Near the outset of the October 9 Front Royal Town Council meeting, Melanie Salins revisited her criticism of what she believes is a “sweetheart” deal delivered to Valley Health on a $60-million construction loan for a new Warren Memorial Hospital by the Front Royal-Warren County Economic Development Authority.
Salins is a founding member of “Birth Local” a grassroots group that unsuccessfully lobbied town and county government and Valley Health to preserve full women’s health services, including a maternity unit, at a new county hospital.
EDA officials and bond consultants have insisted that forgiving annual fees stretching over the life of a bond issue in favor of a one-time fee paid up front is business as usual in a competitive municipal market.
But during the public concerns portions of this week’s town council meeting, Salins said the agreed-upon one-time payment of $240,000 equates to a little over two years of annual fees on the front end of the loan. She estimated an annual loss in the range of $75,000 per year.
Paperwork on the Valley Health Industrial Revenue Bond issue through the EDA states that a “final maturity date” will occur “no later than January 1, 2050 – 32 years away. However, EDA Executive Director Jennifer McDonald said such bond issues are “typically” paid off or refinanced, removing the EDA’s original loan from the equation, in from 5 to 10 years. McDonald has also noted that the annual fee is based on 1/8 of 1% of the remaining annual balance of the loan.
Regardless of such explanations, Salins told town officials that municipal officials in other jurisdictions she had contacted around the commonwealth contested the up-front, one-time fee rationale as business as usual, one going so far as to laugh at the idea.
See Salins side of the argument in this video courtesy of Dewaye Coats, Warren County.