County OK’s $500K Loan to Hospital

WINNSBORO – At an emergency meeting Thursday evening, Fairfield County Council approved a $500,000 loan to Fairfield Memorial Hospital. The loan, approved by an emergency ordinance, will allow the hospital to meet its payroll obligations as well as satisfy a portion of the hospital’s approximately $3 million in outstanding debt to vendors.

At a meeting last week between the hospital’s Board of Directors and County Council, Tim Mitchell, the hospital’s Chief Financial Officer, said that if the hospital didn’t get its hands on at least $200,000 by March 6, payroll could not be met.

Councilman David Brown (District 7), who during last week’s joint meeting grilled hospital administrators about the financial future of the hospital and the progress being made on a deal to marry Fairfield Memorial to a larger facility in Richland County, had additional questions Thursday night.

“After our conversation last week, and knowing the necessity of this and knowing the situation we’re in, what do the next 12 months look like?” Brown asked.

Mike Williams, the hospital’s CEO, said Fairfield Memorial was weighing three options: partner with a larger hospital, lease the hospital to a private entity or downsize the existing facility to an urgent care center. Williams said that one month ago Fairfield Memorial contracted with Stroudwater Associates, a healthcare consulting firm with offices in Atlanta, to put together a proposal for a potential collaborative agreement with a larger hospital. Williams said the Stroudwater study was costing a total of $75,000, with Fairfield Memorial on the hook for $30,000. Fairfield Memorial’s potential partner and other private entities are footing the rest of the bill, Williams said.

Leasing the hospital to a private company, Williams said, could reduce if not eliminate the amount of charity care Fairfield Memorial currently provides to county patients, while downsizing the facility to an urgent care center would mean serious cases would have to be seen at other hospitals. The most desirable option, Williams said, was a collaborative agreement with a Richland County hospital.

“I hope we’re working on all three (options) simultaneously,” Council Chairman David Ferguson (District 5) said. “This is something we’re going to have to get real busy at real soon.”

The $500,000 loan is the third loan from the County to the hospital in as many years. The County fronted Fairfield Memorial $400,000 in March 2011. According the County’s most recent financial audit, that note became payable in April of 2011 in monthly installments of $13,333. During the 2013 fiscal year, the audit states, the County received no payments from the hospital.

“Due to management’s uncertainty as to the likelihood of collection, the County has maintained an allowance of $333,333 for the full amount outstanding at June 30, 2013,” the audit states. “The County plans to continue attempts to fully collect the note.”

Last January, just weeks after the County had advanced to Fairfield Memorial the final $245,000 of its annual $980,000 contribution, Interim County Administrator Milton Pope approved a loan of $50,000 to the hospital. That loan was also issued in order for the hospital to meet payroll obligations and was paid back a week later.

“We can’t keep throwing good money after bad money,” Vice Chairman Dwayne Perry (District 1) said Thursday. “The (hospital) Board has got to deal with it. We have to have some projections over the next six months and show new revenue and what the expenses are, or this $500,000 is going to be gone and we’re right back in the same place.”

Thursday’s emergency ordinance gives the hospital three years, with no interest, to repay the $500,000 loan.

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