South Routt Medical Center gets line of credit, faces rush to ballot question
January 6, 2014
Oak Creek — Chuck Wisecup was learning on the fly during the South Routt Medical Center's board meeting Monday night.
The first business of the meeting was to swear in Wisecup as the board's fifth member, and he'd hardly sat down before being elected president of the board, fulfilling the mumbled requests of the crowd of about 15 in attendance.
As much as the meeting involved Wisecup unraveling why the board does things certain ways and which staff members do what jobs, it also set the stage for the center's next few months of activity.
Wisecup was on the advisory committee that was formed because of public concerns about South Routt Medical Center's financial health. He'd been on the board before and was appointed to fill the empty seat during a December meeting.
The advisory committee's earlier report had cited the center's ongoing expansion project as a factor in its financial concerns and had suggested short- and long-term steps to right those issues.
Seeking a line of credit was among those suggestions, and the board passed a resolution to that end in December.
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On Monday night, the board and members of the advisory committee discussed a letter from First National Bank of the Rockies agreeing to a six-month $200,000 line of credit, using the center's building at 300 S. Main St. in Oak Creek as security.
The line of credit will help shore up the center's balance sheets until tax revenue is remitted.
The terms could be extended another six months, according to advisory committee member Mary Alice Page-Allen, but if the credit was needed for a longer period than that, the bank would need legal assurances that the agreement complied with Colorado's Taxpayer Bill of Rights.
But even a 12-month line of credit will not be enough, Page-Allen said, to fix the center's financial situation.
The proposal, she said, is to go to the voters in May and ask them to approve a mortgage on the center's building. The plan the committee developed used a seven-year note.
A mortgage wouldn't increase the health district's mill levy or patient fees, she said, but would allow the center’s board more time to right the ship.
The expansion project at the center’s Oak Creek location has drawn down reserves, and those must be replenished to comply with state regulations.
As the resolution to seek the line of credit was approved at a prior meeting, Wisecup, acting as president of the board, and Steve Strickler, who was elected vice president, are authorized to sign the agreement.
That leaves the board with some tight deadlines to meet if it intends to be ready for a mortgage-related ballot question in May.
Advisory committee member David Bonfiglio said that the public's help will be needed to educate health district residents about the ballot issue.
"We need people out there in the community who know the ins and outs of what this is," he said.