St. Clair County and the Health Care Authority are still tossing ideas back and forth with St. Vincent’s Hospital and Ascension Health trying to come to terms that would allow for a new hospital in the Pell City area.“We’re still working on a non-binding agreement that would outline each entity’s responsibilities,” County Commission chairman Stan Batemon said. “In the latest version of the agreement, a lot of things have changed, especially the financing.”
Batemon said the latest version of the agreement, which the Health Care Authority has not voted on yet, would have the Health Care Authority issuing long-term bonds in the amount of $8 million and short-term bonds in the amount of $7 million.
The proceeds from the sale of the authority’s assets would pay the short-term bonds and an annual lease payment from St. Vincent’s to the authority would pay the long-term bond off in 15 years.
At the end of the 15-year bond payment period, the Health Care Authority would be granted a 10 percent partnership in the hospital with payments to the authority to be no less than $200,000 annually.
At the last Health Care Authority meeting, members discussed aspects of the newest proposed agreement including the duration of the hospital lease.
A 30-year lease is desirable with St. Vincent’s making an estimated $825,000 annual lease payment for 15 years. St. Vincent’s would also have options to renegotiate the lease at the end of that term.
In the newest version of the agreement, the lease could not be assigned or changed without the approval of the Health Care Authority unless the hospital merges with another company.
“They’re willing to put $4 million in plus the lease payments to pay the $7 million bond,” Batemon said at the meeting. “This puts St. Vincent’s back in at about half the investment and gives the county and the authority more ownership. The agreement is getting better all the time.”
Health Care Authority chairman Lawrence Fields said the authority’s offers puts the ball back in St. Vincent’s court.
“The agreement still has to be tweaked,” Fields said. “But as it stands with this one, the authority would build and own the hospital from the beginning.”
Fields stressed that the newest version of the agreement has not been approved yet by the Health Care Authority.
Batemon said the county has pledged to run water and sewer to the site as well as site preparation and constructing the road into the hospital.
“The water and sewer are already run to Jeff State, so that’s not a big deal,” he said. “The road is going to be the most involved part, and we’ve already got engineers looking at more than one way to build it.”
Batemon said he expects the non-binding agreement to undergo even more changes before it reaches its final stage. He added that time is not so much a factor as it was when the first version of the agreement was approved.
“We were under the gun to approve a non-binding agreement so St. Vincent’s could apply to the Certificate of Need Board before the deadline of the their first meeting,” he said. “Since they missed that deadline, and the board doesn’t meet for another couple of months, we’re not under the gun this time.”
Batemon also said that St. Vincent’s is pleased with the way negotiations are progressing and is eager to build a new hospital in the county.
“They’ve done the studies that show more people in St. Clair County will use the new facility,” he said. “Due to economic and other conditions, they believe people will drive to Pell City to go to the hospital instead of driving all the way to Birmingham.
“The most important part of this is that we continue to provide indigent health care in the county, but with a new, viable hospital facility we’ll also be able to draw paying customers.”
Batemon also said the recent announcement that the Veteran’s Administration would be building a veteran’s nursing home in Pell City has also encouraged St. Vincent’s along in the process.
“Their new plan is to make the hospital a little larger with plenty of room for expansion,” he said.
