The Habersham County Commission Wednesday approved a $5.2 million bond issue for Habersham Medical Center.
The vote passed on a 4-1 vote. District 3 Commissioner Jimmy Tench was the only dissenting vote.
The Series 2020 private placement bond will secure Habersham County’s hospital through the tax authorized by O.C.G.A. Section 31-7-84 as the security for the debt obligation under the contract. The anticipated par amount of the bond obligation is $5,230,000. The note will be repaid over seven years by Habersham County at 2% interest.
Habersham County Manager Phil Sutton says a full drawdown on the bonds would result in a .56 mill tax increase. The board of commissioners will use the bonds to provide supplemental operating funds to Habersham Medical Center (HMC) when necessary to ensure the hospital’s continued operation.
During their next meeting on April 20, commissioners will establish the guidelines for the Hospital Authority to follow when requesting funds.
Commission Chair Stacy Hall says the bonds are needed to help cover a serious revenue shortfall at the already financially-strapped hospital due to the coronavirus pandemic. He and the other commissioners who voted in favor of the bond issue expressed displeasure at doing so but insist it is necessary and the responsible thing to do.
“I will say that I’m not happy about this. This is not something I want to do, in fact this is something I very much do not want to do, but the alternative is, during a global pandemic when our hospital is struggling financially more so than normally, we’re facing the very real possibility of not having a hospital if we’re not able to extend this revenue source,” Hall says.
This bond will replace the $1 million line of credit the board of commissioners recently approved for the hospital to help offset operating expenses.
Pandemic making an already bad situation worse
In a news release issued Thursday, the county’s Hospital Authority points out that rural hospitals in Georgia, and across America, have been struggling to survive for years due to declining net revenues amid an increase in the cost of supplies, equipment, regulatory requirements, and staffing.
Eight rural hospitals in Georgia have closed with fourteen more at high risk, including Habersham Medical Center (HMC).
“The COVID-19 pandemic is now further compromising our viability because, in order to protect the public and our staff, we must limit routine testing and elective ambulatory services, which are a significant portion of our normal revenue,” says Lynn Boggs, HMC’s chief executive officer. “Additionally, we must remain vigilant in screening and isolating patients with symptoms, which requires additional staff and protective gear. We are fortunate that COVID-19 positive cases have been minimal in Habersham county to date, but that is likely to change as this virus spreads.”
Sale pending
Last year, HMC entered into a five-year option to purchase agreement with Northeast Georgia Health System. Under that agreement, NGHS committed to investing $5 million annually in HMC. At the end of five years, NGHS may acquire the hospital and all its assets at no additional cost. The Hospital Authority says the county needs to ensure the current operations of HMC are maintained until the affiliation with NGHS can be completed.
“This latest bond issuance will ensure the continued operations of HMC until such time as HMC can be sold to a larger health care system or reorganize into a Critical Access Hospital,” the authority’s release states.
Other business
In addition to the bond issue, commissioners unanimously adopted a coronavirus sick leave policy for county employees during their called meeting on April 8.
They spent nearly an hour in executive session discussing a potential land deal. At the end of their called meeting, they took questions from the public.
Due to social distancing restrictions, the meeting was held via teleconference and streamed live by Now Habersham. You may view the meeting in its entirety here or on Now Habersham’s Facebook page.
