Hospital secures bond for emergency expenses

Published 1:30 am Friday, March 27, 2026

WhidbeyHealth has an extra $10 million in credit, again.

At their meeting Thursday, the board members adopted a resolution to authorize issuance of a limited tax general obligation and revenue bond in an amount not to exceed $10 million from Coastal Community Bank. The board approved an identical revenue bond agreement a year ago, but it expires in April. The new agreement expires on April 2, 2027.

Chief Financial Officer Paul Rogers said he doesn’t expect the hospital district to access the credit, but it’s for emergency purposes and to improve the district’s credit rating.

“There are no known capital expense or operating expense that this money needs to be used for at this time,” he said.

“I look at it as an insurance policy, a funding of last resort,” he added.

Last year, Rogers said he hoped the bond, also considered a taxable revolving line of credit, would improve the district’s credit rating, but that didn’t happen. On March 16, Moody’s Ratings confirmed the hospital district’s prior credit ratings; Moody’s is a global risk assessment firm.

The hospital’s ratings were downgraded in 2024 based on “severe and immediate liquidity challenges.” Moody’s downgraded to B1 from Ba3 the hospital district’s Unlimited Tax General Obligation Bonds, affecting about $43.9 million. Moody’s also downgraded to Caa1 from B3 the district’s Limited Tax General Obligation, affecting about $11.9 million.

In December, Moody’s placed the hospital district on a list of government issuers on review due to lack of sufficient information. The ratings action last week, confirming the previous ratings, states that Moody’s now has “sufficient unaudited information.”

Still, the hospital administration is optimistic.

One year ago, Rogers reported that the hospital had 10 days cash on hand but he expected it to increase to 23 days by the middle of July. This week, he said the hospital has 10.5 days of cash on hand, and he expects it to increase to 30 days in six months.

Cash on hand is a measure of the immediate, liquid funds an organization can access to pay such costs as payroll.

Rogers said last year that he didn’t expect to need to access the funds, but this week he said the hospital did for a short time. He explained that the hospital borrowed less than $250,000 and repaid it in less than a week.

The interest is “prime plus 1,” he said, but can never be less than 7%.

Securing the limited tax general obligation and revenue bond will cost a $50,000 processing fee, Rogers said.

Dr. Mark Borden, a hospital board member, said he researched the issue “in depth” and decided it was a good idea, especially in relation to the district’s credit rating.