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Defunct Hospital Pays Off Bonds, Cuts Tax

Posted on: Tuesday, 29 November 2005, 18:00 CST

By Terry Hillig, St. Louis Post-Dispatch

Nov. 29--Taxpayers in Wood River Township can expect lower property taxes next year after directors of the defunct Wood River Township Hospital pay off a $25 million bond issue this week.

Ken Miller, president of the Wood River Township Hospital board, said the payoff will come eight years earlier than once anticipated and save taxpayers about $6.9 million in interest payments.

The payoff will lower but not eliminate the hospital's property tax. Miller said that will depend on the outcome of pending litigation and a final settlement of the hospital's pension obligations.

The early payoff was made possible by sale of the hospital facility to Madison County for $800,000 in 2001 and an unanticipated refund of $9.5 million from the Illinois Municipal Retirement Fund in 2002.

The hospital opened its doors at 101 East Edwardsville Road in Wood River in 1949. Township voters had overwhelmingly approved a tax-supported hospital in a 1948 referendum. It closed in July 2000, but the board has continued to levy taxes to meet bond and pension obligations and other expenses.

None of the current hospital board members was on the board in 1993 when the bond issue was approved, and Miller said the board is strongly committed to complete elimination of the hospital tax.

He said the hospital's yet-to-be-determined 2005 tax rate -- payable next year -- should be much lower than the 2004 rate of 34.35 cents per $100 assessed valuation.

The 2004 rate resulted in a tax of $114.50 on a house worth $100,000. In Illinois, houses are assessed at one-third of market value for tax purposes.

The board is awaiting a ruling on a lawsuit filed in 1999 by the township's three biggest taxpayers -- Olin Corp., Premcor Refining Group and Shell Oil Co., which then owned what is now the ConocoPhillips Wood River Refinery. The companies claim they were taxed at a rate greater than authorized by law and are entitled to tax refunds.

Circuit Judge William Becker heard arguments in January but has yet to rule on the suit. A decision in favor of the plaintiffs could mean refunds and attorney fees of up to $500,000.

"It would just mean that we would have to stretch out the taxing that much longer," Miller said. The losing side in the suit is almost certain to appeal, Miller said.

Also undetermined is the hospital's final obligation to the Illinois Municipal Retirement Fund. A final reconciliation could take several years.

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OLN, PCO, RD, SC, SHEL, COP,

Source: St. Louis Post-Dispatch

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