Hospital leaders ask council to back $770,000 bridge loan and $5.6M bond to keep local facility open

Hospital representatives asked the city council at a workshop to signal support for a short-term $770,000 loan from a local energy partner and to consider a $5.6 million bond referendum that would let the city buy the hospital buildings while the hospital continues to operate the facility under a lease.

The request came during a presentation in which Brent (presenter) described efforts to stabilize revenues — including new billing software, collections work and converting short-term debt into long-term financing — and introduced Russ Snyder, executive vice president and chief financial officer, as part of the hospital leadership team. Brent said the $770,000 would act as bridge funding until voters consider a bond in November and the city could complete a longer-term financing solution.

Brent said the hospital had presented a loan package to several community banks that declined and then pursued a short-term loan from a local energy partner. "We met with Heartland Energy," Brent said, later adding that the transcript also referenced the name "Harlan Energy" in relation to the same lender. He said Pioneer Bank would release Medicare accounts receivable as collateral to cover the loan, and that the lender asked the city for a resolution showing support and a contingency agreement to co-sign only if the hospital defaulted. "This doesn't cost the city anything unless we fail," Brent said, "which we are not going to fail 'cause that's not a choice." The presenters stressed that any city obligation would be contingent on review and final approval of loan documents.

On the broader financing plan, Brent outlined what he called a three-legged approach: (1) hire a finance director familiar with critical-care billing to stop revenue leakage; (2) address short-term liquidity (the $770,000 bridge followed by a bond to cover outstanding liabilities); and (3) grow the hospital foundation to build reserves that smooth cash flow. He said the bond under discussion would be roughly $5.6 million and would be structured so the city owns the buildings while the hospital continues operating services similar to how ambulance rigs are owned and operated.

Support for the lender was voiced by an attendee who identified themselves as board president of the light and power board, who described the utility as a stable, long-term partner. Council members pressed for details about ballot timing, tax implications and lease terms. A council member asked whether the bond would be on the November ballot; presenters answered yes, and they said the $5.6 million figure reflects property valuation of the buildings. Presenters also said county deadlines for bond filing give them until August to decide whether to move forward.

Presenters and council members agreed more legal and financial work is required before the city commits to any co-signing or the bond structure. Brent said he and staff would work with lawyers and banks on loan paperwork and lease arrangements and asked the council to indicate whether it wants staff to proceed with further research and public communication. Officials noted a public information campaign will likely be necessary to explain the proposed bond and how it differs from previous referendums.

No formal resolution or vote on the loan or bond was recorded in the workshop. The only formal action in the transcript was a procedural motion to adjourn the workshop, which passed.

The workshop closed after other routine facilities and public-works updates. The presenters requested the council's guidance on whether to proceed with drafting a resolution and pursuing the bond timeline so the hospital can secure short-term funding and pursue a longer-term ownership and financing approach.

What officials said next: Brent asked council members to review loan documents before any city obligation and to indicate whether the council wants staff to proceed with the bond research and public outreach. The presenters said they would return with details after legal review and lender negotiations.