Posted: Monday, November 18th 2013 at 11:26pm
Habersham secures $5-million line of credit to shore up hospital
By Rob Moore Editor
CLARKESVILLE - The Habersham County Commission took steps Monday night to help stabilize the financially-strapped Habersham Medical Center.
During its meeting, the commission approved several documents related to a hospital bond line of credit. Those documents included an intergovernmental agreement between the county and the hospital authority; a resolution of the Hospital Authority of Habersham County providing for the issuance of a Taxable Revenue Anticipation Certificate, Series 2013, in the face amount of $5 million; and a petition for bond validation.
Habersham County Commission Chairman Chad Henderson explained more about the vote.
"We're looking at taking some action right now just to make sure that we can shore up the financials of our hospital," Henderson said. "We're doing everything that we can to make sure that we meet the financial obligations that the hospital requires us to meet for them.
"The 1978 bond documents require that the county commission pays any shortfall that the hospital has - and we will do as we're required by law to do," Henderson said. "Tonight we took some action that will help us to be able to do that in the short term. It wasn't the ideal situation, but it was the best option that was on the table. We're going to do everything that we can to make sure that we assist them."
The hospital dominated discussion at least three times during Monday's meeting.
Following the meeting, Henderson summarized the actions taken.
"What we did was secured a $5-million line of credit through [Community Bank & Trust]," Henderson said. "We took bids. We had three finalists that we looked at, and all three were very attractive - United Community Bank, State Bank, and Community Bank & Trust. The interest rate that was a slight bit higher through CB&T, but the fees and the draw-down schedule was more attractive."
Also during Monday night's meeting, the commission ratified the November 2013 Supplemental Operational Payment in the amount of $300,000, and approved "future bond payments to the Habersham Medical Center Authority for the remainder of the 2014 fiscal year, up to the amount of $1,581,848.
"The HCMC bond documents hold the county responsible for any shortfall in funding the 2005 and 2007 bond payments," a memo from County Manager Phil Sutton states. "The hospital has provided us with a spreadsheet which shows that the county is responsible for paying five additional monthly bond payments of $275,368 and one payment of $205,008, for a total payment of $1,581,848. The attached spreadsheet indicates they may ask for an additional $556,870, for a total of $2,138,720."
During the public comments portion of the meeting, former Habersham County Commissioner Lee Mulkey suggested the timing might be bad for the county to take out a line of credit.
Citing ongoing negotiations with Northeast Georgia Medical Center, Mulkey said a cash infusion might change those negotiations.
"As pointed out previously, we're in serious discussions with another hospital operation that perhaps will make a portion of this unnecessary, perhaps not," Sutton said later during the meeting.
Commissioner Sonny James said he realizes the county is obligated to make the bond payments for the remainder of the budget year, but he wants to see Habersham Medical Center leadership curtail spending.
Henderson said the county has asked the hospital to make a full report to the commission of cost-cutting measures being implemented, and he anticipates that report could come in December.
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