Center for Open Government: UofL Health hoarding $35 million state loan as part of massive cash reserves
“We really, really need that loan; we truly do” is what UofL President Neeli Bendpudi told the public.
UofL Health’s CEO Tom Miller testified in front of a state Medicaid oversight committee that the loan from the state was vital to protect jobs and provide medical access in underserved areas.
UofL CFO Dan Durbin “implored” members of a university board to “influence the proper people” to secure legislative support for the taxpayer subsidized financing.
Documents obtained by the Center for Open Government have revealed that while UofL was making those statements, university officials were securing a “fallback” line of credit from PNC Bank.
The Center’s most recent open records request now reveals by November 2020, UofL Health had amassed $407 million in cash reserves - including the $35 million state loan. In addition, their cash forecast through June 2021 indicates UofL Health won’t need to spend a penny of those funds.
The General Assembly should begin to press Bendapudi and Miller on exactly what is going on here. Remember, the $35 million was bonded. Taxpayers are financing long-term debt for the grant to UofL.
The current budget being considered by legislators includes a $3.069 million debt service payment for the loan. The same amount was appropriated in the last budget. Therefore, by the end of the biennium, Kentucky taxpayers will have ponied up $6.1 million to provide a loan that UofL has tucked away in a savings account.
The budget conference committee should ask two questions to UofL:
With UofL Health’s solid cash position, is the $35 million loan still necessary?
If so, what is the specific justification and intention for those funds?
UofL will almost certainly attempt to justify keeping the funds, if only to save face. Legislators should be skeptical. While lobbying for the state loan, Bendapudi withheld the fact UofL had secured the PNC line of credit from a Senate committee.
If the cash is sitting in reserve, how can she say again with a straight face they really, really need the loan?