MILLEDGEVILLE — During Thursday's work session, Oconee Regional Medical Center CEO Jean Aycock requested that the Baldwin County Commissioners place the resolution supporting borrowing of up to $30 million to refinance existing bond debt and provide new monies on the next regular meeting agenda March 5.
Operating through the Georgia Hospital Authorities Law, ORMC asked for a county ad valorem tax pledge not to exceed 3 mills for 15 years. The hospital would like to report progress to bond holders by March 7.
Hospital representation will send a working intergovernmental agreement draft to county attorney David McRee by Monday.
The current bond interest rate is 5.34 percent. ORMC estimates the county tax pledge would drop the rate up to 2 percent, saving the hospital between $300,000 and $400,000 a year.
“We need to borrow your power to reduce this interest rate,” Aycock said.
The net proceeds would be used to call and redeem $24.7 million worth of bonds, pay off a $810,000 BB&T note and fund the acquisition of $4 million in hardware and software upgrades required by the HITECH Act.
“We will use those savings to help offset the millions of dollars in charity and indigent care being provided to Baldwin County citizens,” the ORMC CEO said. “We do not want any money from the tax payers of this county, but we do need assistance with finding solutions for the escalating free care that we are providing for this community.”
ORMC provided $3.6 million of charity and indigent care costs for Baldwin County residents in fiscal year 2012 and wrote off $5.6 million of bad debts for citizens.
This free care has overwhelmed the staff. Savings are a positive step towards addressing this issue.
“It's our vital responsibility to do everything we can as elected officials to make sure that she can service our county,” Henry Craig, District 4, said. “To a large degree the savings she's talking about will go to underfunded indigent care that is vital to our community. If we don't help, who is?”
Tommy French, District 2, asked for specific language providing public assurance that the interest savings go towards operational costs.
The resolution includes protections preventing the county from ever leveraging the millage. Unrestricted cash and investment levels must be maintained throughout the agreement.
Two-year debts service payments are part of the proposal offering the county leeway to potentially sell the hospital or other action before ever having to leverage the tax on citizens.
“The two years is the plan, so we don't ever have to get to that point,” Aycock said.
Cash balances averages of $12 million haven't changed much over the last four years, according to Aycock. The job and subsequent benefit losses have significantly impacted ORMC and physicians.
Craig asked about the overall value of the medical asset.
“There's lots of value that would protect the county if the sky fell,” Craig said.
Sammy Hall, District 3, wants to make sure citizens know the community isn't going to lose the hospital if the county doesn't sign up.
“We are basically just looking for a refinance of the bonds,” Hall said.
The District 3 commissioner said the county must have more expressed protection within the intergovernmental agreement.
“We all hope nothing is going to happen, but we have to be prepared that if something does go wrong everybody is protected,” Hall said. “It's our job to make sure the taxpayers are protected.”
Hall said the board would add the resolution by next Tuesday's meeting or possibly the following commissioner gathering March 19.
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