Practice Scenario: You represent the management team of Cactus Spine Medical Center in rural southeastern California. The 105 bed hospital has been operating in the same building since opening in 1957. In 2005, it undertook a $20,000,000 renovation funded with a bond issue with a level annual payment over twenty years at 7.25% interest. The building is beginning to show its age after nearly fifteen years and is facing about $9,000,000 in renovations including a new roof, generator, chillers, and boilers - along with some structural upgrades noted after a recent minor earthquake. The latest financial statements for the hospital as of its fiscal year end on December 31, 2019 are included as an attachment. The hospital pondered refinancing its debt a year ago and received a tentative BBB rating from Moody's. Assume that rating would still be applicable today. Research the current interest rates for a Moody's Baa rated organization and evaluate the following decision. You have been warned by regulatory inspectors that if you do not have a plan in place to remedy the building issues noted here within the next year, they will propose revocation of the hospital license. The Joint Commission made similar comments in its re-accreditation visit this past year. So you are spending that $9 million. The question is, what to do about the other $20 million? Maybe you just want to "punt" and sell out the Primary Health Corporation since they have expressed interest in acquiring your facility at a price of about $3 million plus defaseance of debt. (HINT: don't do that) What would you recommend to the governing board about how to get the required renovations financed - and why? Use the financial statement below.