Catoosa County commissioners voted Tuesday night, Dec. 18, to endorse two resolutions that would benefit Erlanger at Hutcheson hospital in Fort Oglethorpe.

The first resolution approved a $25 million short-term note that helps pay down certain portions of the financially beleaguered hospital's $60 million in debt. This measure passed, with all commissioners in favor and commissioner Bobby Winter abstaining.

The second resolution would give equal representation to Catoosa County on the institution's board of directors. Currently Catoosa enjoys one less board member than neighboring Walker County. Representation sits at four members for Walker, three for Catoosa and two from Dade County. While one plan put forth set the new membership at five each for Walker and Catoosa while leaving Dade at two, the commissioners amended the resolution to set the membership totals between the larger two counties at whatever the three would decide on. This was at the behest of commission chair Keith Greene.

Approval for the short-term note would be contingent on the approval of the board membership resolution equalizing the members between Walker and Catoosa. It would also be contingent on Walker County approving a resolution to go forward with the financial plan and that a new procedure be put in place resolving that the counties would have more say in who their board appointees will be.

According to Walker County's sole commissioner, Bebe Heiskell, “I think this is a wise move. We need to liquidate our short-term debt and put it into long-term debt. Hutcheson is on a much better financial footing now and I am very pleased with their progress. Our counties have a responsibility to the hospital because our citizens own the hospital.”

As for the equal representation on the board, Heiskell said, “I think it's fair. In the beginning the board make-up was based on population, with Walker being much larger than Catoosa or Dade. Now, I believe Catoosa is within 5,000 (residents) of Walker and I think 4-4-1 distribution would be equitable. It is the closest to our current representation by population.”

According to information provided to the Catoosa board, the hospital currently has approximately $60 million in debt. That figure is broken up as follows: $24 million on a note held by Regions Bank in which the Hutcheson on the Parkway property is held in lien; $20 million on a line of credit to Erlanger hospital; $5 million in current debt to vendors; and, $12 million owed to the federal government for Medicare overpayments.

Catoosa County attorney Chad Young said, “The hospital currently needs $11 million in operating capital for new equipment. Hospital authorities are working diligently to get a handle on this debt.”

Young went on to point out that patient census is up and the immediate need is for short-term cash. The long-term plan is for a bond of $60 million at 3-4 percent interest. The short-term note could be later refinanced as part of the $60 million bond.

The two-year note would be at 1 percent interest if both Catoosa and Walker agree on the terms. According to Young, each county (Walker and Catoosa) would assume $125,000 worth of risk.

Young said, “The hospital would essentially have to close its doors to not make payments.”

The proposed $25 million note would be broken down as $12 million to pay off Medicare debt; $2 million to pay down vendor debt; and, $11 million for the purchase of needed new equipment.

Greene said, in voicing his approval of the resolution, “The hospital is in the black but will not make any further progress until we can get control of this debt.”