|Ocala, FL -
March 27, 2012|
Published in the Ocala Star Banner Tuesday, March 27, 2012 at 5:44 p.m.
Any new tax that could be created to prop up Munroe Regional Medical Center probably wouldn't raise enough money to stabilize the hospital's drooping finances, except one, Munroe administrators say.
Only a general obligation bond tax would generate enough money to keep the hospital out of the red and out of the hands of private hospital companies vying to buy or lease the publicly owned Munroe from the Marion County Hospital District.
All the other tax options that the Hospital District trustees reviewed during a meeting Monday night either wouldn't raise enough money to keep the hospital out of the red or are too restrictive in how the money could be used,
The only tax option that appears to offer hospital trustees enough cash and discretion to strengthen Munroe's bottom line is a 1 mill property tax sufficient to repay a bond loan in 10 years.
A portion of the bonds would be used to pay off a portion of the hospital's current $100 million debt, and the rest would be used to pay for annual improvements and maintenance of the 421-bed hospital. The bond also would free up hospital money to continue paying off its current debt, if trustees chose that route.
Other taxing options, which included infrastructure and indigent sales taxes, still would leave the hospital several million dollars a year short of what it needs, hospital chief financial officer Rich Mutarelli told trustees.
The hospital needs about $20 million annually for infrastructure improvements and equipment replacement.
Under the bond plan, Mutarelli said the hospital would see its revenues surpass its expenditures by 2014, keeping it in the financial black for some years to come.
One mill in taxes equals $1.00 per $1,000 of property value. Owners of a $100,000 home, claiming a $50,000 homestead exemption, would pay $50 annually.
Without new cash, Mutarelli told trustees, the hospital's expenses would begin losing between $5 million and $10 million a year beginning in 2013. In order to make ends meet, trustees would have to use the hospital's reserves and income from investments to pay its bills.
Driving the search for money is an earlier hospital study that showed Munroe would need $150 million in capital improvements to remain competitive. That's in addition to the annual $20 million for facility improvements and equipment. Some of Munroe's debt is due to the not-for-profit, public hospital having a higher than typical number of indigent, bad debt and Medicaid/Medicare cases.
While the hospital trustees are considering asking for a tax to support Munroe, they also are considering selling or leasing the medical center to a private company. A number of companies have expressed interest.
The four healthcare companies currently being reviewed by trustees are each offering to invest $150 million in capital improvements as part of a lease. They also are offering between $50 million and $75 million over the next five years in other infrastructure improvements and between $119.2 million and $325 million to lease or buy the hospital. Trustees would use that money to pay for other healthcare-related issues in the community.
Once a private healthcare company took over the facility, it also would pay $1 million annually in property taxes and another $500,000 each year in sales taxes, something Munroe does not do as a public hospital.
Dyer Michell, former Munroe president, believes the bond plan would be best for the hospital.
Michell, who attended Monday's meeting, said there were too many unknowns in the country's health care future to decide now about a lease or sale.
Michell said that money from a bond sale would give the hospital time to wait and see how health care changes affect the facility.
"Give yourself as much time as you need," Michell said, adding later, "Go to extremes to find a way to keep what you've achieved."
Michell said the trustees could always later revisit the sale or lease option.
But hospital trustee Joe Hanratty said money from a bond sale would only be a temporary stopgap and does nothing to generate the $150 million in capital improvements the hospital needs.
"If anything, it's just a BandAid on the problem," said, adding that when the bond money is depleted the hospital would again need more money.
Trustee Larry Strack said the bond is too much of a financial burden and he doesn't want it to go to referendum.
"It's like putting a second mortgage on every property owner," he said of the bond tax, adding he supported a lease instead.
"If we wait another five years, is there going to be anyone standing at the doors ... wating to lease us then?" he asked.
New exteriors of Munroe Regional Medical Center. Munroe Regional Medical Center is shown on Thursday March 1, 2012. MRMC is Marion County's public hospital. (Alan Youngblood/Ocala Star-Banner) 2012
Buy Photo Alan Youngblood/Ocala Star-Banner