Prime to invest $20M at City Hospital
Commissioners approve use of government bonds
East Liverpool City Hospital can undertake up to $20 million in improvements following action taken Wednesday by Columbiana County commissioners.
The resolution approved by commissioners allows Prime Healthcare Foundation, which acquired ELCH in 2016, to finance projects using tax-exempt government revenue bonds, which result in below-market interest rates for the borrower.
According to the resolution, Prime intends to use this method to borrow up to $387 million to finance and refinance health care facilities and/or projects in California, George, Texas and Ohio, with no more than $20 million of the amount earmarked for ELCH. There is no financial liability for commissioners, whose only role is to serve as facilitators in granting Prime the permission it needs to participate in the government bond program.
“Prime has come in and helped turn around the hospital, and financially we’re doing well. But like any other hospital, we have continuous needs for capital and future projects,” said ELCH President and CEO Keith Richardson, who attended the meeting.
Richardson said the only project they intend to finance immediately with some of the $20 million is an upgrade of the radiology department, which will include expanded air conditioning capacity. The warmer temperatures can affect the quality of the imaging photographs produced by the new digital equipment they plan to acquire.
“It’s in an older part of the building and in the summertime it can’t keep the area cool enough,” he said.
This represents about $1 million in improvements, and Richardson said the are also considering adding more digital rooms and a second more advanced CT scanner that will enable them to better diagnose health problems. He said any other upgrades or improvements are still in the “conceptual stage, and may happen one day or not.”
Prime is borrowing the money to give itself “project flexibility,” with Richardson noting ELCH is an older building, and, as is the case with older buildings, sometimes equipment breaks down or needs replaced.
“It’s good to have a little bit of cash to spend on needs as they arise,” he said.
Also attending the meeting was Phil Letendre of the Public Finance Authority, which has been retained by Prime. PFA is a tax-exempt bond-issuing authority created by local governments for local governments to simplify the financing process for economic development projects.
Letendre said PFA can cross state lines in seeking government bonds for projects, which saves Prime the time and money from having to go from each of the states and asking a local government body there to adopt a resolution authorizing it to borrow the money.
“What this does is allow Prime to aggregate all of those projects under one financing (resolution) …. Rather than having to piecemeal it out, they can just do one set of documents, one financing team. So obviously, the cost efficiencies are much greater than doing this individually,” he said.