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September 26, 2012

ORMC loan co-sign still a work in progress

MILLEDGEVILLE —  

A proposal outline requesting hospital debt restructuring support from Baldwin County moved discussions in Tuesday’s Revenue, Finance and Budgets Committee meeting. 

Oconee Regional Medical Center (ORMC) representatives met with county officials and visitors from the Carl Vinson Institute of Government (CVIOG) concerning the hospital’s ad valorem tax pledge request that the county provide yearly mill collateral to reduce the interest payments on the facility’s $24.7 million bond debt.

In the last gathering, the county didn’t want to commit a tax levy for the entire 16-year life of the existing bonds. They wanted protection mechanisms in place in the event the hospital couldn’t successfully climb out of debt.

Board member District 3 Sammy Hall is the most vocal about the situation and the county’s hesitancy. At the request of the county, ORMC, along with Bruce Deskin, investment council on behalf of Cain Brothers, provided a document outlining proposed levels of cash on hand to protect the county from ever leveraging the millage.

ORMC CEO Jean Aycock said the hospital would keep a minimum unrestricted cash and investment level of at least $3 million.

The current bonds pay a 5.33 percent interest rate. If Baldwin County would support the new bond issue, the ORMC could sell the bonds at rates near 3.5 percent, saving the hospital about $500,000 per year. The money saved from reduced bond payments would continue to pay for indigent care and offset the expense of required upgrades under new government health care reform.

Funding of the remaining information technology infrastructure required by the Affordable Care Act is $3.3 million.

The proposal reviewed Tuesday asked the county to support a new bond issue not greater than $30 million utilizing a 7-mill levy provided by statute in the Georgia Hospital Authorities Law.

ORMC originally asked for a 2-mill pledge in the last meeting. Deskin said high-balling the proposal leaves negotiating room.

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