A proposed $75 million bond deal aimed at aiding Clayton County’s ailing hospital and special-tax funded projects has come under fire from a county commissioner who is questioning the selection process that enabled another commissioner’s employer to be considered for the lucrative deal.
Commissioners will meet Monday in a special-called session to deal with several resolutions involving putting Southern Regional Medical Center back on steady financial footing. As part of that effort, they must decide whether the bond sale will go to PNC Bank or Wells Fargo. Commissioner Michael Edmondson is a financial advisor for Wells Fargo. Commissioner Sonna Gregory has called for an independent review of the selection process.
Gregory filed the resolution this week. It is among six resolutions the commissioners will consider on Monday. The resolution needs three votes to pass.
“We’re talking about $75 million in bonds potentially going to an employer of one of the commission members. That might be something that raises some questions,” Gregory said Friday. “… Seeing how this board has championed itself as a board of transparency and ethical standards, it’s our responsibility to make sure we’re upholding the same standards we’re setting for employees, citizens boards and everyone else.”
Efforts to reach Edmondson Thursday and Friday were unsuccessful.
The company that wins the Clayton County loan will earn potentially millions of dollars off the interest. They will not get a fee for handling the bond deal, according to Ramona Thurman, the county’s chief financial officer. Thurman also noted that Wells Fargo is the county’s bank of record.
Thurman told The Atlanta Journal-Constitution Friday that the county in June solicited metro Atlanta banks for interest rate quotes for the bonds. Five banks responded.
Wells Fargo had the lowest rates followed by PNC Bank, Thurman said.
The bond sale is part of an aid-package approved by Clayton voters in May to help the financially-struggling Southern Regional Medical Center. Voters approved extending a 1-cent Special Purpose Local Option Sales Tax over six years, beginning in 2015 to pay for a variety of projects, including rescuing the hospital. Southern Regional Medical Center needs the money raised from the bond sale to address financial problems created by cuts in federal and state funding and rising costs tied to caring for people who can’t pay.
The county agreed to a plan that calls for buying developed property from the Hospital Authority and then leasing it back to the authority. The $75 million bond deal will be used to acquire hospital property as well as fund other projects within the county. The proceeds from selling hospital property to the county will enable the hospital to pay some of its debt.
Commission chairman Jeff Turner said he thinks the bond selection process has been above-board. Commissioners were not involved in the selection process, Turner said.
“We’re hoping to make a decision on the bond issue so we can move forward,” Turner said. “It has dire repercussions for the hospital. If we’re not able to do (the bond sale) then the hospital is going to be in a bad position.”
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