, with $19.8 million for equipment and furnishings. Professional fees are expected to cost $10.8 million, with $12.5 million set aside for contingencies and other fees.Valenti will return to the commissioners in February for approval of the bond investment plan, which the hospital district’s board must also approve. The hospital district will find a financial adviser and underwriters for the project.While Coastal Securities operates as financial adviser for the county, the hospital district will seek its own.In the past, First Southwest Co. operated as financial adviser to both the county and the hospital board. The county fired First Southwest last spring, a move that figured into a federal investigation of bribery and fraud among county officials, with two former county officials convicted of bribery-related charges.John Travis Ketner, former chief of staff to county Judge Anthony Cobos, pleaded guilty in June to fraud and conspiracy charges involving solicitation of bribes for Cobos and commissioners Miguel Teran and Luis Sarinana. All three county officials have denied any wrongdoing.Former Commissioner Betti Flores later pleaded guilty to accepting bribes in exchange for her vote on contracts for county hospital bond issues. Although the hospital district has its own board, the county commissioners must also sign off on bond issues.In a $128 million debt issue last month — the first since the federal investigation was disclosed in May — the county disclosed the investigation in its official statement for the first time. El Paso County’s credit ratings have not suffered due to the investigation. Moody’s Investors Service last month upgraded the debt to Aa3 from A1, while Fitch Ratings and Standard & Poor’s maintained their AA-minus ratings.“The upgrade to Aa3 reflects the county’s substantial economy and tax base, which are experiencing favorable growth rates,” Moody’s analysts wrote.