The Clayton County (Ga.) Commission rejected a bond this week for the county's only hospital, which may lead to layoffs or - in the worst case scenario - closing the hospital.
The commission voted 2 to 3 against a proposal for the county to back a $40 million bond for Southern Regional Health System. Commissioners told the hospital's president and CEO Edward Bonn to return with a better plan.
Bonn said he was disappointed in the commission's decision, but will consider other options, including federal programs.
The 331-bed hospital in Riverdale, Ga., must pay $40 million to creditors by the end of December or risk defaulting. Without help from Clayton County, the hospital will have to pay the bill itself, and Bonn said Southern Regional has only $48 million in reserves.
Bonn said the hospital would likely be unable to continue paying its $20 million a month expenses if it continues to operate with a loss.
Southern Regional's board chairman Ron Dodson told the commission last week that the hospital might be forced to close without the county's help.
Unfortunately, Clayton County itself has financial problems. The state of Georgia has frozen grants to Clayton because of incomplete financial records. State auditors have said they cannot trust information from the county's finance office.
Southern Regional Health System ended the 2008 fiscal year with a $7.07 million loss, $3.76 million of it on hospital operations and the rest from investments, according to hospital officials.