BREWTON, Ala. — Brewton city councilors agreed Monday to hold a public hearing next month on a request that would put the city’s name behind borrowing by the Escambia County Health Care Authority if the authority needs additional funds to keep D.W. McMillan Hospital operating.
The hearing is set for Oct. 12 at 4:30 p.m., during the council’s regular meeting.
The request came from ECHCA Attorney Broox Garrett, who approached the council ahead of Monday’s meeting and asked whether the city would be willing to become a co-signatory for the authority.
‘More of a Line of Credit Than a Loan’
Garrett was careful to frame the request as a contingency rather than an immediate need.
“We hope we don’t need to borrow, but this is setting the ground work if needed,” Garrett told the council. “This is just a possibility. With the 2027 taxes coming and an Alabama tax passed, those two will help tremendously. But, we don’t want to come in a panic. This would be more of a line of credit than a loan.”
The distinction Garrett drew matters. A loan is money borrowed now, with repayment beginning on a schedule. A line of credit is authorized borrowing capacity that may never be drawn on — the financial equivalent of establishing that the door will open if the authority needs to walk through it.
The reason to establish that capacity before it is needed is precisely the scenario Garrett said the authority wants to avoid: arriving at a lender in a panic. An institution seeking emergency credit negotiates from a weaker position than one that arranged terms in advance, and for a hospital, a gap in available cash is not an accounting problem. It is a service interruption.
Garrett also told the council that if the city joins in financial responsibility for the hospital, none of the funds secured by the loan would leave Brewton.
The Mayor: No New Taxes
Brewton Mayor Frank Nalty said city residents would not see any new taxes if the signatory agreement with ECHCA is made.
That is the question most residents are likely to ask first, and it points at what co-signing actually commits a city to. A co-signatory is not spending money. It is accepting contingent liability — a promise to stand behind the debt if the primary borrower cannot pay it. If the authority services the debt as expected, the city’s obligation never activates and no dollars change hands.
The risk lives in the tail: if the hospital’s finances deteriorated to the point that it could not repay, the obligation would fall to the guarantors.
A Councilor Who Supports It, and Wants the Hearing Anyway
Councilor David Jennings said he intends to support the request, but agreed residents are entitled to weigh in before the council acts.
“I will be on the side of the hospital in this,” Jennings said. “But there are differing opinions and we would want to hear those.”
The council agreed to set the hearing for public input rather than voting on the request Monday.
Why Rural Hospitals End Up in This Position
The underlying pressure is not unique to Brewton. Rural hospitals across Alabama and the broader South operate on margins that leave little room for timing problems, and the timing problems are structural.
Reimbursement arrives well after care is delivered. Payer mix in rural counties skews toward Medicare, Medicaid and uninsured patients, which reduces revenue per patient compared with hospitals serving more commercially insured populations. Fixed costs — an emergency department that must stay staffed whether or not patients arrive, equipment, utilities — do not scale down when volume falls.
The result is institutions that may be viable over a year but face cash shortfalls within it. That is the gap a line of credit is designed to bridge, and it is why tax revenue scheduled to arrive in 2027, as Garrett referenced, does not by itself resolve a need that could surface before then.
For Brewton and the surrounding communities, what is at stake in an arrangement like this is access. The nearest alternative for emergency care in a rural county is frequently a substantial drive, and in genuine emergencies that distance is measured in outcomes rather than inconvenience.
In Other Business
The council also took the following actions Monday:
- Set a public hearing for a liquor license transfer for Pops Place.
- Approved Trick or Treat for Oct. 31 from 5 to 8 p.m. Brewton Police will have a presence throughout the area, with a portion of Belleville and Evergreen avenues closed to traffic during those hours. Officers will also monitor the area around Sportsman Park for the Trunk or Treat event held there.
- Approved the “Walk with Sybil” event set for Sept. 26, beginning on Evergreen Avenue, with Brewton Police monitoring the area during the 5K walk.
- Appointed Ruth Collins to the Brewton Development Authority board.
The Oct. 12 hearing on the ECHCA request will be held at the council’s regular meeting at 4:30 p.m.