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06/26/2008: "SJI Hospital Commissioners Take Next Step Toward New Facility"

Citing the need for increased revenue and the need for a larger facility than the current one, the San Juan County Public Hospital District #1 Commissioners approved a “letter of intent” that will be forwarded to PeaceHealth to “investigate the acquisition and financing of a site” for what is being called an “integrated medical center,” but commonly called a “hospital.”

Meeting in a room last night (06-25-08) packed with concerned and curious members of the public and the media, the Commissioners responded to questions from the audience on topics ranging from “how will it be paid for;” “do we need it?” And “what happens if the financial projections are incorrect?;” and some statements of support for moving forward with PeaceHealth to investigate a potential partnership.


Two issues came up repeatedly, one was how much access and input will the public have to review any final proposed contract, prior to the Commissioners signing one, and the other was concerns on how, and to what extent, the costs will impact the District.

The question of access and input was posed and framed in a number of ways in an attempt to pin down an answer to how much time will the public have to review and respond to a proposed contract between the District and PeaceHealth. The Commissioners would not set a time frame, but said the public would be able to review and respond before a contract was signed.

As for the funding issue, the District is on record as stating they plan to raise the necessary money by selling general obligation bonds; an action that does not require voter approval.

General obligations bonds puts the tax payer on the hook if things go wrong if there is not enough money coming in from operations to pay off the bond.

the question of why General Obligation bonds, as opposed to revenue bonds was asked. Revenue bonds would pay off the debt by the revenue the District plans to received from money generated by the new hospital. If that was not enough to meet the obligation, it is the investor who loses, not the tax payer

Revenue bonds are less attractive to buyers because there is not a general obligation on property owners to come up with more money if the revenue from the hospital district is inadequate to pay off the bond. The informal response to the question was that general obligation bonds would be best.

as per the letter of intent, PeaceHealth will now take the next step, which is to “prepare and circulate in a timely manner the first draft of an Agreement for review by the Hospital District” that will spell out who does what, when, and how.