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COLUMBUS, Ga. — The city recently pledged a future four mill property tax increase to bail out the Hospital Authority should their revenue be incapable of paying back their issued bond debt.

The move stems from a lengthy plan that first publicly announced the use of tax levy as collateral back in May. 

Every five years, the Hospital Authority — which is a subsidiary branch of the Columbus Consolidated Government — issues roughly $30 million in what are essential bonds. The ‘Refunding Revenue Anticipation Certificates’ are backed by the future gross revenue of the city’s healthcare system, which is supposed to be used to pay back the bond buyers when the certificates mature.

However, the Hospital Authority didn’t earn enough gross revenue to pay back the bonds they issued in 2013 and 2018. As a sub branch of CCG, the city government was left to either find a way out or to pick up the tab.

To do so, CCG simply authorized the Hospital Authority to issue new bonds for Series 2023, which would be able to raise funds to pay off the previous bonds from 2013 and 2018 — under one unmentionable condition: Should the Hospital Authority default again, CCG would simply raise property taxes to fund the bailout.

CCG listed you, the Columbus Taxpayer, as collateral on a Ponzi Scheme bailout structure.

That particular collateral use, however, was clandestinely kept very quiet and out-of-sight by CCG; it never publicly brought the matter up for discussion, but rather kept it carefully hidden in the finer details of a lengthy intergovernmental contract generated by City Attorney Clifton Fay.

You can view the 6-page resolution and 82-page contract on pages 66-152 of the agenda packet from the July 25 city council meeting.

That contract, which included a pledge to levy property tax increases should they be needed, was not publicly discussed when the agenda item was brought forth for a vote during the July 25 city council meeting.

Instead, the publicly-facing agenda used veiled and vague language, stating the agenda item was to “authorize officials of Columbus to take such further actions as are necessary to provide for the issuance and delivery of said certificates; and for other purposes,” which is how the item is described on the meeting’s agenda as Item #4 of the City Attorney’s Agenda.

Those ‘further actions’ and ‘other purposes,’ as it turns out, were to use the Columbus taxpayer as collateral to bail out the Hospital Authority’s debt if they were to default on it again.

The item passed without any discussion on the topic, leaving the general public completely in the dark on the potential property tax increase.

According to an article published by Moody’s on May 15, the renowned benchmark financial ratings provider assigned their Aa2 rating to the Hospital Authority’s Series 2023 certificates. Moody’s specifically stated that the rating was based on CCG’s use of taxpayer funds as collateral to back the bonds:

“The Aa2 rating … reflects the consolidated government's contractual commitment to levy a limited property tax on all taxable property in order to make debt service payments should revenues of the Columbus Hospital Authority be insufficient to do so,” said Moody’s.

Moody’s also went on to describe that it could not assign a ratings outlook on the potential future of the bonds, stating they “do not typically assign outlooks to local governments with this amount of debt outstanding.”

According to Moody’s, the bonds’ Aa2 rating could be downgraded if the city continues its trend of “imbalanced operations and/or material declines in available reserves.”

The rating could also be diminished if there is continued“financial weakness at the medical center or long-term care facilities that places outsized financial pressure on the consolidated government.”

In short: If the Hospital Authority did default on their bonds again, and if CCG actually had to increase property taxes to bail them out, the mere fact that even happened would severely harm the city’s Moody’s Ratings; the city is therefore strongly financially incentivized to ensure that does not occur. 

Time will tell. For the meanwhile, the Columbus Taxpayer remains to be used like cattle, offered as collateral on bonds that were only issued to bail out the old defaulted ones in the first place — and they didn’t even bother to tell you.

How aMaZiNg.

Facts are stubborn things — and we’ll keep publishing them, whether city officials like them or not.

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