TIFTON —
The Tift County Hospital Authority asked the Tift County Board of Commissioners Tuesday in its workshop session to back a bond issue in the amount of $6.3 million to finance capital projects and restructure debt for Tift Regional Medical Center. Commissioners are expected to vote on the issue during regular session, which begins at 6 p.m. Monday.
The current agreement with Tift County covers the $64.1 million revenue anticipation certificates issued in 2002. The hospital’s current request increases that amount approximately $24 million hospital authority entered into a $30 million, 10-year loan with a bank in 2010 which has a balloon payment of $23 million due in 2020. According to William T. Richardson, TRMC president and CEO, the hospital authority plans to restructure this loan with a longer maturity to match payments to the lives of assets financed. The hospital has plans for new construction projects and equipment, with major items including a lab and conference addition, a new linear accelerator and improvements to information technology.
Richardson told commissioners that current low interest rates, approximately 3.4 percent, would allow the hospital authority to refinance $26 million of existing debt issued in 2002 and save, in each of the next several years, $700,000 to $800,000 in interest costs. He also said that investment consultants estimate that investment returns over the next 10 years would be close to 7 percent, two percent higher than the current five percent return.
Richardson said TRMC has “sufficient internal reserves” to cover the debt.
According to a press release issued by the Tift County Hospital Authority, Lowndes, Colquitt, Ben Hill and Clarke counties have assisted health systems by the “7 mil pledge.” According to Tony Rowell, the county’s attorney, law prohibits counties from backing bonds totaling more than 7 mills of the county’s digest. Commissioner Mike Jones said he was concerned that backing the hospital’s bonds would deplete the county’s borrowing power, especially in the case of a catastrophe. Tift County Finance Director Leigh Jordan said county’s are prohibited from borrowing more than 10 percent of the net tax digest. She indicated that the county’s backing of the bonds would decrease the county’s borrowing power.
Jim Carter, the county’s manager, noted that there had never been a problem before with the county backing the hospital’s bonds, he understood the commissioner’s concerns.
“Every time we underwrite debt, we, for a lack of a better word, are co-signing on a loan,” Carter said.
Carter suggested that two or three commissioners meet with several members of the hospital authority to discuss any concerns prior to Monday’s regular commission meeting.
John Prince, hospital authority board chairman, told commissioners that the hospital authority, of which several members are appointed by the Tift County Board of Commissioners, voted unanimously to ask the county to back the bonds. He noted that only 47 percent of all patients at the hospital are from Tift County; that the hospitals total revenue last year exceeded South Georgia Medical Center; that the hospital authority had never asked for mills to be pledged for indigent care; and that only 32 cents of every dollar charged by the hospital was collected, with 68 percent of charges being written off. He also said that the hospital had $400 million in collateral to protect the county’s $6.3 million pledge, noting that land values had increased.
“I pay a lot of taxes in Tift County and I would be the last to want an increase in the millage rate,” Prince said.
In a press release issued by TRMC’s Outreach & Development Department, “In 2011, the Hospital Authority provided over $57 million of indigent and charity care of which $31 million (54 percent) was provided to Tift County residents. In that year, 46 percent of inpatient admissions came from Tift County.”
“This bond issue will help us keep pace with the demands of modern health care in the most cost-effective way possible,” Richardson said.
To contact reporter Angie Thompson, call 382-4321.
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