Now that officials have been given cost options on the construction of a sewer line that would service the new proposed Polk Medical Center, discussion on how to move forward with the project is set to begin soon.
But the ability to move forward on the $3 to $4 million-dollar undertaking is being bogged down by one question: Who is going to pay for it?
The new $40 million dollar hospital is planned for the intersection of Hwy. 278 and Kelly Road. Currently, there is no sewer line service available to that area. Adding an extension to the existing line, which stops short of reaching the site of the new hospital by a mile, is not feasible because the current line is already at volume capacity.
The only option is to install a new, larger line that will run from the city’s wastewater treatment plant on Branch Street, just behind Northwest Park, to the site of the proposed hospital -- a distance of five miles.
The City of Cedartown began researching finance options last week, but there’s been no money set aside for the project. But that shouldn’t come as a surprise to anyone, Cedartown City Manager Bill Fann said.
“We’ve said that since the beginning of discussions about the new hospital back in 2011,” Fann said speaking to the funding issue.
The situation is much the same for Polk County, according to County Manager Matt Denton. Denton said the first time the county was officially approached about drumming up money for the project was just a few weeks ago via a letter sent by Harold Wyatt, Jr., chairman of the Cedartown-Polk County Hospital Authority and Polk Medical Center and Kurt Stuenkel, president and CEO of Polk Medical and Floyd Medical Center.
“That was the first time they had asked, and the letter was asking for a firm commitment that we could provide it,” Denton said. “We’ve not done anything as far as looking at financing or funding and we don’t have plans to. None of the commissioners have gotten together and said ‘we need to sit down and do this,’ but I commend the city’s efforts in seeing what’s available.”
Hospital officials are concerned that a lack of commitment from the two governmental agencies will result in a delay of the hospital’s construction timeline.
In the April 26 letter, Wyatt and Stuenkel asked for an affirmation from Cedartown and Polk County officials that sewer infrastructure and service would be available on a timetable that would accommodate plans for construction of the new hospital.
“It is our hope to break ground on July 23, 2013, with an anticipated completion date of September 1, 2014,” Stuenkel wrote. “If we are to proceed with construction of the new hospital, we need a prompt commitment from the city and county that sewer service will be available at the new site by March 15, 2014.”
He noted that the construction timetable calls for the execution of the construction contract with Duffey/Brasfield by the end of May.
Additionally, Stuenkel asked for a firm commitment from the city of Cedartown and Polk County to fund and timely construct the sewer line to the site within the hospital’s time-line.
The City of Cedartown received one bid on the sewer line project from Powder Springs-based company Unity Construction. The bid listed three different sewer line size options with varying costs.
The cost for the installation of an 8-inch sewer line would be $3.4 million; a 10-inch sewer line would cost $3.9 million and a 12-inch line checks in at $4 million. It has not yet been determined just how big the line should be.
“Now that we’ve got the bid and have a solid figure on the cost, the next step is to sit down with everybody involved and discuss the options,” said Fann.
During a recent meeting of the Polk County Board of Commissioners, commissioner Marshelle Thaxton said it was his understanding after meeting with planners years ago that the hospital would pay for the needed sewer work.
In a signed November 2011 contract agreement regarding the terms of construction and funding of the new hospital between Floyd Healthcare Management, Inc., Polk Medical Center, Inc. (PMCI), and the Cedartown-Polk County Hospital Authority, a section on page 4 of that contract states in part that: “…. if public funding cannot be obtained for locating sewer or water lines to the replacement hospital site, Floyd or PMCI shall pay for location of said lines and shall deduct the related cost, including all engineering and consultant cost, plus interest at prime rate, from the PILOT (Payment In Lieu of Taxes) payment made by PMCI until either PMCI or Floyd is completely reimbursed.”
PMCI, is a newly formed non-profit nine-member body that oversees the day-to-day operations of the current hospital and will continue in that role once the new hospital is complete.
Last year, PMCI agreed to a Payment in Lieu of Taxes deal with Polk County and the City of Cedartown on behalf of the Cedartown-Polk County Hospital Authority. The agreement is for the five-year lease of the existing hospital, located on North Main Street, and during the course of 35 years, which includes the terms of the lease for the new hospital, once it is constructed.
Since the property and buildings will still be legally owned by the Cedartown-Polk County Hospital Authority, a tax-exempt entity, Floyd agreed to the PILOT arrangement so the county would not lose any tax money. The agreement does not spell out a specific dollar figure. The payment in lieu of taxes for the existing facility will be equal to 40 percent of the book value of the property multiplied by the millage rate levied by Polk County and Cedartown, with the exception of education and welfare spending.
Stuenkel sought to clarify the situation last Friday.
He confirmed that PILOT funds, which would be paid by PMCI to Polk County and the City of Cedartown, could in fact be used to fund the sewer project if no other means of financing were available.
“We have been in conversation with both the city and county about various ways to fund the sewer improvements,” Stuenkel said. “The payment of the PILOT is an annual decision of Cedartown-Polk County Hospital Authority. The thought of some is that if the city and county can find ways to fund the sewer in an advantageous way, that this then frees up future PILOT funds for other uses. If not, the
PILOT is certainly an avenue that can be used, but it will be available only for the sewer until the cost to construct it is paid off.”