Allen County commissioners said Tuesday they fully support construction of a new Allen County Hospital, but put off a little longer voting to start the process.
“It’s clear we all support the recommendations” of consultants and the citizens’ Hospital Facilities Commission that a new hospital is warranted, Commissioner Dick Works said, but added he preferred to identify specific funding before taking a vote.
Commissioners Gary McIntosh and Rob Francis concurred.
The funding decision yet to be made is whether the county will ask voters to approve a quarter- or half-cent sales tax to meet debt service on a $5 million loan to provide working capital. That is separate from funding needed for construction.
Working capital is required because when the county takes control of the hospital, “we will start from ground zero” in regard to money in hand for general operations and equipment purchases, McIntosh said. “It’s also important to note that the sales tax funding will be needed only for 10 years.”
The county also will need an unspecified amount of money to buy out its contract with Hospital Corporation of America, which has operated the hospital the past five years as a for-profit facility. The contract provides for that by either party with six months notice.
The determining factor for local sales tax funding is what the city of Iola can put up financially. The city has been asked to provide a portion of the working capital funding from proceeds of a half-cent sales tax it levies for capital improvements. A decision by city commissioners may be made at an adjourned meeting scheduled for 11 a.m. Thursday.
Money to pay off construction bonds will come from Medicare participation and annual profits made by the hospital, expected together to approach $3 million a year, an amount sufficient to deal with construction costs of $25 million for a new hospital.
Once a decision is reached on the magnitude of a sales tax issue, “we’ll need to do a lot of education of voters,” Works said, a task that will fall in large measure to members of the facilities commission and volunteers, who already number about 100.
The HFC is continuing to meet, to plan a campaign for the referendum and also help county commissioners with site selection.
Another chore facing commissioners is selection of an independent hospital board, a primary function of which will be to decide management of the hospital once it is the county’s responsibility. A management company — HCA remains a possibility — or individual chief executive and financial officers answering to the hospital board will be considered.
“We have a lot of qualified people in the county who could serve on a hospital board,” Works said, adding he had been making a list as names came to mind. McIntosh and Francis said they, too, were accumulating names.
Iolan Jim Lewis cautioned commissioners that “many people aren’t ready for a tax increase” and that “you can get in real financial trouble,” because whatever approach was taken ultimately would be the responsibility of the county and its taxing authority.
Works replied that he was confident that bond purchasers would look closely at the numbers and the county’s ability to meet debt service, which would be the ultimate test of an issue’s viability.
Funding delays hospital decision
