WinnMed Board Finalizes $35 Million USDA Financing Package

Decorah Vikings win, City Council votes, New Referenda on the ballot — we're the one telling Decorah's story. Donate now. DECORAH — The WinnMed Board of Trustees last week approved resolutions finalizing a $35 million federal loan package for the hospital's ongoing expansion and renovation project, completing a financing process officials said has taken nearly four years. The board voted unanimously May 6 to authorize long-term financing through the U.S. Department of Agriculture Rural Development program, replacing interim construction financing that has funded the project since 2023. Chief Financial Officer Ben Stevens described the approvals as the final major procedural step before the USDA formally closes on the loan later this month. Trustees approved three actions tied to the financing package: the USDA loan agreement, a bond resolution authorizing issuance of hospital revenue bonds and closing certificates required under federal lending rules. The approvals conclude a financing process that began when WinnMed secured interim financing from Decorah Bank & Trust during the early phases of construction. Stevens said USDA funds are expected to pay off that interim financing once the federal closing process is completed. The USDA loan is structured as four separate bonds totaling $35 million because federal lending rules cap individual bond issuances at $10 million. Stevens said the debt will be repaid entirely through hospital operating revenue rather than taxes. "One thing to note on that is it's payable solely from the net revenue of the hospital," Stevens said. "That means that no taxation is done for this. We're not raising taxation." The financing carries a fixed 3.5% interest rate over 30 years, resulting in monthly payments of approximately $157,500. Stevens said the rate is favorable compared with current commercial lending markets. "3.5 is still an incredible 30-year fixed commercial rate," he said. The USDA financing will replace much of the hospital's temporary borrowing arrangement, though WinnMed will continue carrying a separate local bank obligation tied to roughly $8 million in additional project financing. Stevens said that balance has already been reduced to about $4 million and could eventually fall closer to $2.5 million as remaining project funds and reimbursements are reconciled. Hospital officials also said the USDA closing is expected to reimburse WinnMed for construction-period interest payments made during the project, improving the hospital's short-term cash position. Trustees also learned the USDA agreement includes operational restrictions common in federal rural hospital financing programs. Stevens said the hospital would not be able to lease or transfer the entire facility to another operator without federal involvement or approval. He said the language is intended to prevent private organizations from indirectly benefiting from subsidized federal financing after the loan has been secured. Several trustees asked questions about reserve structures, debt coverage ratios and how future operational performance could affect compliance with the loan agreement. Stevens said the hospital's projected financial performance remains within required thresholds but acknowledged the obligations will require ongoing monitoring. Under the agreement, the hospital must maintain a debt service coverage ratio of at least $1.25 in revenue for every $1 in debt payments. Stevens said current budget projections exceed that requirement. Fresh stories, delivered! Sign up for the free DecorahNews.com newsletter and stay informed, inspired, and ahead of the curve.