MASSENA — A $2.8 million loan received by Massena Memorial Hospital in August “has been exhausted or imminently will be exhausted,” according to a resolution passed by the Massena Town Council at a special meeting Friday.
The council agreed to borrow an additional $1.335 million “necessary for Massena Memorial Hospital’s short-term survival and long-term success as a provider of high quality and cost effective care for the communities that it serves.”
During the meeting, the board passed a resolution authorizing a line of credit agreement with St. Lawrence Health System with the town as the guarantor, just as they were for $2.8 million received earlier this year.
The Dormitory Authority of the State of New York had loaned the original $2.8 million to St. Lawrence Health System, and that money is being used as a line of credit for Massena Memorial. The loan cannot be given to a municipality, so it was set up through Canton-Potsdam Hospital, with Massena as the guarantor.
Massena Memorial Hospital will repay the money using $20 million in grant funding it is receiving from New York state’s Health Care Facility Transformation Program after becoming part of St. Lawrence Health System. However, town attorney Eric Gustafson said, the hospital needs additional cash before that grant will be finalized.
“The hospital needs a little additional borrowing to get us through the end of the year. St. Lawrence Health System has arranged another borrowing through DASNY very similar to the one we did back in August,” he said.
The resolution authorizes the borrowing and guarantee of up to an additional $1.335 million to pay the hospital’s immediate liabilities and payroll that are coming due, Mr. Gustafson said.
“What they’re looking for is a resolution authorizing that,” he said.
The resolution notes, “Borrowing additional funds from St. Lawrence up to $1,335,000 is a necessary and appropriate measure to achieve continued operation and quality of care at Massena Hospital. An arrangement of this kind is, in the Council’s view, necessary for Massena Hospital’s short-term survival and long-term success as a provider of high quality and cost effective care for the communities that it serves.”
It notes that under the circumstances, the additional borrowing with the town as guarantor is “fair and reasonable to the town and to Massena Hospital, and doing so is in the best interests of the town, its citizens, and Massena Hospital.”
“This will be the last borrowing that we need to do,” Mr. Gustafson said. “Everybody’s working hard on doing the background work and due diligence” to transfer the hospital’s assets to St. Lawrence Health System.
Councilman Thomas C. Miller wondered if there would be any impact on taxpayers, and Mr. Gustafson said, as it’s currently anticipated, it would not. He said the idea was that the money would be paid back from the grant that the hospital would receive from the state.
“As you know, all hospital debt is at least in theory debt of the town of Massena. This is just taking care of some of the outstanding debt that’s there. So could it possibly come back on the taxpayers? Of course,” he said. “This is necessary to keep the hospital running in the interim period. It has a huge impact in a positive way that it’s going to be used to keep the hospital open and ensure people are being paid.”
He said they were hopeful that the $20 million in grant funding would be available by the end of the year.