Part of its business plan to reorganize after filing for Chapter 11 bankruptcy was for South Wind Hospice to secure outside financing and to negotiate a discounted agreement on industrial revenue bonds issued by the City of Pratt in 2005 for the construction of the hospice house on Yucca Lane.
That has been accomplished, said Edward Nazar of Redmond and Nazar, LLP, attorney for South Wind Hospice, as he requested that Pratt City commissioners approve a limited warranty deed and bill of sale, giving title to the property to South Wind Hospice, Inc., as a condition of securing a mortgage with Peoples Bank of Coldwater.
With the loan, South Wind Hospice will pay $550,000 to bond trustee United Missouri Bank, a significant discount of the approximate $1.9 million of bonds outstanding, and approximately $110,000 to the Internal Revenue Service for employee withholding funds that were not paid by previous hospice administration. The IRS has agreed to waive approximately $50,000 in penalties.
The United States Bankruptcy Court has approved the settlement agreement as have 80 percent of the bondholders, Nazar said, and tentative agreement for the release of the IRS lien has been given.
"The situation from 2009 (when Ginger Goering became the director) to present has righted itself," he said at the regular meeting of the Commission.
Goering was not present at the meeting, but said earlier in the day, "we will be able to sustain ourselves."
After being assured that their action would not affect the bond rating of the City of Pratt, commissioners voted to approve the request for transfer of property.
The city ended the 2012 year with a total cash balance of $13.5 million, and an outstanding debt of $9 million, reported Vicki Dreiling, with the auditing firm Adams, Brown, Beran & Ball Chtd., of Great Bend.
The ending balance was down from previous years, which City Manager Dave Howard explained as a plan to make necessary upgrades in utility systems without raising rates or the mil levy.
"For a city of our size is that ($9 million in debt) unusual?" asked Mayor Jeff Taylor.
"I don't think that's unusual," Dreiling said. "Your reserves are good. As far as cash position, the city is in good shape."
She noted that the largest debt account would retire in 2018, and that the city had done some refinancing to save interest.
In other business, commissioners:
• agreed to sell two lots adjacent to his property on Green Court to Zach Deeds at $1,200 each. The lots are not accessible from a city street and Howard said that the cost to develop the lots would be a questionable expense. Deeds said he intended to use the property as his back yard.
• approved a contract to sell land in the Sandy Creek Subdivision to Realty Alliance I LLC for $167,000, with the stipulation that Alliance can assign the property to another business, but that the intended use must be for the construction and development of a hotel.
• approved the purchase of a one-ton 4 x 4 truck with a dump bed from Doug Reh for $50,345.90, which was lower than a bid from Lanterman Motors. The truck will replace one in current daily use, which will be rotated to the public works department for a lesser use, Line Distribution Superintendent Jamie Huber said.
• approved a contract with Kansas Gas Service to expand facilities in the Sandy Creek Subdivision. As lots sell in the first five years, $810 per lot will be reimbursed to the city.
• discussed the impact of a new law allowing licensed persons to carry concealed weapons into government buildings, unless such buildings have adequate security to prevent weapons from being carried in. No decision was reached, however City Attorney Ken Van Blaricum said that neither option would create liability for the city. Howard commented that either would probably result in a lawsuit in the event of a shooting in a municipal building. Exemptions to delay implementation will be explored.