Why the Special Hospital District will not pass along more debt?
Sublette County currently has a Rural Health Care District. When it was approved by the voters in the past, the Rural Health Care District was enough. Since that time, our community has grown, and the healthcare needs have grown with it. Our community is ready for a Hospital District.
You might ask what the difference between a Rural Health Care District and a Hospital District is – in a nutshell, a Rural Health Care District can tax up to 2 mills without asking the voters for more, with a total possible of 4 mills; while a Hospital District can tax up to 3 mills without asking the voters for more, with a total possible of up to 6 mills with voter approval.
With the Rural Health Care District mills, the extra 2 mills, once approved by the voters, stays in place permanently until repealed by the voters. In contrast, with the proposed Hospital District, the voters get to vote on the additional up to 3 mills every 4 years – giving the voters more control. See Wyoming Statutes § 35-2-708(e) and § 35-2-414(c).
Some have been trying to scare voters away from voting for a much-needed Hospital District by pointing to statutes that allow Hospital Districts to ask pass on debt to the voters without their approval. The Sublette County Rural Health Care District currently does not have any long-term debt. If the Hospital District is approved, then it will apply to the USDA for a loan.
Lorraine Werner of the USDA writes:
“If this application is approved and the Letter of Conditions is issued, no other debt can be issued by the borrower without prior approval of the Government. The government takes all security, so without our permission other debt, lines of credit, or additional liens cannot be placed on the project. That is one of the reasons we require a capital needs reserve and a debt service reserve to be established at the very beginning of the loan. This will be included in the underwriting and the feasibility of the project. A line of credit should not be needed because start-up costs will be addressed in the feasibility study and will be part of the funding package. Finally, if this is approved, you will be required to submit quarterly financials to our office for the first two years from closing. If there are no issues we will go to yearly financials, if there are problems with cash flow (sustainability) we will continue quarterly reviews and present ideas, tools, to help with the project’s sustainability. We are a hands on agency.”
Some have also been trying to scare voters away from voting for a much-needed Hospital District by pointing to statutes that allow Hospital Districts to ask voters to approve bonds for construction, facilities, and equipment. Bonds are the way for a Hospital District to acquire debt (though as noted above if the USDA loan is approved than the USDA will not allow further debt). The funny thing is, Rural Healthcare Districts have similar rights to ask for bonds under Wyoming Statute § 35-2-709. Whether we operate under a Rural Health Care District or a Hospital District, the voters have the right to approve or deny any bond proposal – Hospital Boards do not get to decide this, the voters do.
Wyoming Statute § 39-13-104(e)(ii) summarizes these powers for Hospital Districts and (e)(xi) summarizes these powers for Rural Health Care Districts. It does not grant additional taxing powers to either type of entity.
To sum up – any extra mils need voter approval. The RHCD currently has no debt. Any further debt that might be acquired by issuing bonds, needs voter approval. And if the USDA application is approved to build a new hospital, the USDA will not allow any further debt to be accrued.
If you have questions about why Sublette County should vote for a Hospital District, please contact the Hospital District Political Action Committee at 307-231-3210, and please vote for Sublette County to form a Hospital District!
