SCH seeks out additional utilities for USDA loan

The Stephens County Hospital is now looking at other utility companies to secure a loan of up to $2-million.

During the recent Toccoa City Commission work session, Stephens County Hospital’s Chief Operating Officer Kathy Whitmire came before the commission to request for the city to apply for the USDA Rural Economic Development Grant and Loan.

Toccoa’s Vice Mayor Gail Fry asked who would be responsible for the loan payment if the hospital is unable to make it.

“What if the hospital can’t pay it, the city then has to pay it, right? Is the cashflow at the hospital better than it was,” Fry asked?

Whitmire explained that the hospital’s cash flow has become better, with additional funds anticipated later this month.

Commissioner Terry Carter was concerned about the verbiage regarding a $300,000 grant.

When it talks about the grant, the last sentence says ‘when the revolving loan fund is terminated the grant is repaid to the agency,’ so what does that mean if you don’t have to give the $300,000 back, what is that saying” Carter asked.

Carter continued by saying “the way i’m interpreting that is like we apply for the grant, we get the $300,000 and then loan it to whoever; when they pay us back and we have the $300,000 back from them then we give it back to the agency…but at the end of the day it goes back [to USDA]. It isn’t an actual grant then.”

Whitmire said that the grant would not need to be paid back as long as the city is using the funds as a revolving loan for economic development.

Carter asked about the securities the hospital would be pledging for the $2-million loan, which Whitmire said the hospital would pledge CDs, cash and property.

City Manager Billy Morse told WNEG News that before the city can apply they must submit a letter to the government.

“Before we can even be eligible for this money, we’ve got to ask the federal government ‘Hey, can Toccoa be considered as a rural utility,’ to even apply,” Morse said.

Morse added that the city is concerned about being responsible for paying the $2-million loan back, if something happened to the hospital where they were unable to make the scheduled payments.

“There’s a pot of money that the federal government has to help rural economic development, and the hospital wants to take advantage of that,” Morse said. “To get the money to the community a rural utility has to be the applicant and has to apply and so we (city of Toccoa) would get the money, there’s a piece that we (city of Toccoa) could use and there’s a piece that the hospital can use. But the hospital’s portion is a loan — it’s got to be paid back. I think the commission is a little concerned about, ’cause it’s our debt, I mean if something happens to the hospital that’s 2-million bucks that the city has got to pay back.”

Whitmire told WNEG News on Tuesday that the hospital has decided to look at other utility companies to secure the loan.