Effingham Hospital Authority members are expected to approve a resolution from the county commissioners supporting their plans for hospital expansion and modernization.

 

Commissioners, in a 5-1 vote, agreed to a resolution backing the hospital’s proposal for a $30 million modernization and expansion.

 

Commissioners were scheduled to vote on the resolution at a special called meeting Friday, and the resolution was hammered out in the minutes before the vote.

 

“I don’t anticipate any issues,” Hospital Authority Chairman Rick Rafter said. “I think this is a good project for the county.”

 

Should the Build America bond package, issued by the Department of Housing and Urban Development, be approved, the hospital will embark on a 50,000 square foot addition and a renovation of the existing 40-year old facility. Included in that is a new Alzheimer’s wing for the Effingham Care Center. 

 

The hospital aims to open its additions and renovated areas in 2012.

 

Rafter also said he appreciated the efforts of the county commissioners.

 

“I know they have a hard job to do,” he said. “We worked hard the last couple of weeks to resolve the issues between us. It shows we can work together and if we do work together, we can provide a good benefit for the county.”

 

Commissioners insisted, and got, a guarantee of a maximum of financial support for the hospital. The hospital will get no more than 2 mills in property tax and no less than $3.6 million per year over the life of the loan.

 

“That was one of the biggest concerns we have,” said Commissioner Verna Phillips.

 

Commissioner Myra Lewis said that was one of the biggest concerns of citizens who called the commissioners — just how much was the hospital going to ask for in property tax support.

 

“That’s been the question all along,” added Commissioner Bob Brantley. “It helps to know how deep the hole is.”

 

Brantley said he went to the hospital to have blood work done Thursday and was handed a flyer on behalf of the hospital expansion that said the hospital would ask for 2 mills and no more than that.

 

As part of the Build America bond application package, the hospital authority was seeking a guarantee of 2 mills a year for 25 years. HUD has extended an invitation to the hospital authority to apply for the bonds. The bond program expires at the end of the year, and hospital officials have been pressing the commissioners for an answer on the resolution so they could move ahead with the loan application.

 

“I’m glad we’re past this point,” Rafter said after the vote. “I look forward to getting the loan and getting the ground broken and dedicating this hospital to the community.”

 

Part of the resolution calls for the county to have the right of first refusal, subject to HUD approval, should the hospital decide to sell any of its property. Hospital representatives objected to a clause that allowed the county to sell the hospital if the millage rate to support the hospital rose above a certain rate.

 

“I’ve never seen anything like that,” said Rusty Ross, an attorney representing the hospital authority. “You have appointed hospital authority members to run the hospital, and now you’re asking to have the power to force the sale of the hospital.”

 

Commissioners eventually removed the clause and the clause was re-written. The new paragraph spells out that the county may inject up to $10 million in special local option sales tax proceeds, should another round of SPLOST be approved. That would reduce the loan amount from the bonds to $19.6 million.

 

It also would lessen the obligation from the county to the hospital authority to $2.95 million a year. 

 

“We all know we’ve got to fund the hospital and fund indigent care,” Brantley. “We know we’re stepping into a hole — we just don’t know how deep the hole is. I just feel we’re going into an uncharted area. We don’t know what we’re going to run into.”

 

County Attorney Eric Gotwalt said the final contract between the county and hospital is still an unknown, since HUD and the lender review the application.

 

“We’ve tried our best to come to common ground and come up with terms that address everyone’s concerns,” he said. “The intent was to try to provide some addition security for the commissioners, so you would have a better idea of what their maximum financial obligation would be under this contract.” 

 

Ross said the hospital, which stands to get a 35 percent rebate on its interest from the Build America bonds, could return to the county some of its financial commitment if excess reserves are built up.

 

Commissioners revised a clause that called for the hospital authority to seek the advice and consent of further expansion projects of at least $1 million. That figure eventually was set at $500,000, a figure proposed by Commissioner Reggie Loper.

 

“How about zero?” said Chairman Dusty Zeigler. “Our obligation is to fund indigent care, not building projects at the hospital.” 

 

Zeigler, who cast the only dissenting vote, said he viewed the hospital’s plans as a “speculative investment” and an investment he did not see as a good one.

 

“You can’t just build and build and build and build, while we’re not able to measure the indigent (care costs),” he said. 

 

County commissioners and staff have met repeatedly with hospital representatives over the last few weeks to come up with an agreement amenable to both sides.

 

“I went to bed at 2 o’clock this morning and was woken up by the phone at 6:30. It’s been like that for me for the last couple of weeks,”

Brantley said. “Rick and I have talked daily sometimes, trying to get something that will work. We proved better communication makes things work better.”

 

“We’ve had several meetings with the hospital,” County Administrator David Crawley said. “Eric Gotwalt and Rusty Ross have worked very diligently to get some of these issues resolved.”

 

The commissioners also agreed to provide 3.78 acres of land adjacent to the hospital for the new construction.

 

As part of the resolution, the hospital authority will provide quarterly updates to the commissioners on uncompensated care costs. Rafter said the hospital authority and the commissioners need to continue to stay in contact.

 

“It’s my goal to make sure those lines of communication stay open,” he said. 

 

Ross called Friday’s vote “the beginning of the end.”

 

“The end is agreeing to the contract and getting the loan closed,” he said.