Tensions boil over bond issue

Floyd County commissioners are divided on their role in the hospital’s plans to take on new debt.

Tensions ran high during Tuesday’s County Commission caucus, as commissioners argued over the approval of a letter of support to back Floyd Medical Center’s issuance of close to $105 million in bonds.

The discussion grew so heated that the vote on the letter was deferred to the Feb. 23 meeting so more information can be presented.

The letter of support would enable FMC to learn how much lower the loan’s interest rate would be with the county’s backing. The County Commission would have another vote later on backing the bonds, if there is a decision to move forward.

During Tuesday’s discussion, Commissioner Scotty Hancock suggested that FMC figure out the interest rate without the county’s backing and proceed from there. Commissioner Rhonda Wallace countered that FMC is vital to the community and a lower interest rate was in both parties’ interest. Hancock acknowledged FMC’s value, but said it wasn’t a valid argument for backing the bonds.

Wallace, a member of the Hospital Authority of Floyd County, later said she felt that the commissioners should have voted on the letter so the hospital could figure out the interest rate with and without the county’s backing.

Wallace said she understood commissioners’ hesitation to vote, saying they needed more information, but said she will vote for the letter. However, she was not prepared to reveal her vote for the actual bonds.

Hancock, who is the director of outreach and EMS relations at Redmond Regional Medical Center, told the commissioners that he has an issue with backing FMC’s bonds.

“They have more cash on hand than (Floyd County does),” Hancock said after the meeting.

FMC should be able to issue bonds without the county’s backing, as they already have huge profits, Hancock added.

While he works at FMC’s competitor, Hancock said his opposition to the backing has nothing to do with his place of employment, as he has nothing to gain.

It is estimated that FMC would save about $5 million if the county backs the bonds. In return, the county would get an estimated $ 800,000 to $ 1 million, which the hospital would have had to pay out to a bond insurer.

Approximately $75 million of the $105 million would go to refinance two previous construction bond issues already being backed by the county. The new $30 million would be used for planned construction projects at the hospital.

“I’m kind of concerned about the county being on the hook,” said County Commission Chairman Larry Maxey, adding that he wants more information before he makes a decision on which way to vote.

Commissioner Garry Fricks said he supports the issuance of the bonds, seeing FMC as vital to the community. And if they don’t back the bonds, he said, FMC will go outside of the community for the bond and the community will lose out on about $1 million.

Fricks also suggested putting half of the $800,000 to $1 million toward lowering recreation registration fees.

Atlanta- based Jamie Wilson, the county’s bond counsel, and Rick Sheerin, FMC’s vice president of finance, are scheduled to provide more information at the Feb. 23 caucus.

Commissioner Irwin Bagwell wasn’t present for the meeting and was unavailable for comment Tuesday afternoon.