Clayton waits on hospital audit before deciding on bailout

Clayton County’s only hospital must wait several more weeks to learn if the county’s government will move forward with a financial bailout.

Southern Regional Health System Chief Executive Officer Edward Bonn appeared before the Clayton County Commission on Tuesday night, but he did not have an audit of the hospital’s finances and was unable to answer commissioners’ concerns about the shaky economy.

“I didn’t learn anything new tonight,” commission Chairman Eldrin Bell said after the meeting. “The market is still very fluid and I think all he [Bonn] is doing is giving a best guess.”

The 331-bed Riverdale hospital has asked the county to back a $95 million bond to help retire debt, fund infrastructure improvements and buy new technology.

County Commissioner Wole Ralph, who asked Bonn to address the commission, said he is waiting for the audit — which could take another month — before making a decision.

“We just want to get a sense of what their financial picture is,” Ralph said.

Bonn said the bond is necessary to retire $54 million in outstanding debt, including $40 million that must be dealt with by Dec. 31. If the hospital misses that deadline, it will have to take money from its reserves, Bonn said.

But the impact likely will be more than just drawing from the hospital’s $50 million reserves. The hospital also may have to lay off some of its 2,200 employees or reduce services. The hospital ended the 2008 fiscal year on June 30 with a $7 million shortfall.

“We felt time was of the essence given what we’re hearing from the banking industry,” Bonn told the commission. “We are closely watching the market and waiting for stabilization. Although there is a great deal of turmoil in the markets in September and early October, we want to be ready to proceed in December or January.”

The county’s good bond rating would mean a savings of at least $1.5 million for the hospital. But if the hospital should ever be unable to pay the bond, the county would end up being responsible for that debt. Some county commissioners said that is too big of a risk for taxpayers to bear in the unstable economy.