Sarasota hospital district earns ‘AA-’ ratings

The Sarasota County Public Hospital District, which includes Sarasota Memorial, earned “AA-” ratings on outstanding revenue bonds from Fitch in the credit agency’s most recent review.

The ratings reflect Sarasota Memorial’s “leading market position in a growing service area, robust historical operating cash flow levels and strong liquidity position,” according to a statement from Fitch.

Contributing to its strong position is the fact that Sarasota Memorial is the leading provider in the area, with a 71% combined market share in FY 2023 between Sarasota Memorial Hospital's main and Venice campuses, according to a statement.

Fitch says it expects the health care system to remain a regional leader "bolstered by its ongoing strategic capital projects,” such as 34 new rooms opening at the Venice hospital by the end of 2024, bringing its total number of beds to 212; an outpatient cancer pavilion coming to Sarasota in 2025 plus a possible future outpatient cancer center at Venice; and a hospital in North Port in the master planning stage.

Capital spending should “continue to be elevated but controllable, at approximately $1.3 billion through fiscal [year] 2028,” according to Fitch, which says the potential North Port hospital project would be “largely financed with bond funds in late 2025.”

Over the next few years, Fitch anticipates liquidity and operating metrics to soften incrementally due to ongoing capital projects and expense pressures, the statement says.

The health care system reports that earnings before interest, taxes, depreciation and amortization had a margin of 16.1%, while operating EBITDA had a margin of 14.4.%.

“Near-term profitability levels are expected to remain robust although below historic results due to continued cost pressures and capital plans,” Fitch says.

Sarasota County Public Hospital District, which includes Sarasota Memorial, is authorized to levy up to two mills in property taxes for the operating expenses, debt service, capex and acquisition of property, according to Fitch, which reports its actual tax levy in 2023 was 1.042 mills. The health care system posted tax revenue of $81.9 million and total operating revenues of approximately $1.7 billion for fiscal year 2023, according to Fitch.

This story has been updated to correct the number of beds at the Venice hospital.