By Joel Hall
In July, the Clayton County Board of Commissioners (BOC) agreed to back a $95 million bond for capital improvements at Southern Regional Medical Center (SRMC), the county's only trauma center.
This Tuesday, however, in the wake of recent market conditions, commissioners indicated they are reconsidering their original decision.
The BOC requested additional information from the SRMC before moving forward with the proposal. That information will be presented to the BOC at next week's regular business meeting.
Eldrin Bell, BOC chairman, said, due to the "volatility" and "instability" of the financial markets, the BOC is taking extra care to make sure the hospital can repay the $95 million bond before the county underwrites it. "The market has turned almost upside down since July," said Bell. "Banks are closing ... financial giants are going under. It is my duty to see that the board takes every precaution."
Angela Jackson, finance director for Clayton County, said the county currently has about $107 million in debt. If for any reason SRMC were to default on the loan, the county's debt would double, she said. "If they default on the loan, we would have to pay, which would mean that we would have to raise taxes to repay the $95 million," said Jackson. "That's a big risk."
Jackson said that $33 million of the proposed bond would be used to promote the growth of SRMC, including structural improvements, updated surgical suites, and technological advances for its joint and spine, outpatient radiology, sleep diagnostics, neuroscience, and cardiology departments. The other $62 million would be used to refinance the hospital's current debt at a lower interest rate.
Commissioner Wole Ralph expressed caution about the proposed bond, citing declining property values as a reason. "Property values are going down, which means the county is receiving less dollars into its coiffeurs if we maintain this same tax rate," said Ralph.
"As a result, it becomes prudent for the county to re-evaluate where we are, and what our risk is. The county has to be comfortable that they won't be in a position where they will have to raise taxes to repay the bond of the hospital."
Melody Mena, managing director of surgical services at SRMC, said the hospital has done much in the last few years to streamline its services. In addition to cutting several middle management positions and curbing wasteful spending in its medical supply department, the hospital was recently recognized by VHA Georgia, Inc., a network of community-owned health care systems, for achieving over $2.1 million in annualized savings.
Mena said the hospital is in good financial standing, but needs the bond to update antiquated infrastructure and equipment.
"This is about providing good medical services to Clayton County," said Mena. "We have infrastructure that needs to be fixed. The building is over 30 years old and there is a lot of physical work that needs to be done.
"This is not a bailout," Mena continued. "We are in no way, shape or form, in that kind of distress. We need money to buy new equipment and fix the building."
Bell said he would press the hospital for additional financial information before approving the bond. However, he added that he is dedicated to the success of the hospital, which is one of the county's largest employers.
"Our hospital is very important to us," said Bell. "It's very important to the citizens of Clayton County, and I want to do everything within reason to assist them.
"I will continue to stay on top of it, because I have no intention of going into the hospital business," said Bell.