TMH will reap $1.2 million in annual savings from refinance
February 21, 2017
Craig — The Memorial Hospital will reap approximately $1.2 million in annual savings after it closes on a $37.6 million loan refinance with the United States Department of Agriculture this month.
Though the savings won't ultimately find its way into taxpayers' pockets, it will bolster the hospital's operations and capital accounts, putting the county-funded hospital in better standing to improve or expand its offerings in coming years.
"What that will do in the long run is improve our financial position to allow us to consider doing things like renovating part of the hospital, building a new clinic, or adding new service lines or new providers," said TMH Vice President of Operations Jennifer Riley.
The refinance was initiated more than a year ago by TMH Board member Cathrine Blevins, with initial projections that the hospital could save $17.5 million during the 35-year term based on rates at the time.
The savings follows a year of losses, and tax revenues are projected to decline in 2017.
"We lost $1.4 million and change this last fiscal year, so it comes at a very good time," said TMH Chief Executive Officer Andy Daniels.
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The hospital currently holds a Housing and Urban Development, or HUD-backed loan with an interest rate of more than 8 percent. The new USDA loan, consisting of two notes, will give the hospital a blended effective rate in the low 3-percent range.
The refinance required some extra paperwork from Moffat County Commissioners, but effectively allows the hospital to revert back to a simpler legal structure that pre-dated the HUD loan.
The precise interest rate and total savings projections will be determined once the loan closes on Feb. 27.