Yes! Allen County Healthcare

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: If the bond issue is successful and Allen County gives notice to HCA that in six months the present lease on the hospital will be terminated will there be a financial settlement? What is involved in calculating the amount due and what will the two parties end up with?
A: Yes, there will be a financial settlement of some kind upon termination of the lease between Allen County and HCA over the hospital. In simple terms any improvements in hospital equipment, furniture and fixtures that have not been depreciated plus any salvage value on purchased improvements made during the last 28 years of the lease will be compared to the salvage value of equipment, furniture and fixtures still being used that were present 28 years ago when the lease was first assumed by Research Hospital.
Hospitals are like all businesses that purchase equipment, furniture and fixtures that wear out or become obsolete. A portion of such items are expensed each year to account for depreciation in value. Normally within five to seven years, the value of most equipment is reduced to zero or a small salvage value. Furniture and fixtures may be expensed over a slightly longer period, but the end result is the same — zero or a small salvage value.
It is expected that ac-countants hired by HCA and Allen County will get together and determine the amount of the value of the improvements that Allen County would assume if it, again, takes over the hospital should the bond issue pass. The terms of the settlement could be a cash amount or some method of financing the settlement amount could be negotiated.
It is expected Allen County will owe HCA money since HCA has purchased some new equipment in the several years it has operated the hospital. The dollar number is not expected to be large and some or all of the money to pay the settlement amount is included in the $5 million bank loan that is part of the financing package for the new hospital.
HCA will get all the cash balances present at the end of the lease and the cash settlement discussed above. Allen County will get the use, again, of the hospital and all its revenue. However, it will not get any of the present cash balances of the hospital. Balances be-long to HCA and because of this need for the cash, Allen County has provided for the $5 million bank loan for operating money as part of the hospital financing package. This loan will provide the money needed to pay the bills until the revenue from hospital services billed to patients after the date of the takeover flows back to the hospital — about 3 or 4 months’ worth.
Only six days 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.