Hillsboro City Admini?strator Larry Paine said the proposed $1.5 million development agreement with HMC/CAH Con?solidated Inc. is unusual, but the document has been developed with the help of the city?s bond counsel.
?The hospital has asked us to help them in the construction of the new building,? Paine said. ?We are going to put the site improvements in play?basically the water line, the electric, sewer line, driveways, parking lots, grading?as part of that initial phase.?
?We normally are responsible to the property line?that would be Industrial Road,? Paine said. ?So we?ll be doing that on the site, getting all of that stuff into play.?
The agreement provides that the city?s Public Build?ing Commission will authorize a bond issue that will pay for site improvements in the early stages of the project.
?In exchange for the issuance of bonds, the hospital will pay the cost of those bonds over the period of time they repay their primary lender, the Bank of Hays,? he said.
Paine said it was important to protect the city?s economic well-being while the agreement is in place.
He said the PBC has about $500,000 in its hospital fund, which is supported primarily by rent payments from Hills?boro Community Hospital and Salem Home?the two entities currently occupying the facility.
In addition, the city has been transferring 5 mills to that fund since the creation of the initial bond issue that provided financial support to Salem Hospital, according to Paine.
?What we?re doing is trying to develop enough of a safety net for taxpayers that we can protect our mill levy if something were to go sour,? he said.
?Bank of Hays is in the first position with their mortgage?we would be second. That in itself makes it technically risky. But we don?t expect any problems in that regard.?
Paine said he recognizes that some residents may be leery about the city?s financial agreement with HMC/CAH, given past promises and circumstances.
?Because of the earlier (HMC/CAH) bankruptcy, the antenna are up, so we?re trying to do our best to be careful what we?re committing to,? he said.
?The big picture would be knowing that we?ve got sources of revenue to come in that would pay for that without having to tap a general bond levy.?
Paine said the city would not be making any other financial concessions for the for-profit hospital in light of the partnership agreement.
?What we?ve agreed upon is that there is no other tax abatement involved in this project,? he said. ?At this point, they expect to pay for the full load on their property tax bills. We don?t have any other incentives, so to speak, there.?
Go to hillsborofreepress.com Tuesday evening to find out the results of the Aug. 4 Hillsboro City Council meeting.