The Tulare Regional Medical Center has a new $800,000 line of credit under its belt after a special board meeting on Thursday night, though beyond the grand total, details are scant.
Opening the line of credit with Bank of the Sierra was a move to get a discount from a vendor, Dr. Benny Benzeevi, the CEO of Healthcare Conglomerate Associates (HCCA), said. HCCA is the company that the Tulare Local Healthcare District (TLHCD) Board of Directors has engaged to manage the day-to-day operations at the Tulare Regional Medical Center.
“Sometimes being able to to pay a larger amount at one time allows us to get a better overall return, in this case a larger discount, and so this specifically would affect our ability to get a larger discount with the vendor by making a payment in one lump sum,” Benzeevi said. “So this would be a loan from the bank to be able to do that so we can get that discount from the vendor.”
TLHCD Board Member Dr. Parmod Kumar stated that the line of credit may not be used immediately, and that the board has opened lines of credit before.
“It has done been many times, so if we do spend this money, we will bring that item to the board to be voted by the board to be spent on a particular item,” Kumar said. “This particular resolution, it is just a line of credit, we have done it numerous times, so on those documents, there are no details, we are not cutting a check tomorrow to somebody for this amount.”
“So there is really not any controversy in this particular line of credit from the Bank of the Sierra.”
Board member Linda Wilbourn spoke with Alan Germany, Chief Financial Officer for HCCA, during the meeting about the logistics of taking out lines of credit, and the interest rates. Wilbourn said she uses a line of credit in her business, and explained that interest is only accrued when money is taken from the line of credit.
“Maybe you can speak to the interest,” Wilbourn asked. “Usually they’re very low interest rates.”
“That’s exactly the case in this situation,” Germany said. “It’s only a couple percentage points [above prime].”
During the meeting, no official of HCCA or the TLHCD identified a specific interest rate for the line of credit or the vendor that would require a lump-sum payment.
The board unanimously voted to approve establishing the line of credit, with board member Laura Gadke absent.
Listen to the meeting and read the agenda below. To listen to past board meetings, head to our TLHCD Board Meetings page.