The next time the Utah County Commission is asked to authorize revenue bonds on behalf of Intermountain Health Care, commissioners plan to ask for public input.
Commissioner David Gardner said Tuesday he's heard enough concern from the public that he believes there needs to be an "open and frank discussion" before this kind of transaction occurs again.Utah County had been asked to participate in an interlocal agreement between Salt Lake, Wasatch and Weber counties to allow Weber County to issue $160 million in bonds in behalf of Intermountain Health Care.
The bonds will go toward replacement of hospitals in Heber and Ogden and for expansion of American Fork Hospital, said Darin Cowley, IHC spokesman.
As a non-profit 501-C3 entity, the health-care corporation is entitled to access government interest rates and the assurance of governmental guaranteed payment by working through the counties. Customers who buy the revenue bonds can show bond earnings as non-taxable income.
It's one of the few ways non-profit organizations have to raise money, Cowley said.
"We're actually very limited by law in the things we can do. For-profit hospitals, like Columbia, can issue stocks, for instance. They have far more advantages," he said.
Columbia Timpanogos Regional Hospital administrator Ken Armstrong said he believes accessing the bond market through municipal channels is patently unfair because it's an option not available to everyone. He said the public should be able to see financial records of a non-profit corporation and then decide if the status fits.
Commissioner Jerry Grover said he isn't sure he's inclined to approve the request given the number of complaints the commission received after the last such request.
"Does it compete? Are we giving unfair advantage to one hospital over another?" he asked.
Grover said the tax-exempt status pertains to property tax and is declared by the State Tax Commission while the revenue bonds originate with the counties and are approved by the counties.
Commissioner Gary Herbert said he doesn't believe it would be fair for the county to refuse to participate this time with Weber County when Utah County has asked for similar cooperation in the past.
Gardner said he would like to know the funds from the revenue bonds are only used to the non-profit areas and entities Intermountain Health Care oversees and not for any of the for-profit arms.
The logic behind the practice is that health care can be made available to the general public at a reduced cost, he said.
"I really think we need to be cautious," Gardner said. "I want to make sure we get some input before the next time."
"It might be good to put people on notice that we will be looking more closely at these," Herbert said. "We won't be rubber stamping them."