Hospital gets panel’s blessing on bonding plan

September 23, 2008

Edward Husar

Blessing Hospital is hoping to use the city’s bonding authority to issue up to $22 million in tax-exempt bonds so it can refinance existing bonds and make capital improvements.

If the Quincy City Council approves the request, the hospital would use $17 million to refinance some 1999 bonds at today’s more attractive interest rates. Blessing also would spend $5 million to acquire a linear accelerator; renovate the inpatient rehab unit; and update the hospital’s heating, ventilation and air-conditioning systems.

The City Council’s Finance Committee endorsed the proposal Monday and will recommend that the council approve the request. The issue will be sent to the council next week.

The Finance Committee stipulated that Blessing be asked to pay a $10,000 service fee for using the city’s bonding authority. Blessing officials were agreeable to that provision.

Blessing was allowed to use the city’s bonding authority last year to refinance up to $60 million in bonds originally issued in 1993 and 1999. The city charged the hospital a $10,000 fee at that time, as well.

Tim Moore, chief accounting officer for Blessing Hospital, said the new refinancing proposal is unrelated to the old one.

Likewise, he said, the city will face “no risk whatsoever” in having to pay off the new bonds over a 20-year period.

“The city is simply the issuing authority,” Moore said. “But it doesn’t have any legal obligation as far as repayment.”

Blessing could have gone through the Illinois Health Facilities Authority to refinance its bonds, but the authority would have likely charged a higher service fee.

Moore said going through the city to finance “is simpler and more convenient,” and it also “keeps the money (service fee) in the community rather than paying it at the state level.”

A public hearing on the bond issuance proposal will be held Oct. 20 in conjunction with that night’s City Council meeting.