The Avalon City Council voted unanimously this week to loan $340,000 to the Catalina Island Medical Center so the hospital can complete the upgrade of its generator.
The loan comes with zero-interested, to be paid in $20,000 annual installments with a balloon payment of the balance at the end of five years.
The Avalon City Council voted unanimously this week to loan $340,000 to the Catalina Island Medical Center so the hospital can complete the upgrade of its generator.
The loan comes with zero-interested, to be paid in $20,000 annual installments with a balloon payment of the balance at the end of five years.
According to a staff report to the council, in 2014 the South Coast Air Quality Management District told the Catalina Island Medical Center that its 30-year-old generator did not meet clean air standards. In 2014, the cost of replacing the generator was estimated at $200,000. The actual cost has grown to $340,000. The Medical Center recently asked the city government for a grant of $200,000.
The Avalon staff recommended that the council either give the Medical Center a grant—money that wouldn’t have to be paid back—or a loan for the requested $200,000.
According to the staff report, if the hospital did not receive the funds for the generator, the Air Quality Management District could impose daily fines on the Medical Center and the hospital could be forced to close.
Councilwoman Cinde Cassidy and Councilman Oley Olsen both favored lending the hospital the money.
Mayor Anni Marshall said she was nervous about the $200,000 because she didn’t know what was going to come up with the city’s budget. (The Avalon financial year ends in June.)
Olsen suggested a loan at 1 percent interest.
After discussions between council members and hospital representatives made it clear they needed $340,000, Olsen made a motion that the city lend the Medical Center the full amount with repayment at the end of five years. Councilman Joe Sampson seconded the motion.
However, Marshall said she would rather see some of the money repaid with no interest. Olsen modified his motion to have the hospital repay the loan with annual installments of $20,000, at no interest, and a payment of the remaining balance at the end of five years. Sampson again seconded the motion.