The resolution, which is in the form of a tax anticipation bond in the amount of $25 million, will be used in part to pay off a high-interest $12 million debt that the hospital owes to Medicare.
The Medicare debt carries an 11-percent interest rate, while the new bond will provide the hospital with a 1-percent interest rate on the consolidated loans.
“Catoosa County met with a legal team here in the office yesterday (Wednesday, Feb. 6) and it was my understanding that they were supposed to sign the resolution this morning (Feb. 7),” said Heiskell.
The commissioner said she has “collaborated with the best legal team in the state of Georgia for weeks, and they have gone over this with us and Catoosa and they’re comfortable with this, and so I’m somewhat comfortable with this,” prompting her to agree to sign it.
“That is a very, very strict resolution,” said Heiskell. “It is difficult for me to even sign, but we’re talking about 850 jobs, we’re talking about the whole community.”
“Everything that’s in here, I think is very fair,” she said.
“What’s important to understand is that this is a half-mil commitment if it all comes to an end,” said Walker County coordinator David Ashburn. “Where, in the fifties and sixties, Walker County was paying four mils, not committing it, paying it, to the development and support of the hospital at the time, and we’ve got the old records on where that was part of the administrative accounting at that time.”
“That was indigent care,” said Heiskell. “We’re no longer required to levy millage for the indigent. The only requirement that we actually have is to fund our inmates. Inmate medical is all the requirement Walker has...This is not for indigent. This is to save the hospital, though there is a lot of indigent care that does go on there.”
The funds in the new bond are also not meant to be used to pay Hutcheson’s $20 million debt to Erlanger in the event that the hospital goes under and must be sold.
“This doesn’t cover Erlanger’s debt because Erlanger’s debt is already covered by the sale of the hospital. And they plan to pay Erlanger off but we’ve got first dibs on this money,” said Heiskell. “These bonds will be paid first before anybody else’s because Walker and Catoosa should never have to pay this. And if Dade elects to come in on this. then it will reduce the amount from a half a mil each to a little less than half a mil.”
“The hospital can’t survive without this support,” she said. “They can’t.”
The resolution stipulates that Walker and Catoosa counties must have an equal number of appointees on the hospital’s board of trustees, though whether that number will be set at four or five has not been decided. Heiskell supports a 4-4-1 split, in which Dade County has one representative, while the option to have a larger board with a 5-5-2 split has also been proposed. Dade County has not decided whether to sign off on the new bond issue and may not factor into the board of trustees at all.