Sallisaw City Commissioners, concerned about Sequoyah Memorial Hospital’s proposal to refinance the hospital’s $2.5 million debt, tabled a decision on the refinance at their meeting Monday and asked to see the hospital’s financials.
The hospital trust authority, working with Arvest Bank, is asking for approval of a $3.5 million loan to refinance the debt, to increase cash flow and for emergencies.
Ward 2 Commissioner Jim Hudgens questioned the proposal. He asked what the hospital’s cash flow was at the present time.
Mark Massey, the hospital’s chief financial officer, told the commissioners that the hospital has a positive cash flow of about $150,000 a month and has been operating in a positive cash flow for the last six months. That cash flow includes the approximate $50,000 to $60,000 the hospital gets on a monthly basis from a half-cent sales tax.
Hospital Administrator Debbie Knoke told the commissioners the hospital has worked diligently to cut costs and has done so. She said the hospital has cut expenses by over $150,000 a month by cross training and job training, by maintaining the facility and surgeries, by evaluating all jobs and functions.
She said, “Revenue is up about 5 percent” and “we are sustainable and successful.”
Massey added the hospital has also improved reimbursements from Medicaid and Medicare.
Massey told the commissioners that refinancing the loan would lower the current interest rate by 1.5 to 2 percent.
Hudgens said he was concerned about mortgaging the property, as security for the loan. Inventory and cash received may also be used as security. He asked if the hospital should fail how would the half-cent tax continue to pay off a loan for a property not owned any more.
The commissioners tabled a decision on the request until they could review the hospital’s last audit and financials.
All agreed that keeping the hospital operating is important for the community and that many small rural hospitals are being forced to close for financial reasons.
Keith Miller, building development director, reported to the commissioners that the new animal shelter facility is being completed by city employees. He said the 30 foot by 100 foot building will be insulated to R22 and “Will be easy to heat and cool.” Donations from local businesses are helping with the costs, he added.
The city has set aside $60,000 for construction of the new building, and $34,957 of that has been spent, leaving a balance of $25,043 with more construction to come. City crews were to begin installing the electric on Tuesday.
The commissioners also tabled a decision on the updated fines and costs schedule to equal state statutes, as requested by Police Chief Terry Franklin. Franklin also requested a $15 technical fee be added to the schedule to help pay for the technology required in police work today. The commissioners wished to review the update and tabled a decision until April’s meeting.
Sally Maxwell, Senior News Director
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