The state Finance Board on Monday cleared the way for the conversion of Carson-Tahoe Hospital to a private nonprofit facility.
The project has been in the works for a year but, when Carson City supervisors came down to the final approvals, they found a technicality in state law standing in their way: a requirement that the hospital show a five-year track record as a private nonprofit facility before it could issue bonds that will pay for the conversion by reimbursing the city.
Members of the Finance Board, including Gov. Kenny Guinn and Treasurer Brian Krolicki, said they had no problem with the concept but they temporarily halted the deal Monday morning because of the way the agenda item was worded.
The agenda item asked the board to approve "the issuance and sale of the Carson City, Nevada, Hospital Revenue Bonds in an aggregate principal amount not to exceed $50 million. ..."
Both officials questioned whether that meant the state was in any way backing the bonds.
Chief Deputy Treasurer John Adkins said no.
"The Board of Supervisors has already reviewed the $50 million and determined it is appropriate for this project," he said. "All you're doing is waiving the 5-year plan requirement."
Deputy Attorney General Ann Wilkinson said the same, that the state would have no "legal or moral obligation" if the hospital defaulted on the bonds.
To satisfy those concerns, they modified the resolution to clarify that the Finance Board was approving a waiver of the 5-year track record "so that the city may proceed with its issuance and sale of the bonds."
The bond money will be used to pay the city for the value of the hospital and its assets and to pay off the remaining city-held indebtedness of the hospital facility.
Hospital officials say they probably won't need the entire $50 million, that the total estimated cost is looking more like $45 million or even less.