Hospital meeting packed

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By Tia Lynn Ivey managing editor

Almost 200 people attended Morgan Memorial Hospital Authority’s (MMHA) public meeting last week to hear a presentation on the $35 million new hospital project, which will cost $2.2 million per year in debt service payments, and the current desired federal funding source the authority is pursuing. The authority announced last month the decision to seek a USDA (United States Department of Agriculture) loan instead of a HUD (Housing and Urban Development) loan as previously intended. During the presentation, hospital leaders explained their rationale behind switching to USDA. According to the MMHA, USDA offers a plethora of benefits over HUD, but the number one reason to switch over came down to the interest rate currently being offered during the next three months. If MMHA locks in with the USDA within time frame, the interest rate on the $35 million dollar loan will be 2.875 percent. According to MMHA, the USDA currently has more available funds to lend at a long-term fixed rate than HUD currently as available. The MMHA also announced that a draft version of the feasibility study has been completed. According to Morgan Memorial Hospital (MMH) CEO Ralph Castillo the results of the feasibility study “clearly shows, using conservative projections, that the project is realistically achievable and can be maintained long-term.” Citizens spoke both in favor and in opposition of the new hospital at Wednesday evening’s meeting.

Supporters argued that the current hospital, builtover 50 years ago, could not be renovated cost effectively, that new industry would not settle in Morgan County without a modernized hospital constructed, and that the hospital provided lifesaving treatment for countless county residents over the years. Opponents argued that the project was moving too fast and the public has not had enough input into the process (via a referendum). Citizens also questioned the long-term affordability of a new $35 million dollar hospital, wondering if Morgan County’s small population could support the new hospital. “We are moving ahead at warp speed on this thing and incurring expenses,” said Bob McCauley. “There has got to be more deliberate and more rational and deep, deep, involvement on the part of the citizens in this process.”

MMHA Chairman Terry Evans disagreed with McCauley’s assessment. “We have been working on this for three years. I don’t know what dimension you’re living in, but that certainly is not warp speed by anyone’s imagination,” said Evans. “I’m amazed that people think we just suddenly decided to build a hospital.” Fred Bell, who is currently running for county commissioner, criticized the hospital boards finance figures, expressing disbelief in the feasibility of constructing a $35 million dollar hospital. Keith Davis, a member of the online group Citizen Morgan, criticized the MMHA for the funding switch from HUD to USDA. “It seems like the dog and pony show has changed a lot in the last year or so,” began Davis, who cited the MMHA’s previous statements on HUD being the safest option to protect taxpayers of Morgan County.

“If that was true, why did you abandon it? And who pays for this loan if for some terrible reason you default on it? Can you make a commitment that you won’t need any more money than the $1 million per year from the county?” Alan Richman, president and CEO of InnoVative Capital tackled Davis’s questions, arguing that that USDA featured the same “rigorous approval process” as HUD, but is offering a much lower interest rate. HUD’s interest rate was quoted at 4.75, according to Richman. “As far as the county’s part goes, if the hospital goes out of business or defaults on the loan, then there is still no obligation for the county to make payments,” said Richman. As long as the hospital is in business, the county will only be obligated to make the $1 million payment per year, which is required for securing the loan.” MMHA pledged to make the results of the official feasibility study open and available to the public within the month and will hold another public meeting about it on Thursday, May 5 at 2 p.m. at the Department of Family and Children Services conference room located at 2005 South Main Street in Madison.

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