Habersham County Commissioners are expected to finalize details today on how to administer a $5.2M bond issue for Habersham Medical Center (HMC).
Commissioners approved the bonds by a 4-1 vote on April 8 during a called meeting.
The bonds will replace a $1,000,000 line of credit commissioners approved for the hospital in February. Commission Chair Stacy Hall says the bonds are needed to keep the hospital operating through the current pandemic.
At their regularly scheduled meeting tonight (April 20), commissioners will consider a resolution that would require the Hospital Authority to demonstrate need prior to accessing funds from the bonds. “The Commission will have authority to either approve or not approve HMC’s request,” Hall explains. “However, we do not have legal authority to dictate how hospital is run.”
RELATED Commission approves $5.2M bond issue
Bond debt on taxpayers
When they approved the bond issue, several commissioners expressed strong reservations about the county taking on more debt, but in the end, they said they did so to keep the hospital from going under. “We’re faced with the very real possibility of not having a hospital during this pandemic if we’re not able to extend this basically emergency revenue source,” said Hall.
Habersham County Commissioner Jimmy Tench was the only commissioner to vote against the bond issue.
“I’m looking at the other side of this. People are losing jobs, losing homes, losing lives, so I’m not going to be able to vote for this,” he said.
The day after commissioners approved the bonds, HMC announced it’s furloughing workers.
“Depending on patient volume and our ever-changing response efforts to COVID-19, anywhere from 3 to 10% of our workforce will be impacted. This could equate to – at most – 33 full-time positions,” HMC’s Vice-President of Business Strategy and Development Tyler Williams tells Now Habersham.
Williams, who will take over as hospital CEO in June when Lynn Boggs retires from the job, says the furloughs will not impact HMC’s ability to respond to COVID-19 or other emergencies. He stresses the number of workers being furloughed is “fluid” and “will fluctuate” as the hospital adjusts to the changing demands of the pandemic.
HMC already was financially strapped. Like other hospitals across the country, it’s now losing even more money because revenue-generating elective procedures and tests are temporarily on hold due to the pandemic.
What will it cost taxpayers?
For every $1 million HMC draws on the bonds it will cost the average residential household $5.65.
Calling the hospital “a huge economic engine” for our community, Hall says, “During a pandemic, I think it is worth $30 for the average homeowner to keep it open.”
| Hospital Bond cost v. millage rate v. cost to average residential household | ||||||||||
| Term of Loan amortization 7 years | ||||||||||
| Average Cost of single family home | $136,000 | |||||||||
| Average assessed value of single family home | $52,400 | |||||||||
| Current Bond Millage | 1.138 | |||||||||
| Bond Digest Value | 1,330,687,994 | |||||||||
| Draw down of Bonds | Annual interest and principle payment | $ value per mill | Millage rate | Average assessed value of single family home | Bond Cost on average household | |||||
| $1,000,000 | $143,572 | 1,330,688 | 0.108 | $52,400 | $5.65 | |||||
| $3,000,000 | $430,715 | 1,330,688 | 0.324 | $52,400 | $16.96 | |||||
| $5,230,000 | $750,880 | 1,330,688 | 0.564 | $52,400 | $29.57 | |||||
Just what criteria commissioners will use to determine whether the hospital meets its burden of “demonstrated need” remains to be seen.
An online search of HMC’s financial records shows that in 2018, salaries for the hospital’s top ten administrative positions amounted to over $1.3 million.
While more current compensation reports are not readily publicly available, Now Habersham asked commissioners whether they would consider administrative costs when reviewing the Authority’s drawdown requests.
Chairman Hall responded:
“Certainly overall costs is something the Commission is interested in. Having said that, we have no legal basis to dictate management of the hospital nor to provide any governance. That responsibility falls completely on the Hospital Authority. What we will discuss today in our resolution is “demonstrated need” in order for HMC to access funds from bonds. The Commission will have authority to either approve or not approve HMC’s request. However, we do not have legal authority to dictate how hospital is run. We always want to make sure that tax payer money is spent wisely.”
Meeting details
Commissioners will discuss the resolution during their work session at 4 p.m. and vote on it at 6 p.m. during their regular meeting. Now Habersham will carry both meetings live here on our website and Facebook page.
Members of the public may join the teleconferenced meetings by dialing 1-470-588-9497. The access code for the work session is 194 449 358 #. The access code for the regular meeting is 897 035 902 #.
If you call in, please mute your phone by dialing *6 so that background noise does not interrupt the meetings.
