El Paso Children’s Hospital to pay back UMC nearly $48 million including secured and unsecured debt
El Paso County Commissioners and University Medical Center expect El Paso Children’s to pay back $48 million, but they don’t know when, nor can they guarantee that money will be paid back.
The joint plan calls for EPCH to repay UMC $15 million, which is a secured debt.
This debt will be paid after the other creditors are paid off, but it must be paid.
The plan also calls for EPCH to pay UMC $33 million, which is an unsecured debt. This will be paid last, although its not expected for a long time.
The county says it expects $48 million to be repaid, it is forgiving the other $58 million, but has no timeline or deadline for full repayment.
“Fifty million was essentially forgiven,”said Commissioner David Stout, “but if we would have given this hospital to a third party, we wouldn’t have been able to recoup any of that money.”
UMC claims EPCH owes it $106 million, 50 percent of which County Judge Veronica Escobar says was accrued after EPCH stopped paying rent.
She said that wasn’t money UMC lost, but rent money UMC didn’t collect. The other 50 percent was money taken from UMC’s budget.
She says the county deliberately didn’t raise taxes this year to ensure residents didn’t bear a direct tax burden due to EPCH’s bankruptcy.
Escobar also explained local taxes aren’t paying for EPCH’s unpaid debt: local taxes only make up 15 percent of UMC’s budget, although this doesn’t account for state and federal taxes which make up the rest.
“I’m prepared to hear the criticism from members of the public, who say, ‘why didn’t you just walk away?'” Escobar said. She said it’s an investment worth making: EPCH provides 400 jobs and vital clinical services to the area.
When asked why taxpayers didn’t have more of an input in the decision-making process, Escobar and Stout said a public election would have been too costly and tedious.
“I really don’t think that should have gone to a public vote,” Escobar said. “And in part because I don’t see it as forgiving. I really do think at some point Children’s can be profitable under a different business model.”
