Commission approves letter of support for hospital’s USDA loan application

Tim Walker
AMR Reporter

At the May 19 meeting of the Pocahontas County Commission, commissioners agreed to write a letter of support for Pocahontas Memorial Hospital as it seeks to obtain a $7.5 million loan from the U.S. Department of Agriculture (USDA).

Prior to the the vote, PMH CEO Mary Beth Barr explained to the commission that the loan would be used to expand the existing facility, adding 11,275 square feet to the existing 23,824 square feet of the present facility.

In her presentation, Barr explained that PMH is currently a designated Critical Access Hospital, a Level IV Trauma Center and offers 25 beds for inpatient care, as well as emergency and outpatient services. Since outpatient departments create 80 percent of the hospital’s revenue, and since there is no physical space available to expand outpatient services, in May 2019, the hospital board authorized PMH to spend up to $40,000 for a feasibility study regarding a USDA loan for the expansion. The positive results of that study were presented to the commission in January 2020. The study was done by the firm of Arnett-Carbis-and Toothman (ACT).

On March 3, the commission authorized PMH to proceed with the loan appli- cation with the understanding that, even if the loan application was approved by the USDA, the commission was under no obligation to agree to accept it.

On May 15, the USDA informed PMH that they ran the numbers and liked what they saw. They asked ACT to provide a few more details, but said that PMH could begin to contact banks about financing the construction phase. They also needed a letter of support from the commission.

Barr explained that the expansion would add a minor operating room, a pre-and-post-operation area, as well as expanded areas for other emergency and outpatient departments, the pharmacy, the IT department, Material Management and Dietary Department.

Barr told the commissioners that the USDA funding is available until July 31, 2020 with a current fixed interest rate of 2.375%.

The next steps include doing an environmental impact assessment; submitting approved Certificate of Need from the WV Healthcare Authority; choosing two or three banks for the construction loan; completing the actual application form; submitting the commission’s letter of support; and starting a capital fundraising campaign, with construction beginning before September. The September date is tied to a promised $1 million from a private donor.

Commissioner Walt Helmick said his concerns include the need for the commission to develop a viable structured collateral base – or money source – in case the hospital defaults and the commission has to pick up the loan. Greg Gibbs from Act said that, in a worst case, the hospital could be sold to another health provider to pay off all or most of the loan, but it would be unlikely to default on the loan. Helmick then said he had no problem with the commission sending a letter of support since this does not yet involve a commitment.

Commissioners David McLaughlin and Jesse Groseclose also voted to send the letter of support.

In other actions at the meeting, the commission:

• extended the extension of the Broadband Study Grant until June 30, 2021.

• authorized the County Clerk to hire Jaclyn Hollandsworth as a full-time Deputy Clerk effective June 1, 2020.

• agreed to submit a petition application to the Federal Communications Com- mission to grant an exception to allow both Direct TV and Dish Network to offer local West Virginia TV channels to county customers. They are working with the Greenbrier Valley Economic Development Corporation and Mike Holstine of the Green Bank Observatory on this.

• made routine year-end budget revisions and resolutions for various revenues and expenditures and for courthouse offices.
Some of those were needed because the reevenue from the Hotel Occupancy Tax was about $800,000 more this fiscal year than they had anticipated when they prepared the budget a year ago. They warned that next year the tax will likely be much reduced.

• observed the successful testing of the new voting machines for the June 9 primary election.

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