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Tanner Health System seeks county backing for up to $250 million of bonds to fund two hospital expansions
Summary
Tanner Health System asked Carroll County to authorize contingent backing for tax‑exempt bonds (not to exceed about $250 million) to finance hospital additions in Carrollton and Villa Rica and to refinance prior debt if market conditions permit.
Lloyd Howard, president and CEO of Tanner Health System, and Gabe Agan of Raymond James presented a financing request asking Carroll County to authorize intergovernmental support for tax‑exempt bonds to finance major Tanner capital projects and possible refunding of prior issues.
Howard described planned investments: a three‑story Carrollton tower adding 50 inpatient beds (about 95,000 square feet; roughly $75 million estimated), and a four‑story Villa Rica facility primarily focused on women's services with med‑surg and same‑day surgery capacity (roughly $80 million and 27 additional same‑day surgery beds). He said Tanner serves a broad regional population across multiple Georgia and Alabama counties and cited the system's clinical volumes and economic impact.
Gabe Agan, Tanner's financing advisor, walked through historical and pro‑forma financial ratios and debt service coverage measures, and said market timing would determine the exact refunding and new‑money split. Agan said the structure proposed would pledge Tanner revenues first and the county's participation would be a contingent backstop; he stressed Tanner's long financial track record and cited projected coverage ratios that supported market access.
Agan said a not‑to‑exceed aggregate bond amount had been described in documents as approximately $250 million, with net new money expected to be about $140 million depending on refunding decisions and interest rates. He noted Georgia statutory limits on county net indebtedness do not treat this arrangement the same as direct county debt and described it as an intergovernmental contract that investors and rating agencies analyze as a contingent obligation.
County attorney Stacy Blackman briefed commissioners on the TEFRA (federal tax‑exempt financing) public hearing requirement; staff held the required public hearing and no members of the public attended. Blackman said she would work with counsel to refine resolution language to reflect the county's intent and to ensure the not‑to‑exceed figure and indigent care language are stated clearly. Commissioners and Tanner representatives discussed timing: Agan said the plan was to price in late February (proposed market date Feb. 26 with pricing Feb. 27) and close roughly a month later, subject to market conditions.
Several commissioners said they support the partnership but sought language clarifications in the intergovernmental contract and reassurance from county finance staff that the county's contingent backing would not harm the county's borrowing capacity. Commissioner comments reflected interest in Tanner's long‑term clinical and economic role in Carroll County; one commissioner asked how long the new beds would accommodate growth (Tanner projected through the late 2020s for the Carrollton addition). Blackman and Agan said they would return the cleaned‑up documents for formal action; staff asked to place the TEFRA/contract resolution on the consent agenda with the revised language.
