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Show lauis IPs QeoBital Umi Sd3 By ROSELYN KIRK Davis County Commissioners Commis-sioners authorized Ken Newman New-man of Burroughs and Smith Bonding Agency to purchase hospital bonds that are outstanding outs-tanding in the amount of $4,700,000. COMMISSIONER Glen Flint said, "By redeeming the bonds, the county can clear their indebtedness." He said the county has the money available to purchase the bonds. The purchase of the bonds that are outstanding "will allow the county to get out of debt without costing the taxpayers a penny." Commissioner Com-missioner Flint said. The services of the bonding company will cost $1 for every $100 worth of bonds purchased. Mr. Newman said the total cost will be $47,000 or one percent of the $4,700,000 bonded indebujdness. MR. NEWMAN said he will work with bond attorneys and banks in buying up the bonds. Those which can't be purchased will be placed in escrow and allowed to mature. ma-ture. Commissioners agreed that the bank charges for holding the bonds in escrow will be borne by the county. County commissioners also agreed not to purchase any hospital bonds for at least six months. Before accepting the; Burroughs Smith proposal, the commission was advised by Milton Hess, county attorney, attor-ney, that two other options were open to them. Commis- sioners could allow hospital bonds to mature. This would greatly limit the county's bonding capacity, Mr. Hess said. HE SAID the second possibility pos-sibility would be for the commissioners com-missioners to find another bonding company with the expertise needed to buy the hospital bonds. Mr. Hess said the commissioners commis-sioners were being cautious about choosing a bonding company since "they were dealing with public money." Commissioner Stanley Smoot asked Mr. Newman if the company would be buying at the best price and doing the best for the county. MR. NEWMAN assured the commissioners that Bouroughs and Smith is a conservative company that has been in business for 70 years. "We won't take any risks," he said. Burroughs and Smith was the original bondsman for the hospital. Mr. Newman said the bonding company hopes to buy the bonds back from the major casualty companies without the three percent penalty and thus make a profit. He hopes the bonding company will be able to buy bonds back under their par value. "Our worth is the ef-. fort to do this," he said. MR. NEWMAN told commissioners com-missioners it will be necessary neces-sary to exert a lot of pressure to find out where the bonds are. Very few are held by Utah companies, he said. He said about half the bonds are held by six major companies. Mr. Hess asked if Burroughs and Smith would work on a hourly basis in purchasing the bond. Mr. Newman said this is not possible pos-sible since the bonding company com-pany is assuming a risk. He said, since the maturity value of every bond is different, the bonding company is looking at a 30 year schedule. MR. NEWMAN said nego tiating with holders is difficult, dif-ficult, and Burroughs and Smith must "exert a lot of pressure to know where the bonds are." He argued that Burroughs and Smith were the best company to buy bonds since they were already informed on current bonding status. MR. HESS cautioned Mr. Newman that commissioners would "be stuck with the bill whether Burroughs and Smith does a good or poor job in getting good value for the bonds." Mr. Smooth moved the commission authorize Mr. Newman to proceed with the sale. The commission voted unanimous approval. |