The Memorial Hospital Board of Trustees approved the hiring of a mortgage banker to manage financing for a new hospital Wednesday night at its monthly meeting.
TMH will pay InnoVative Capital LLC from New York $20,000 up front and the firm will help TMH secure a $15 million loan through the Housing and Urban Development Committee (HUD).
This loan will be used to fund the construction of a new hospital in Craig.
The board was considering three different firms to assist in the financing, but Wednesday night during the finance committee report, board member Ron Danner recommended that InnoVative be hired.
Hospital Administrator Randy Phelps recently explained the reason for hiring an outside firm.
In order to get approved for financing HUD must in a sense "co-sign" the hospital's proposal, he said.
"We structure a proposal based on our debt service capacity," he said. "We describe the project to federal officials and the federal government provides mortgage insurance."
InnoVative Capital LLC will make sure everything in the hospital's plans fits HUD requirements.
After the $20,000 down payment to get InnoVative to assist in securing a loan, the company will be paid a percentage of what the total loan ends up being.
"Basically we're obligated to pay a percentage against that 15 million," Phelps said Wednesday night.
If the total money borrowed ends up being within the $15 million range, which is the goal of hospital administrators, Innovative
will receive about $417,000, Phelps said.
But if a loan is not secured and a project management firm cannot be found to build a suitable hospital for $15 million, TMH is not required to pay Innovative any more than the initial $20,000.
"There's no relationship that ties us to any number," Danner said. "The only risk we have is the $20,000. Fifteen million is a discussion point to get company bids."
So far the hospital has received bids from four companies to manage the construction aspect of a new hospital, Phelps said.
Board members gave Phelps permission to schedule meetings with each firm so the board can sit and interview each one.
"We need to get them here so you can decide if this is the best firm for us," Phelps said. "It's going to be difficult to make a final decision."
Each firm is making similar proposals, Phelps said.
But now that a firm has been hired to assist in financing a project manager must be hired soon, Phelps said.
"The project manager and the mortgage banker work in parallel," he said.
Next month Phelps said he will present the board with an updated timeline on where the hospital is and where it wants to be in coming months in its plans to build a new hospital.
In other business Wednesday night the board of trustees:
Heard a monthly key result area report by Community Relations Director Pam Thompson.
Heard a presentation on the new transition care program by Chief Nursing Officer Jackie Wilcoxson. The new program is scheduled to start July 1.
Approved an agreement with Northwest Health Specialists Clinic for provision of MRI services.
Heard a report on hospital foundation activities.
Approved a resolution in support of Referendum "B" concerning permitting public/private healthcare partnerships.