A resolution was approved by the Washington County Commission in regards to the issuance and sale of up to $300 million in hospital facilities revenue bonds for Memorial Health Systems.
Scott Silvestri, vice-president and chief financial officer for Memorial Health System, said $100 million will be used in the Athens market.
“Athens is a big feeder for us and complements our Belpre campus very well,” Silvestri said, adding the residual will be used to refinance their 2012 bonds.
“We’re taking advantage of some reimbursement of prior capital expenditures and refinancing some other debt,” he said.
Silvestri said this will add approximately 100 jobs in Athens County and another 250 in Washington County, with the expansion of the Belpre campus.
“The other thing this bond issuance will do is align us for a women’s and children’s center on the Belpre campus,” he said.
Commission President Charlie Schilling said he was concerned last week when he was told rumors about how the bond would affect the county’s bond rating and that it would cost the county money.
“In the beginning, we made clear that we have to know how this is going to affect our bond rating,” he said. “The counsel for the hospital and our counsel said this will not affect our bond rating.”
He said this will not cost the taxpayers anything and will bring in some revenue. He said he also verified that if the hospital has financial issues in the future after the bonds are spent, it still will not affect county residents.
Mike Melliere, with the Ice Miller law firm, counsel for Memorial Health System, said the county will serve as a “conduit issuer,” which is required by federal tax law for the hospital to take advantage of taxes and bond financing.
The bonds are also exempt from federal and Ohio income taxes, which will save the hospital millions of dollars, Schilling said.
Melliere said the bond stated several times that there are special limited obligations from the county, but payable solely from the hospital.
Commissioner Kevin Ritter asked who the bonds would be sold to, and Melliere said it would be institutions such as mutual funds, tax exempt funds, Eaton Vance, Vanguard and some of the bigger money management firms.
Schilling said the commissioners ultimately voted to approve Washington County to be a conduit for the bonds because the hospital will use the bonds to offer more services and facilities to Washington County residents.
He said there are six main reasons he voted yes:
¯ This won’t place a liability on Washington County taxpayers. The county has been a conduit for bonds in the past with no tax liability for residents.
¯ This won’t affect the county’s bond rating.
¯ This will provide revenue for the county general fund as fees are paid to the conduit.
¯ There is no future risk for the county.
¯ Marietta Memorial Hospital has been a good partner and they are the county’s largest employer.
“I believe it is important to work with them if it is ultimately going to help our residents whenever talking about health and welfare,” Schilling said.
¯ This type of cooperation and partnership helps create jobs.
Michele Newbanks can be reached at
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