04-12-03: Hospital board finalizes cancer center financing

04-12-03: Hospital board finalizes cancer center financing

By TIMOTHY COX
The Daily Standard

COLDWATER - The final piece of a complex financing puzzle fell into place Friday afternoon when Mercer County Community Hospital board members approved that hospital's stake in a regional cancer treatment center under construction in Celina.
    The Mercer County hospital board was the fifth and final member of the West Central Ohio Regional Healthcare Alliance to sign off on bond financing documents that should close the deal on Tuesday when $6.12 million in bonds are issued to go toward the project. Alliance hospitals in Coldwater, St. Marys, Van Wert, Lima and Bellefontaine joined together nearly two years ago to form the non-profit Cancer Network of West Central Ohio.
    The $6.8 million, 24,000-square-foot oncology unit is under construction just off Havemann Road in Celina. Work was began with a $500,000 line of credit. The Grand Lake Regional Cancer Center is expected to open early next year. Alliance hospitals also plan to build a similar treatment center in Bellefontaine.
    Hospital board members waded through stacks of legal papers and approved several agreements and resolutions necessary to close the deal. But all of the legalese boils down to one thing.
    "In essence, the hospital is assuming one-fifth of the debt," CEO Jim Isaacs told a half dozen board members who attended the special meeting.
    The hospital's share of the cost would be $1,224,000 plus interest over the life of the bond issue. The 20-year bonds will be made available only through a private issue, with flexible interest rates computed weekly through a complex formula and capped at 10 percent. An initial rate will be determined after Tuesday's anticipated closing.
    Cancer network officials expect the debt will be retired sooner than 20 years, Isaacs said.
    "If there is high usage, it will be paid off more quickly," Isaacs said.
    Revenue from the cancer center is expected to cover debt payments, Isaacs said. If revenue falls short, other hospital funding can be used, he said. However, even though the bonds are officially issued by the Mercer County Commissioners, no local tax revenue could be used toward the debt, he said.
    The hospital alliance had pursued federal funding to help build the center and reduce the cost to each local hospital, but the project was passed over during the last federal budget process, Isaacs said. Officials are considering whether to reapply for funding the next time it is available, he said.

SUBSCRIBE TO THE DAILY STANDARD

Phone: (419)586-2371, Fax: (419)586-6271
All content copyright 2003
The Standard Printing Company
P.O. Box 140, Celina, OH 45822