The Hall County Board of Commissioners voted Thursday night to pledge up to $200 million in bond support for Northeast Georgia Health System's future hospital in South Hall.
The move, an increase from an earlier commitment of $100 million, provides a safety net for the hospital if it cannot pay debts on construction of the hospital.
The increased support will help hospital officials get a lower interest rate on construction loans.
That translates to about $17 million to $19 million in savings over the 33-year life of the debt, said Tony Herdener, chief financial officer for Northeast Georgia Medical Center.
"And that money, since you all are pretty much not-for-profit, is reinvested in the community, right?" asked Commissioner Craig Lutz, whose district includes the area where the hospital will be built.
"It needs to stay within Hall County, within the organization," Herdener said. "It stays on the balance sheet, to support the debt, to support the growth of the organization."
A couple of residents expressed some concerns about the financial pledge.
"I really would advise you all to have a special public meeting ... and let the hospital financial people come and let us ask questions and understand what we're talking about," said John Rogers.
"We don't need for this thing to get in trouble in South Hall or in Gainesville."
Phyllis Mercer said she believes "there are some clear advantages for the hospital, but there are no stated advantages for the county."
"The county doesn't even get revenue from the sewage of this facility, as that revenue will go to the city of Braselton, a right that was negotiated away," she said.
Commissioner Ashley Bell said he understands the questions and concerns of residents.
"It's key the public understands that many of us on this commission have had very similar questions from the outset of this process," he said.
"This (bond support) does not take us to our debt limit and looking at (the) books, this hospital has been well-run for a while," Bell said. "The only reason I will vote for this is I am certain that (the hospital) will continue to run well, and the bottom line and reserves are solid."
Commission Chairman Tom Oliver said a "contingency plan" has been developed in regards to the bond support.
"And about the hospital not being on Hall County sewer, they were too cheap for us — we took the medical buildings around them," he said.
Herdener has said it is unlikely that money will ever be needed.
"It's a self-supporting debt, so as the health system generates cash flow, that would be the first line of payment, and there's reserves on the balance sheet - that would be next," he said.
"And then there's a designated, trustee-held debt-service reserve fund that would be a year's worth of debt service. So there's plenty of moats, if you will, around the castle to protect the bondholders."
The South Hall hospital will be the first new hospital in the state in some 25 years, said Northeast Georgia Medical Center's Chief Executive Officer Carol Burrell.
"All eyes are on our community," she said.
Construction on the hospital off Ga. 347 is supposed to begin sometime next year.
Plans will include an intensive care unit, emergency room and general surgery, but other services have not been determined.
Once it is open, the hospital is expected to employ 500 people, Burrell said, as well as 50 physicians and 240 support staff for the physicians.