The Memorial Hospital in Craig considers new financing option
New strategy could save millions of dollars over the next several decades
June 29, 2016
Craig — The Memorial Hospital Board of Trustees is exploring the possibility of paying off its mortgage with the U.S. Department of Housing and Urban Development "by obtaining new financing through the (U.S. Department of Agriculture)," said Denise Arola, TMH's interim CFO.
The move would allow the hospital to receive lower interest rates.
The hospital's board of trustees, along with members of the Moffat County Board of Commissioners, met with USDA officials Wednesday to discuss the application. Members of the TMH Facilities Corporation also attended.
"Our original loan has an early payoff restriction, and we did not have the opportunity to refinance or pay off the loan prior to Jan. 1, 2017," Arola said.
Arola noted that the USDA loan interest rate would run at about 2.8 percent, compared to a rate of about 7.9 percent from HUD. Over the loan's 35-year lifespan, she said, the hospital could save up to $16 million.
"It would be a substantial saving over the life of the loan," said Board Chair Forrest Luke. "It gives us a chance to re-invest in some important work."
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Arola said the loan application would likely be submitted by early July, with a decision expected by the end of July.
The board of trustees also voted, in effect, to extend the hospital's contract with Quorum Health Resources, LLC, by 60 days. The contract was scheduled to expire on June 30.
For technical reasons, the board voted for a one-year extension with a "60-day out," which the board exercised.
David Faulkner, employed by QHR, will remain the interim CEO during this period. The board made the move primarily to create more time to continue its search for a long-term CEO, Luke said.