City provides loan to hospital for adult psych renovations
Bryan M. Whitfield Memorial Hospital will be receiving a short-term loan from the City of Demopolis in an effort to move forward with a project that officials said will bring new revenues to the facilities.
BMWMH CEO Arthur Evans spoke to the council during a meeting Thursday requesting the short-term loan that he said would be paid back in approximately six months when the hospital’s board plans to receive a USDA loan.
“We have submitted an application for a USDA loan, but that will not come on line until February or March of next year, which is too late for us (to have impact this fiscal year). We are asking the city to provide a temporary loan so we can expedite the process,” Evans said.
The hospital has been approved to house a 10-bed adult psychiatric unit. Evans said that space will turn hospital space that is currently not being used into a new revenue stream.
The hospital board’s plan is to renovate the second floor of the hospital to be used for four distinct units: geriatric psychiatric, intensive care, self recovery, and the new adult psychiatric program.
During the term of the short-term loan, the hospital will pay the city the same interest it intends to pay for the USDA loan, 3.62 percent.
Evans said the worst case scenario is that if the USDA loan does not come through, then the hospital will seek a loan through local banks to repay the city.
“This is not out of the ordinary. In fact, the hospital and city went through similar circumstances for a construction project in 1973,” Evans said.
Timing is an issue for the hospital as officials there want to get the project underway immediately. Evans told the council he would need to know the city’s position on the loan within two weeks.
Councilman Cleveland Cole said the council should support the hospital and made a motion to provide the funds to the hospital.
“We need to help our hospital. I think the people of Demopolis would want us to support the hospital,” Cole said.
Mayor Mike Grayson was one of two who voted against the loan. Both he and Councilman Bill Meador Jr. voiced concerns over the timing and the need to work out the details.
“I think we need to think about this very carefully,” Grayson said. “The city is not a bank. I have full confidence in (Evans) and the hospital board, but we are dealing with the public’s money and we have to be prudent.”
Grayson added that providing the loan would take the city’s reserves down to $3 million.
A motion by the mayor and seconded by Meador to table the discussion failed to pass. The motion by Cole to provide the loan was seconded by Harris Nelson and passed 4-2 with Charles Jones and Nathan Hardy also voting in favor.
“We’ve all declared our opinions on how important the hospital is to our community. Now is the time for us to put our money where our mouths are,” Nelson said.
The motion calls for attorneys with the city and hospital to draw up details and the necessary paperwork, such as payment schedule.
Other items discussed by the council included:
• discussing options on Roman Alley where the council is considering access possibilities. The council has voted to have an engineering firm look at the area and recommend options.
• bids for Herbert Street project. The bids were to be opened during the council meeting, but due to the validity of one submission, the bids were held and the item tabled until the next council meeting.
• proposed ordinance regulating predatory lending businesses. The Demopolis Business Council had requested the council look at adopting an ordinance. The council questioned whether the goal is to have the businesses together in one area or, the opposite, to create an ordinance that ensures they are not stacked in one specific location. Any ordinance passed would not effect current businesses.
The council voted to send the item to the city’s planning commission for its review and recommendation.
• approving all permits and applications pertaining to the Christmas on the River event.
• approving a surplus of bikes being held by the Demopolis Police Department. DPD Chief Tommie Reese said the department has 30 bikes that have been collected through the years and were never claimed. Four of the bikes will be donated to Jimmy Hale Missions and the remainder will be sold on govdeals.com.
The next council meeting is scheduled for Thursday, Nov. 5, 5:15 p.m., at Rooster Hall.