The Tift County Board of Commissioners voted in unanimous approval Monday night in regular session to back Tift Regional Medical Center’s bond issue in the amount of $6.3 million to finance capital projects and restructure debt for the hospital.
Hospital representatives ensured commissioners that the hospital had $700 million in reserves, property insurance, property values and other collateral to cover the bonds.
Jimmy Allen, a Tift County Hospital Authority board member, told commissioners Monday night that hospitals and boards had looked at re-financing options and issuing bonds seemed the best route to take. He said hospitals in this area were in a turf war and competing for business. He said that Tift Regional Medical Center is truly a regional hospital and that 48 percent of the hospital’s patients are from Tift County.
Allen said that the hospital authority’s ability to re-pay the bond had increased seven times since the last bond was issued in 2002. He said the money made in interest on the bonds would go back into better health care for local citizens.
Commissioner Mike Jones asked last week in the commission’s workshop session how the county’s backing of the bonds would affect the county’s borrowing power in the case of a disaster, such as hurricane damage. He also asked if it was possible to develop an inter-local agreement between the commission and the hospital authority stipulating that the authority would hold enough money in reserves to pay the debt if something unforeseen happened in the county.
Commissioners Sherry Miley and Melissa Chevers also asked for a recommendation in the issues from Jim Carter, the county’s manager, and Tony Rowell, the county’s attorney. Carter said he had studied the issue of whether or not the county’s backing of the bonds, which is essentially co-signing on a note, would affect the county’s ability to borrow money.
Commissioners, the county’s finance director, Carter and Rowell discussed in workshop that, by law, counties are prohibited from borrowing more than 10 percent of the net tax digest. Carter reported Monday that it was discovered during a meeting with himself and a few members of the commission and hospital authority since last week, that the seven percent the county would pledge on the bond issue would not be subtracted from the total 10 percent the county could borrow. The agreement between the commission and the hospital would be contractual, with the county only underwriting the bond debt.
In addressing Jones’ question on developing an inter-local agreement between the two parties to ensure that TRMC had enough cash in reserves to pay the bond debt, Rowell indicated that the IRS frowned on such agreements and that the hospital’s investment earnings on the bonds would then have to be reported.