Stephens Co. Commission Agrees To Back Loan for Hospital

Stephens County Commissioners sign off on backing a $5 million short-term loan for Stephens County Hospital, while starting the process on a longer-term $15 million bond.

On Tuesday, the county commission voted to approve backing the $5 million loan for Stephens County Hospital with South State Bank, as well as voted to officially begin working with an underwriter to help set up the long-term bonds totaling $15 million.

The Hospital Authority told the county commission at a called meeting last month that the initial $5 million loan would help cover immediate operational costs for the hospital and would be paid off once the long-term bond is issued. Meanwhile, another $3.8 million of that $15 million would be re-financing of current hospital bonds, leaving the hospital the rest to invest in technology, equipment, office space and other needs.

This comes after the hospital lost $4 million or so last fiscal year and continues to struggle with revenues because of, in large part, lower reimbursements from Medicare and Medicaid.

County officials and hospital officials spoke Monday.

Stephens County Commission Chair Debbie Whitlock said after seeing more information, she supports moving forward.

“That plan did show that this is going to be challenging, but it is going to be workable,” said Whitlock. “The plan could succeed with proper financial management and after the meeting, I did feel more confident that the hospital can succeed if given this chance.”

However, County Commissioner Dean Scarborough said he does not support the short-term loan.

“You cannot borrow your way out of debt and you cannot get out of a hole if you keep digging it deeper,” said Scarborough. “From a county commissioner point of view, considering our fiduciary relationship we have with the citizens, I do not see this as a good deal, to saddle ourselves with this additional debt.”

Scarborough pointed to other local hospitals and what they ran into with debt and having to sell or partner, like in Habersham and Franklin counties.

He said a better option would be a strong regional partner.

Stephens County Hospital Authority Chair Mark Wilkinson said the loan is needed to give the hospital time to look at all of its options and make the best decisions possible.

“We have to have something where we can keep going and take care of our employees and we are going to look at every option on the table, if that means selling the hospital or partnering with somebody,” said Wilkinson. “But if we do not keep the doors open, we do not have any leverage to get a good price. Right now, I feel confident that if we sold it, the county would not get hung with any debt and would get some money out of the sale to do whatever you wanted to with.”

Wilkinson noted that Stephens County Hospital will still have significantly less debt than did the hospitals in Habersham and Franklin counties.

County commissioners voted 4 to 1 to approve backing the $5 million loan, with Scarborough voting against it. The vote to approve moving forward with the bond underwriter was unanimous, as Scarborough said he voted for that because if the loan passed, he felt the bond was necessary.

Wilkinson said he appreciates the county’s support and what they have done for the citizens of Stephens County.

“I want to thank the Stephens County Commissioners on behalf of the hospital and the Authority for the decision they made tonight,” said Wilkinson. “I think they understand how big it is for our community and our county.”

The short-term loan should be available for the hospital in the next couple of days as work on the bond will continue to move forward.