Davis County will redeem $665,000 in hospital bonds this fall it issued in 1972, bond money that has been sitting in the bank collecting interest and that was never used to build a hospital.
The County Commission Monday approved a proposal to redeem the bonds that come due this fall, using the interest money the bonds earned over the years to buy them back.Voters in 1968 approved the bond sale to build two hospitals in Davis County, one in the north and one in the south, said Gerry Hess, the county's civil attorney.
A total of $5.7 million in bonds was sold in 1972 but before the county could use the money to build facilities, private health-care firms stepped in, building Bountiful's Lakeview Hospital and Humana Hospital Davis North in Layton.
Hess said the county was able to redeem about 60 percent of the bonds sold, but the rest were not recallable until their declared due date.
The bonds were sold at 4 percent to 5 percent interest, and the county has invested the money at 10 percent to 14 percent interest over the years, using the earnings to build a surplus more than large enough to redeem the bonds when they come due.
The commissioners last month voted to take $650,000 out of the surplus account and buy 57 acres of property adjacent to the county's new jail site in west Farmington.
Hess said it was researching that transaction that led him to discover the additional $660,000 in bonds that are redeemable this year. One date, in April, has expired, Hess said, but the next call date is September and, with 30 days notice, the bonds can be redeemend.
With advertising and other legal fees, it will cost the county about $704,000 to buy the bonds back, Hess said, an expenditure the commission approved Monday.