Consensus: Counter-proposal to St. Mary's
HUNTSVILLE — While not putting it to a formal vote, the consensus of County Commission’s Hospital Committee is to formulate a counter proposal to St. Mary’s lease-purchase proposal.
Meeting in a work session at the Scott County Office Building Monday night, five of the six members of the committee stated they wanted to meet to discuss the seven-point proposal submitted by officials of Mercy Health Partners (St. Mary’s) and offer them a counter proposal.
One by one, committee members (Jeff Watson, Ron Blevins, Willie Boyatt, Alan Reed and Paul Strunk) all said they favored a counter proposal, while County Attorney John Beaty, an ex officio member of the committee, did not publicly state his preference.
During a Dec. 22 work session with the commissioners, Mercy Health’s CEO Debra London outlined a seven-point proposal, consisting of a 20-year lease of the local hospital for $500,000 a year, with an option to purchase the facility for $1 million at the end of the lease period.
Other provisions included paying the first two years’ lease payment up front; retaining the right to withdraw from the lease agreement upon a one year’s notice; committing to invest $5 million for capital improvements during the first five years, and $500,000 thereafter; and a complicated alternative: If Mercy decided to construct a replacement facility, all lease payments would be stopped upon completion of the facility, or, if at any time during the lease period, Mercy substantially renovates the existing facility, lease payments would be reduced to $100,000 a year for the remainder of the lease. The “substantially renovated” clause was defined as a capital investment of at least $10 million.
Anticipating the committee’s reluctance to accept Mercy Health’s proposal as presented, County Mayor Rick Keeton opened Monday night’s meeting by handing out what he called a “survey” — a three-page document listing the various points of Mercy’s proposal, followed by suggested alternatives (as well as a blank for the committee members to make their own suggestions).
In so doing, Mayor Keeton said he felt the committee ought to meet within the next two weeks “to act on these points” or add their own.
“I’d like you to consider this as a survey,” Keeton stated, adding that a consensus needed to be reached.
While committee members scanned Mayor Keeton’s “survey” or “talking points,” as he once referred to them, Commissioner Watson asked County Attorney Beaty if the Hospital Committee could meet in a closed session since it was negotiating a contract.
“No, I don’t think so. There has to be some sort of litigation, or something confidential,” Beaty replied.
“This is something that would be confidential,” Watson said, adding that he felt the committee should be able to discuss things “the other side don’t know.”
Beaty responded by saying that he would check the law (and the County Technical Advisor Service), but he didn’t think it would be allowed.
Watson then proposed the possibility of the county hiring “a financial advisor group” to help the committee determine the value of the hospital.
Beaty said that he knew of “two or three” firms he could contact to see if it was possible.
Watson then asked Beaty what the ramifications were if the committee decided to ignore the state’s open meeting law and discuss the hospital lease contract in a private meeting.
In answer, Beaty reminded Watson of what happened in Knox County recently in the wake of Sunshine Law violation charges against members of the county commission.
Watson said he was “not opposed” to St. Mary’s or its long-term lease proposal, but simply wanted to “make sure we have knowledge of what we’re doing . . . . How can we possibly know the value of what we’ve got without help from somebody?” he asked.
The discussion then took a new direction when it was revealed that a number of people had been calling the commissioners expressing fear that the hospital would be closed down if an agreement was not arrived at soon.
“The fear factor is the biggest thing we face,” said Commissioner Strunk. “We need to dispel that.”
Watson also pointed out that a full year remains on St. Mary’s contract with the county.
It was near the end of the discussion when Mayor Keeton reminded committee members that “ultimately, we’re looking at the future of health care for years to come,” adding that he local hospital is a great resource for Scott County.