Erlanger in Chattanooga Appeals for $370 Million in Bonds to Clear Debts, Expand Services
Introduction
CHATTANOOGA, Tennessee – Erlanger, a leading healthcare provider in Chattanooga, has applied for $370 million in bonds. This move follows the organization’s shift into a private non-profit last year, a change that also altered how they issue these bonds. Erlanger states that obtaining these bonds would situate them in a stronger financial position while decreasing their reliance on federal and state funds.
Use of Funds
The requested $370 million in bonds would serve dual purposes. The bulk of these funds will be allocated towards paying off some of Erlanger’s previous debt. Concurrently, these funds will also facilitate improvements beyond the borders of Hamilton County. The bond request was submitted to the Chattanooga Health, Educational, and Housing Facility Board. The decision to approach this board lies in their capacity to offer bonds at a specific municipal bond rate that could potentially fare better than rates available on the open market.
Shift to Private Non-Profit Status and Its Implications
Erlanger had received approval from Tennessee’s Attorney General last year to transition into a private non-profit hospital. According to an Erlanger spokesperson, prior to this reorganization, Erlanger could issue its own tax-exempt governmental bonds. However, as a private non-profit, Erlanger must now pursue these bonds through the Health, Educational, and Housing Facility Board.
Local Resident’s Concerns
Citizens of Chattanooga have also voiced their concerns. Janice Gooden, a resident of District 8 said, “It also said refinancing existing projects and improvements. Is that focusing on just the hospitals, or does that include local clinics?” In response, it was clarified that the application for bonds was intended to allow for refunding existing hospitals and revenue, as well as refunding bonds from as far back as 2014, through the issuance of new bonds.
Erlanger’s Future Expansion Plans
When asked about potential expansion projects that could be funded by these bonds, a spokesperson mentioned anticipated projects in Hixson, Ooltewah, Cleveland, and in Murphy, North Carolina. “There’s hospitals or physician offices in those locations, so that’s part of the whole system as well,” she added. Erlanger aims to enhance its presence in these areas, thereby extending its services and those affiliated with it.
Conclusion
The resolution to issue Erlanger the $370 million in bonds was put forth for voting on Monday and was successfully passed. Erlanger’s bold move signifies its commitment to bettering its financial position while also expanding its healthcare service offerings. The proposed expansion plans are indicative of Erlanger’s ambition to extend its reach and make a significant impact on individual and community health.
Source: HERE News Network. Author: HERE News
