At a called, joint meeting on Thursday night, the Bainbridge City Council, Decatur County Board of Commissioners and Memorial Hospital Authority entered into a memorandum of understanding that should help ease the hospital’s financial burdens.
The MOU is an agreement between the three parties that says a 15 year bond (underwritten and secured by the City and County) will be issued to essentially:
- pay off the hospital’s existing debt
- lower the interest rate (currently 3.25% – the bonds, once purchased, will be financed at less than 3%)
- save on debt service by lowering the payment AND restructuring the payment schedule to 2 interest payments and 1 principal payment per year as opposed to monthly payments of approximately $82,000)
Although the City and County are backing the debt, no new tax dollars will be used to service it. According to the MOU, if the hospital’s net revenue, net proceeds from the recently adopted service delivery strategy and SPLOST weren’t sufficient to pay the obligation, the City and County would be responsible. However, the annual debt service will be significantly below the combined revenues that the hospital currently receives from Decatur County for Indigent Care and from SPLOST. As security, the City will be granted a lien on all real estate currently owned by the Hospital Authority as well as a second lien on all accounts receivable. In the unlikely event that the hospital closes, the bond allows the City time to sell the real estate and collect the hospital’s remaining receivables to pay off the debt.
“Our hospital is worth the commitment” — Bainbridge Mayor Edward Reynolds
A final piece of the puzzle is the current Indigent Care Tax that is set to expire in 2025. Under this agreement, the tax was extended until the year 2029 to fully secure the debt obligation by fully funding a required three year reserve fund that would cover the remaining debt service after 2029 (the bond matures in 2032). The reserve fund will be held by the City and is not available to the Hospital for any other purpose.
“This hospital is a vital asset to our economy and county and this is an opportunity for us all to provide our support and understanding. I look forward to positive outcomes.” — Pete Stephens, Chairman, Decatur County Board of Commissioners
In response to a question from former County Commissioner Charles Stafford regarding the hospital’s financial condition, Hospital Authority Chair Glennie Bench stated that the hospital’s financial condition is improving and cited, among other things, that the “net loss” has improved by 84% over last year.
After the public input portion of the meeting, the boards were called to order and each voted unanimously in favor of the Memorandum of Understanding.
In closing statements, Mayor Reynolds, County Commission Chairman Pete Stephens and Hospital Authority Chairwoman Glennie Bench each thanked the boards for the spirit of cooperation.