The only business addressed during a called meeting of the Catoosa County Board of Commissioners on Wednesday concerned extending a short-term line of credit to Hutcheson Medical Center.
County Attorney Chad Young described the willingness of Walker and Catoosa counties to guarantee the hospital’s borrowing of up to $2.
5 million as “another step” in moving forward with restructuring HMC’s indebtedness.
“This is not a check, it is a line of credit,” Mr. Young said. “Any draw from these funds would be subject to approval by both counties.”
Erlanger Health System had recently extended a loan of $550,000 for Hutcheson’s immediate needs and the county’s action will permit the hospital to make necessary capital improvements while a longer term refinancing scheme is worked out.
The hospital is in the process of developing an arrangement that would allow leasing the hospital’s buildings to another medical entity — a local, regional or national hospital or corporation.
Lease payments would cover all servicing all of HMC’s debts and would mean taxpayers would not be called upon to pay off the hospital’s debts.
Since December, the hospital and the hospital authority have been trying to restructure debts accumulated by a previous administration.
Presently, the hospital’s long-term strategy is to secure $35 million in short term funding through bond anticipation notes and a total of about $50 million over a 30-year period.
A short-term bond anticipation note is expected to close before the end of June, officials said.
“This will be a short-term bridge to cover the gap for about six weeks,” Catoosa Commission Chairman Keith Greene said.