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9. B. 1.
Approval of a Resolution Authorizing the Calhoun County Medical Care Facility to pursue a PPP loan
Jim Dyer, Corporation Counsel, Corporation Counsel
Resolved that the Calhoun County Board of Commission does authorize the Calhoun County Medical Care Facility to pursue a Payroll Protection Program loan through Southern Michigan Bank and Trust in an amount not to exceed 2.2 Million Dollars, and authorize the County Administrator/Controller to sign all documents necessary to complete the loan documentation.
The Calhoun County Medical Care Facility, and County Administration recommends approval of the Resolution.
Though it functions as a separate entity, by statute the Calhoun County Medical Care Facility has no independent legal authority to seek loans. Rather, that authority comes comes by direct authorization from the County Board of Commission, The most prominent example of that situation is the County's authorization and guarantee of bond funding to construct and renovate the facility itself.
The payroll protection plan is a program intended to alleviate the impact of COVID-19 on operating costs that remain high, though facility occupancy, and revenue, has been reduced due to the pandemic. The program permits an employer to borrow an amount equivalent to 2.5 months of their average monthly payroll. In this case the Medical Care Facility has an average monthly payroll of $845,329.00, permitting a loan of $2,113,323.00. (See attached loan application.)
The program permits the employer to spend the loan on payroll expenses and certain other direct operating costs, such as utilities, over a 24 week period. If the facility complies with these loan terms and can demonstrate that in an application for forgiveness the loan need not be repaid. Other county medical care facilities have successfully pursued these PPP loans and several have already received a notice of forgiveness.
The Medical Care Facility has worked with a consultant to pursue this loan. He has indicated that they qualify for this program as an "other 501 (c) organization." The lender has requested that the County authorize this loan given the legal restrictions on borrowing described above.
As suggested by the Commission.
The Calhoun County Medical Care Facility and County Administration recommend that the Calhoun County Board of Commission adopt a resolution authorizing the Calhoun County Medical Care Facility to pursue a Payroll Protection Program loan through Southern Michigan Bank and Trust in an amount not to exceed 2.2 Million Dollars, and to further authorize the County Administrator/Controller to sign all documents necessary to complete the loan documentation.
None anticipated. Though not guaranteed, there is a good chance that this loan will be forgiven, as the Medical Care Facility plans to spend the money consistent with the terms of the Payroll Protection Program. If the loan must be repaid, funds will come from the operating revenue of the Medical Care Facility and not the County General Fund.
PPP Loan Application
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