Lee County approves hospital bond payments in 95-second vote

Contract requires payments even if hospital closes; officials say county can cover cost without raising taxes.

LEESBURG — Lee County commissioners voted unanimously Tuesday night to commit the county to payments on up to $31 million in hospital bonds under a contract that requires payments to continue even if the hospital ceases operations.

There was no board discussion during the regularly scheduled voting session. From Chairman Luke Singletary’s introduction of the item to the gavel, approval took about 95 seconds.

Questions came afterward, from a resident who wanted to know what the commitment would mean for taxpayers.

County Attorney Jimmy Skipper described the contract as an initial legal step in the hospital project.

“There’s a lot of steps to go, obviously, but we have to get this step out of the way to keep it moving,” he said.

Singletary asked whether commissioners had questions. None did. Commissioner Billy Mathis moved to approve the agreement, Vice Chairman Chris Guarnieri seconded it, and the motion passed with no audible opposition.

The contract makes the county’s payment obligations “absolute and unconditional,” explicitly including circumstances involving “the cessation of operations at one or more of the projects.” It also requires the county to levy property taxes, within a seven-mill statutory limit, if needed to make the payments. The county must budget for them annually and cannot stop paying if the Hospital Authority defaults.

Officials repeatedly described the borrowing as $30 million. The approved resolution authorizes up to $31 million. Interest would add to the county’s total repayment cost.

During public comment, resident Brian Granberry asked whether taxpayers would have to cover payments if the hospital could not.

“No, no,” Mathis said. “The taxpayers are going to pay it anyway from the beginning.”

Mathis estimated annual debt service at about $2 million, paid from the general fund.

“So can we afford that payment? Yes, we can, without a tax increase,” he said.

The obligation would remain if the project failed, he said.

“Let’s say the hospital went belly up,” Mathis said. “Well, the payment’s still going to be the same.”

The annual amount is not final. At the Hospital Authority’s hearing earlier Tuesday, bond attorney Roger Murray said payments would depend on interest rates and a repayment period that could span 20, 30 or 40 years.

Singletary described the county-backed borrowing as an “operating bond,” separate from construction financing, and said officials did not anticipate using the entire $30 million.

The resolution authorizes broader uses, including acquisition, construction, equipment, startup costs, working capital and a debt service reserve. Both Singletary and Mathis said development around the hospital would help cover county payments through additional tax revenue.

“We anticipate growth around the hospital to more than offset this,” Singletary said, adding that businesses were waiting for the project to proceed.

He also said county savings could supplement payments if the hospital underperformed.

Mathis said the county eventually expects reimbursement once the hospital meets financial benchmarks. The contract references reimbursement from “excess cash,” but does not define that term. The separate agreement establishing those provisions has not been made public.

Earlier in the meeting, Singletary said the county anticipated no millage rate increase this year. Commissioners expect to set the rate at their first October meeting.

The hospital financing still requires court validation and federal review. The county has approved its payment commitment, but the repayment term, final annual payment and total cost remain undetermined.