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SALEM -- A public hearing is set for 6:45 p.m. April 19 in council chambers regarding new financing bonds being sought by Salem Regional Medical Center, in part to help pay for a new $45 million facility in Columbiana.
Described as a non-provider based surgical outpatient pavilion, the new facility located near Firestone Farms on state Route 14 will include surgical, endoscopy, imaging, MRI and CT services, along with a non-chemo infusion center.
SRMC President/CEO Dr. Anita Hackstedde talked about the project Tuesday with the Finance Committee of city council, explaining what's planned and the need for new bonds not to exceed $65 million. The plan is to refinance the existing bonds used to construct the SRMC patient bed tower and roll them into new bonds that will include money to partially finance the new construction project.
Based on the recommendation of the Finance Committee, city council approved an ordinance indicating intent to issue the hospital facilities revenue refunding and improvement bonds.
The city's longtime bond counsel, Amanda Gordon, said the city is merely acting as a conduit for the hospital to secure the funds. The city is in no way obligated and there's no cost to the city. It's not the city's money.
The actual issuance of the bonds will come before council next month after the public hearing. Gordon said the ordinance Tuesday was just a first step to indicate it's coming.
The bonds will consist of $39 million to refinance the old bonds and an additional $21 million toward the new project. The hospital will cover the rest of the new project with its own funds, including the cost of the surgical center.
Hackstedde said an outpatient facility such as this can charge lower costs for services than what those same services cost if provided in a hospital setting. She indicated the hospital is losing patients who are being told by their insurance companies to go to outpatient facilities for services. With this facility, she said the goal is to get those patients back and have insurance companies recommend the facility.
"The hope is to attract more volume," she said.
The idea is also to lower costs and improve access to health care.
Councilman Andrew Null, who chairs the Finance Committee, questioned why the hospital chose to go through Salem for the bonds since the project is being built in Columbiana. It was explained that this was the most cost effective route for the hospital to be able to refinance the current bonds, which were used on a project in Salem, and finance the new project. Separate bonds for each would have been more costly.
Hackstedde explained the new facility will serve not just Columbiana, but people from the entire region, including Salem. She didn't see how there would be any negative impact to the city of Salem. She stressed that the hospital is taking all the risk for the bonds.
Employees at the new facility will pay income taxes to Columbiana. City Service/Safety Director Joe Cappuzzello asked if Salem was ever considered as a site for the new project, but Hackstedde said one of their goals is to reach beyond their walls and area. She said the project ultimately keeps the hospital strong.
The hospital already broke ground on the project, with construction expected to be complete by the spring of 2023.
In other business, Councilwoman Cyndi Baronzzi Dickey announced that Gordon said she'll be available to hold an informational session on bonds at 6 p.m. April 19.
Council members agreed to go back to meeting twice a month, on the first and third Tuesday, making the next council meeting 7 p.m. April 5.
The Economic Development Committee will meet at 6 p.m. March 22 for a Sustainable Opportunity Development Center update.
The Public Services Committee will meet at 7 p.m. March 22 regarding a NatureWorks grant for the parks department.
mgreier@salemnews.net