Riverdale hospital bailout approved

Clayton County’s only hospital will stay open and employees will keep their jobs — with little risk taxpayers will end up paying the bill.

The Clayton County Commission voted unanimously Tuesday to back a $40.2 million bond for Southern Regional Health System.

The vote means the 331-bed Riverdale hospital will not default on its loan, which is due to SunTrust Wednesday.

“We feel it is a great victory for the county and the community,” said Dr. Raju M. Vanapalli, an orthopedic surgeon at Southern Regional. “We can continue to provide the care that is expected of us.”

Last month, the commission voted down the bond, concerned taxpayers might end up paying the $40 million debt.

“There were negotiations up to the last minute to assure citizens will not be on hook for the hospital’s responsibilities,” County Commission Chairman Eldrin Bell said.

Tuesday’s vote assures that won’t happen, interim hospital CEO Clint Matthews said.

“They don’t have to write any checks or hand over any dollars,” Matthews said Tuesday night as his board chairman called SunTrust.

Tuesday’s voted had several major changes from the previous proposal, including a promise that the hospital will place at about $12 million in special reserve accounts.

The hospital has agreed to place $4 million in a reserve and $2 million to $3 million of revenue in another account. The hospital has also promised to maintain enough cash to operate the hospital for seven days, which totals about $5 million.

The hospital also agreed to allow the commission to appoint two members — Commissioner Wole Ralph and county finance director Angela Jackson — to serve on the hospital’s 20-member board of directors.

“I didn’t in my heart think it would be a 5-0 vote,” said Ron Dodson, chairman of the hospital’s board of directors. “This shows we have done our homework. We worked up to the last 10 minutes to make them understand as much as possible.”

Hospital officials and commissioners have spent the past few weeks behind closed doors arguing over the proposal. The decision to allow two county members on to the hospital board came minutes before the vote and was against the hospital’s initial wishes.

Dodson declined to comment on the board appointments.

However, for some commissioners the appointments were a deal-breaker.

“The best thing about this deal is it allows taxpayers to have additional assurances by having a commissioner and finance director on the board,” Ralph said. “It provides oversight.”

Even with the county’s help, Southern Regional is still struggling financially, Dodson said. The hospital has hired a management consulting company to trim fat and restructure the facility.

“I can’t say absolutely no cuts, but we’re pretty much down to the minimum needed to continue services,” Dodson said. “No it’s not over, but we can now continue to concentrate on building [patient] volumes. But there will be sick people whether the economy is bad or good.”

In fiscal year 2008, the hospital ended with a $7 million loss.

Bell said he still expects the hospital to give the county a three-year plan on changes in management.

Hospital CEO and president Edward Bonn resigned Dec. 19 — three days after the commission initially voted the bond down. Matthews, a management consultant, is running the hospital until a replacement can be found. The hospital has not started a search yet, but received several resumes, Dodson said.

Last fiscal year, 74,212 patients came to Southern Regional’s emergency room and 3,938 babies were born. Most patients were from Clayton, but some were from south Fulton, Henry, Fayette and DeKalb counties.