The Sarasota Hospital District has received an ‘AA-’ rating, showing they’re financially strong

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The Sarasota County Public Hospital District, which encompasses the well-regarded Sarasota Memorial Health Care System, has just received a glowing “AA-” rating on its outstanding revenue bonds from Fitch. This top-tier rating reflects the district’s strong financial health and robust position in the market.

According to Fitch, the high rating is due to Sarasota Memorial’s impressive market dominance, solid historical operating cash flow, and a strong liquidity position. The hospital system holds a commanding 71% market share between its main Sarasota Memorial Hospital and its Venice campus for fiscal year 2023.

Looking ahead, Fitch anticipates that Sarasota Memorial will continue to lead the region’s healthcare sector. This optimism is supported by several strategic capital projects in the pipeline, including 34 new rooms set to open at the Venice hospital by the end of 2024, which will increase its bed count to 220. Also in the works is a new outpatient cancer pavilion in Sarasota slated for 2025, with potential plans for a similar center in Venice, and a new hospital in North Port that’s currently in the master planning stage.

Fitch expects capital spending to stay high but manageable, estimating around $1.3 billion in investments through fiscal year 2028. The potential North Port project is likely to be financed with bond funds in late 2025.

While the hospital district’s liquidity and operating metrics might soften slightly due to ongoing capital projects and cost pressures, Fitch still projects strong near-term profitability. The system reported an impressive earnings margin before interest, taxes, depreciation, and amortization (EBITDA) of 16.1%, with operating EBITDA at 14.4%.

The Sarasota County Public Hospital District is authorized to levy up to two mills in property taxes for its various needs, including operating expenses, debt service, and capital projects. For 2023, the actual tax levy was 1.042 mills, generating $81.9 million in tax revenue and contributing to a total operating revenue of approximately $1.7 billion.

Overall, these strong ratings and financial metrics underscore Sarasota Memorial’s solid footing and commitment to expanding and improving its services in the region.