Resolution for Hospital Bonds Approved at Committee | News, Sports, Jobs
A resolution has been approved by the Washington County Commission regarding the issuance and sale of up to $300 million in hospital facility revenue bonds for Memorial Health Systems.
Scott Silvestri, vice president and chief financial officer of Memorial Health System, said $100 million will be used in the Athens market.
“Athens is an important source for us and complements our Belpre campus very well,” said Silvestri, adding that the residue will be used to refinance their 2012 bonds.
“We are enjoying some repayment of previous capital expenditures and refinancing other debt,” he said.
Silvestri said it will add about 100 jobs in Athens County and another 250 in Washington County, with the expansion of the Belpre campus.
“The other thing this bond issue will do is line us up for a center for women and children on the Belpre campus,” he said.
Commission Chairman Charlie Schilling said he was concerned last week when he heard rumors about how the requirement would affect the county’s bond rating and that it would cost the county money .
“At the beginning, we made it clear that we needed to know how this was going to affect our bond rating,” he said. “The hospital attorney and our attorney said it would not affect our bond rating.”
He said it would cost taxpayers nothing and bring in revenue. He said he also verified that if the hospital had financial problems in the future after the bonds were spent, it still would not affect county residents.
Mike Melliere of the law firm Ice Miller, attorney for the Memorial Health System, said the county will serve as “conduit transmitter”, which is required by federal tax law for the hospital to benefit from tax and bond financing.
The bonds are also exempt from federal and Ohio income taxes, which will save the hospital millions of dollars, Schilling said.
Melliere said the bond repeatedly indicated that there were limited special obligations on the part of the county, but payable only by the hospital.
Commissioner Kevin Ritter asked who the bonds would be sold to, and Melliere said it would be institutions such as mutual funds, tax-exempt funds, Eaton Vance, Vanguard and some of the larger fund management companies.
Schilling said the commissioners ultimately voted to approve Washington County as the intermediary for the bonds because the hospital will use the bonds to provide more services and facilities to Washington County residents.
He said there were six main reasons he voted yes:
¯ This will not place a liability on the taxpayers of Washington County. The county has been a conduit for bonds in the past with no tax liability for residents.
¯ This will not affect the county’s bond rating.
¯ This will provide revenue to the county general fund as the fees are paid to the conduit.
¯ There is no future risk for the county.
¯ Marietta Memorial Hospital has been a good partner and they are the largest employer in the county.
“I think it’s important to work with them if it ultimately helps our residents whenever they talk about health and wellness,” Schilling said.
¯ This type of cooperation and partnership contributes to job creation.
Michele Newbanks can be reached at