Hospital’s nonprofit status could face delays
Carson-Tahoe Hospital’s conversion to a nonprofit could be delayed three months to Jan. 2, 2002. Officials said there may be a problem with the timing of issuance of bonds, that will replace the hospital’s current $26 million public debt.
Before the hospital can convert to a nonprofit it must have the required bonds in place in addition to a letter from the Internal Revenue Service qualifying the hospital for tax exempt status, a hospital official said.
The bonds currently held by Carson City don’t allow for prepayment, and new bonds must be in place for bondholders per the original agreement.
Typically, the city helps bonding, but has already committed to bonds this year for other entities, including the Brewery Arts Center, Senior Center, and Carson Redevelopment. The city is not liable for these bonds.
Carson City and the bondholders get a break in the rates if less than $10 million worth of bonds are issued in any given year. The hospital’s request for $25 million to $30 million in bonds would change the terms for the deals that have already been set. Unless something can be worked out, the hospital will have to wait until 2002 to apply for those bonds with the city.
Former Chief Executive Officer Steve Smith, serving as a consultant for the hospital said officials would be working with Carson City supervisors to circumvent the problem.
“Everything takes longer than you think,” he said. “We probably wouldn’t have been ready by October anyway.”
Application for tax exempt status was submitted July 23, and it will be another three to six months before that process is complete, pushing the original September date back as far as January 23, 2002.
The proposed the transfer date is expected Jan. 2 and an outside date of March 31 is being considered to cover any additional delays.
This is merely permission to look at proposals, but if a deal can be worked out the move could streamline service in addition to helping alleviate the shortage of regular hospital beds.