Iola City Council members said Monday they were willing to continue supporting Allen County Regional Hospital, for the next year, in the form of a quarter-cent sales tax.
The sales tax, expected to generate around $300,000 in 2020, would be a continuation of the citys support of ACRH since before it was constructed in 2013, and would allow the county to transition to a renewed sales tax commitment of its own.
Larry Peterson, the hospitals interim chief executive officer, and trustees Loren Korte and Jim Gilpin visited with Council members Monday to brief them on ACRHs new lease agreement with Kansas City-based Saint Lukes Health Systems.
The agreement was signed Oct. 22, with Saint Lukes expected to take over the facility sometime early next year.
Its a little bit like buying or selling a house, Korte said. You sign a contract, and two or three months later, you get to move in.
Through terms of the 10-year lease agreement (with five-year options available after that), Saint Lukes is to assume responsibility of the hospitals construction bonds.
The county and city (if Iola Council members approve) would use sales tax revenues for building maintenance and equipment upkeep.
Iola has allocated a quarter-cent sales tax to the hospital since 2012, which was coupled with the countys own quarter-cent levy. Up to now, those revenues have been used to ensure the hospital had sufficient working capital, Gilpin explained.
That would change once Saint Lukes takes over.
Iolas obligation comes from a half-cent sales tax levy local voters have supported for more than 30 years, with funds dedicated for major street work and other capital projects. Voters renewed last fall the sales tax authority for another 10 years, with the understanding the county could come back and ask for more financial assistance for the hospital.
Meanwhile, the countys quarter-cent sales tax authority expires at the end of 2020, Gilpin said.
The plan is to bring the matter to a countywide vote to reauthorize a slightly higher sales tax three-eighths of a cent to replace Iolas contribution, Gilpin said.
We appreciate very much the many years youve made this possible, Gilpin said. One more year would get us to where we need to be.
In setting the citys 2020 budget, Council members put in as a placeholder a $300,000 sales tax allocation for the hospital, and another $150,000 in 2021.
