$5.2 million bond issued to keep Habersham Medical Center’s doors open

April 9, 2020
1 min read

DEMOREST — Rural hospitals in Georgia, and across America, have been struggling to survive for years due to declining net revenues amid an increase in the cost of supplies, equipment, regulatory requirements and staffing. Eight rural hospitals in Georgia have closed with fourteen more at high risk, including Habersham Medical Center.

“The COVID-19 pandemic is now further compromising our viability because, in order to protect the public and our staff, we must limit routine testing and elective ambulatory services, which are a significant portion of our normal revenue,” said Lynn Boggs, Habersham Medical Center’s chief executive officer. “Additionally, we must remain vigilant in screening and isolating patients with symptoms, which requires additional staff and protective gear. We are fortunate that COVID-19 positive cases have been minimal in Habersham county to date, but that is likely to change as this virus spreads.”

According to the Georgia Department of Public Health, Habersham County has only had seven confirmed cases of COVID-19.

Habersham Medical Center generates $86 million in direct and indirect economic impact to Habersham County’s economy every year per the Georgia Economic Impact Study. Loss of the economic engine that is Habersham Medical would have a devastating and long-term negative impact on this community.

In response to the threat of losing the medical center, the Habersham County Hospital Authority has issued revenue anticipation bonds Series 2020 with the support of the Habersham County Board of Commissioners to ensure the continued operations of the medical center until it can be sold to a larger health care system or reorganize into a Critical Access Hospital.

This bond will give the Hospital Authority additional time to find other solutions for maintaining the operations of Habersham Medical Center, in addition to giving state legislators additional time to find other solutions for its many rural hospitals in distress.

Habersham Medical Center officials and the Habersham Board of Commissioners say they remain optimistic that Northeast Georgia Health Systems will acquire Habersham Medical Center within five years as outlined in the medical center’s May 20, 2019 Letter of Intent.

The Habersham County Board of Commissioners will provide supplemental operating funds to the medical center at a point and time when it is necessary to ensure the continued operation of the county’s local hospital.

The Series 2020 private placement bond will secure Habersham County’s hospital through the tax authorized by state law as the security for the debt obligation under the contract. The anticipated par amount of the bond obligation is about $5.2 million. The note will be repaid over seven years by Habersham County. This obligation will only be drawn down as necessary by the Hospital Authority to maintain critical operations of the medical center during these extraordinary times. The new bond will replace the previously approved $1 million line of credit.

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