AU officials to meet Wednesday with Regents about bond funding on debts

AU Medical Center is set to take on $55 million in bond funding to retire some existing debt and pay for projects, officials will tell the University System of Georgia Board of Regents on Wednesday.


AU President Brooks Keel and Chief Business Officer Tony Wagner will present an information item on the hospital’s finances and debt at the Regents meeting in Atlanta. Wagner said they will update the Regents on plans to borrow roughly $55 million to retire some existing debt, pay itself back for projects it funded out of revenues and fund future projects.

Last month, the Development Authority of Richmond County approved up to $75 million in revenue bonds for the hospital, but Wagner said the actual number will be much lower.

“This is not going to be a $75 million financing,” he said. “It is probably going to be about $55 million.”

That will allow the AU Medical Center to retire a $41 million bank loan, finance about $12 million in completed projects it paid for out of revenues, such as a hybrid operating room, and consolidate and relocate the kidney transplant unit, Wagner said. It will also provide funding for new projects, such as relocating the infectious-disease center and the Ryan White program, he said.

The Regents will be briefed on the new potential Columbia County hospital, Wagner said.

“We won’t spend a lot of time talking about it, but we will update them on Columbia County and make sure that they know that’s a project we’re continuing to anticipate doing,” he said.

AUMC was awarded the required certificate of need by the state over competing requests from University and Doctors hospitals to build that county’s first hospital. The last appeal contesting that certificate is pending before the Court of Appeals of Georgia, and a decision could come any day. AUMC got the certificate through an exception that required Columbia County to pay 20 percent of the cost, or roughly $30 million, and Wagner said borrowing the rest will not be a problem.

Part of the certificate vetting process is demonstrating the project is financially feasible, he said.

“It will add value overall to us financially and so, therefore, borrowing the money for it makes good financial sense,” Wagner said. “It’s a big project, I don’t want to say that it’s not a big project, that borrowing $120 million is a trivial thing. But when we’ve done the financial planning around Columbia County, we believe carrying the debt on that project is something that is financially sustainable and will allow us to grow our revenues and create the operating margin that we would anticipate.”

At its latest meeting in January, AU Health reported carrying $178.6 million in long-term debt as of December.

Reach Tom Corwin at (706) 823-3213 or



Wed, 02/21/2018 - 21:34

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