OHH polls community leaders on new hospital

Olney Hamilton Hospital hosted a luncheon for local business and community leaders last week to gauge support for a $33-million bond issue to fund a new hospital ahead of the Nov. 7 election. The hospital is nationally recognized as a top performing U.S. hospital as well as the oldest continuously operating rural hospital in Texas.

The OHH board voted unanimously to use the new tax revenue from local wind farms and an incoming hydrogen plant to pay down the proposed bonds. The board determined it would cost more to update the 1964-era building to accommodate new outpatient-centered business, as well as new operating and procedure rooms, than to start from scratch.

OHH administrator Mike Huff and OHH Board chair- man Dale Lovett took questions from the lunchtime crowd in an effort to build community support for the proposed hospital, which, if approved, will be built across Hamilton Street from the existing facility.

Although OHH’s plan is to use tax revenue from local wind farms and the Plug Power hydrogen plant to pay off the 30year general obligation bonds, residents of the hospital taxing district in Olney and Newcastle must approve sales of the bonds.

“We need your input, questions and thoughts,” Mr. Huff told the group.

“Y’all have convinced me of the need for a new hospital,” Tower Extrusions CEO Mark McClelland said. “But what if Plug Power goes broke? What if it fails? You’ve built this thing and issued the bonds…. That’s the main concern I hear in the community is, can we afford it?”

Mr. Huff said the OHH had worked through this scenario with its financial advisors, Government Capital Corporation, and had three solutions: restructuring the bonds, taking out a USDA loan, and as a last resort raising the property tax rate.

Mr. Lovett noted that the 1964 wing of the hospital was built in “tough economic times … and reaped the benefits of the good times.”

“If you wait until the time is right, it’s too late,” he said.

The bonds will be issued in two tranches: the first would be $26 million, and the second, up to $7 million more, he said.

Olney Independent School District Superintendent Dr. Greg Roach said that although the wind farm has been “a cash cow, a home run” for the school district, “I did my budgeting at a higher depreciation” to avoid uncertainties in the value of the machinery.

Carla Perry of CEMCO asked whether the hospital could get an agreement to keep the general contractor on budget. “Can you get a contract so it’s not $34 million?” she asked.

“If the supply chain stays okay I am confident that we can come in on time and on budget,” Mr. Huff said. “They are incentivized to come in on time and under budget.”

He added that the Olney Family Clinic and Wellness Center and the EMS building stayed on schedule and within budget.

The hospital would pay down the interest in the first 10 years and see its payments decrease as the bonds were paid off, Mr. Huff said.

Mr. Huff also said the hospital will see a 20 percent increase in new business and revenue for the first two to three years, as OHH recruits new physicians. “We’ve brought on multiple new services to keep the community here instead of in Dallas, but we’re running out of room,” Chief Nursing Officer Samantha Webb said.

The new hospital will still be classified as a critical access facility, meaning that it would have no more than 25 beds, Mr. Huff said.

“Most everybody in this room is going to vote for it,” Mr. McClelland said.

“Everyone I’ve talked to has full faith in you,” Steve Slater, executive vice president at Olney Interbank said.