DOBSON — The Surry County Board of Commissioners gave a go-ahead nod Monday night to a plan by Northern Hospital executives to refinance three bonds, a move healthcare administrators say will save millions in interest payments over the life of the bonds.

The action came as the board met for its bi-monthly meeting in the County Government Building in Dobson.

No one spoke during a public hearing on the issue.

Prior to the public hearing, Bill James, chief executive officer of the hospital, said the hospital has three outstanding bonds, one secured in 1999 for $14.4 million, a bond received in 2001 for $6.8 million and a 2008 bond for just under $15 million.

In a letter explaining the need to refinance the bonds, James said the proposed plan can eliminate some of the hospital’s debt while saving money simultaneously.

“The proposed plan of refunding is for the (hospital) to issue two separate series of revenue refunding bonds for the purpose of a) refunding and redeeming approximately $9,940,000 of the outstanding… 1999 bonds and b) refunding and redeeming all of the outstanding… 2001 bonds,” he wrote.

Once the new bonds are secured, the hospital plans to pay off the 1999 and 2001 debt, resulting in lower interest payments on the new debt.

“Because of the favorable interest rates today, the hospital has identified opportunities to refinance our existing debt and reduce our interest rate,” James said.

“The good news in all this is that by issuing these bonds to re-fund our debt, we will reduce our annual debt service and save about $167,000 a year,” he added.

Over the course of the life of the bond, the hospital is expected to save $2.3 million in interest payments, or 12.5 percent of the total debt.

The proposal must be approved by the Local Government Committee in Raleigh, and James said that board will take up the issue in July.

Once the committee approves the measure, the local board will give formal approval to the refinancing proposal.

The hospital expects to close the deal on July 19, James said Monday.

Reach Keith Strange at kstrange@heartlandpublications.com or 719-1929.