Voters will decide Nov. 2 whether to increase a countywide sales tax by 1⁄4 of a cent to go toward a new Allen County Hospital.
Members of the Allen County Healthcare Committee address questions about the issue.
Q: Annual payments on a $30 million financing package will take lots of money — what are the sources of repayment for the $25 million to construct the hospital and the $5 million needed to provide operating money once HCA no longer operates the hospital ?
A: Part 3 to paying for a new hospital:
Sales tax revenue from Allen County and Iola
Allen County Hospital would leave the HCA lease with zero dollars in the bank to operate on, so to borrow the $5 million from local banks to provide working capital and then pay back a bank loan of $5 million, revenue from sales taxes is being proposed.
This is the third important source of revenue in the new hospital financing package. Thursday we discussed Medicare reimbursement and before that, profits.
To complete the funding arrangements, $750,000 in sales tax revenue is needed. This amount would be generated by two sources: (1) a countywide quarter-of-a-cent sales tax, if the people of Allen County vote Yes! for the hospital on Nov. 2; and (2) The City of Iola has pledged up to $350,000 each year from the revenue it receives from its half-cent sales tax approved by its voters in 2009.
The combined sales tax revenues from Iola and the county at large will provide 35 percent of the $2,155,972 annual payment required for the first 10 years. After 10 years the bank loan of $5 million will be paid off. Required debt service will fall to $1,534,788 in year 11, and sales tax revenue will no longer be needed.
Saturday, in Part 4, the funding sources will be reviewed to demonstrate that there should be more than enough revenue to build a new Allen County Hospital and provide operating capital for it.
Only a few short weeks remain before the election. If you would like to help our voter information effort, write to “Yes Allen County Healthcare,” at A.C.B., Inc, 16 W. Jackson, Iola, KS 66749 or contact the Thrive Allen County office at 365-8128
