No word on hospital bond from Council yet
During the May 5 meeting, council passed first reading of a resolution and ordinance for the hospital to secure up to a $4,000,000 bond based on the hospital's revenue and financial status.
Despite council passing the two measures, they are moving ahead with extreme caution and asking questions before deciding on any type of commitment or amount.
"We have no intentions of issuing a $4,000,000 bond; we would have to decide on an appropriate amount," said County Councilman and healthcare committee member Thomas Williams.
The bond would pay off past debt and capital equipment leases, said hospital CEO Mary Wisner.
She said the hospital is rolling $800,000 debt into capital equipment purchases so it can pay its expenses in one sum and with a low interest rate.
The interest rate on a government bond is 11.3 percent and Wisner said she thinks the hospital would get a lower rate with a bank.
"I'm optimistic the interest rate will be better and we'll save more money in the long run," said Wisner.
She noted the hospital could get a bond at a 5 percent interest rate.
But Sloan said he and other members would like to have more information before moving ahead.
"We're willing to listen, but we need some detailed analysis and an opportunity to discuss the ramifications of a bond," said Sloan.
Sloan said he would like to specifically see a detailed cost analysis from the hospital and how much money it would save the hospital.
"What are the benefits?" said Sloan. "I want to see numbers."
Also Sloan is curious about the duration of the bond's payment period and would like an examination of the equipment leases the hospital has, he said.
Wisner said many of the equipment leases have high interest rates, she said.
Al Altman, the hospital's chief financial officer, said he is currently going through the equipment leases to identify cost savings.
He said if any leases were due to expire they wouldn't be rolled in, but if some had four or five years left it would make sense to include them.
Since the hospital is a county agency, it needs County Council's permission to go look for a bond and the county wouldn't be responsible for default, said Sloan.
"The county would not be legally obligated to pay back the bond but it could have a negative impact on our county from the perspective of the creditors and lenders," he said.
Williams said he believes the hospital is on the right financial track.
"There has been a positive bottom line for the last two months," Williams noted.
In April, council approved the hospital to go to a lending institution and secure an approximate $800,000 loan.
The hospital needs the $800,000 to pay back the CMS (Center for Medicare and Medicaid Services) that it was given in earlier payments through Medicare, said Wisner.
A new bond could save the hospital around $100,000 in CMS payments, said Altman.
Medicare regulations have changed the classification of out-patients and in-patients, which led to more patients being classified as out-patients, Wisner said.
Out-patients bring in far less money through Medicare and the hospital had been receiving PIP (periodic interim payments) based on its past volume of in-patients, she said.
Some hospital capital equipment purchases have included a 16-slice CT scanner, cardiac monitors and radiology equipment, said Wisner.
In other county business, the County Council:
• Passed second reading of an ordinance to provide a fee-in-lieu-of-taxes agreement for the Dixie-Narco Corporation.
Dixie-Narco in Williston is expected to expand it operations in the next five years by hiring 1,000 employees with 500 set to hit the payrolls in the next 13 months.
• Approved using $5,000 more to go with $25,000 in capital improvement funds to be used for repairing a section of the Barnwell County courthouse that suffered from water damage.
• Honored the Rev. Phillip Watson of Culbert Baptist Church.
Watson has led the congregation of Culbert Baptist Church in Barnwell for 38 years.