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Fiscal Court votes unanimously to hire outside attorney in hospital sale

  • Update 10:53amCT: Magistrate Billy Rowe calls for public meeting for details of proposed sale to be aired. Judge Melton makes it clear that such a meeting would be Hospital Board's responsibility, not Fiscal Court's
  • Update at 11:12amCT: Bank representatives strongly urging sale, if - technically - not telling Board outright to do so.
  • Update at 11:08amCT: For first time, name of a likely buyer, major for-profit headquartered in Brentwood, TN, comes out in open meeting
  • Update at 3:11pmCT: Judge Melton says court will only be making sure any sale will cover all debts, and that the sale procedures are conducted in accordance with Kentucky statutes; she says decision on whether to sell or not is Board of Trustees prerogative. She asked that the public be aware of possible imposition of taxing district tax even after hospital might be sold, and to know that the sale can also result in property taxes being paid by the new owners if the new owners for-profit.

By Ed Waggener

In a brief meeting, 8am-8:25amCT, this morning, Thursday, April 26, 2012, the Adair County Fiscal Court, acting on the advice of KACO and County Judge Executive Ann Melton, with all magistrates present voted unanimously to hire an outside attorney to represent the county's interest in any sale of the Westlake Regional Hospital. The action came on a motion by Joe Rogers (6), with a second by Sammy Baker (3), with affirming concurrence from the other magistrates present, Harold Burton (1), Billy Dean Coffey (5), and Billy Rowe (7), for a 5-0 vote.

Three banks represented at meeting

Prior to the vote to hire an independent counsel for Fiscal Court, Representatives of three of the consortium of banks holding the majority of the hospital's debt were at the meeting. They encouraged the hospital, fiscal court, Spectrum Health Partners, and the community to work together. One spokesman, Terry Pew, speaking for First & Farmers National Bank, said that while technically the banks are not telling the community to sell the hospital, the lending banks do think a sale is best. Also present were bank representatives from consortium members in Casey County and Danville, KY. One, Linda Dunn of Casey County spoke in support of Pew's position. She said that she did not believe that an independent model is an option for Westlake.

(Spectrum Healthcare Partners, the interim managing firm, had prepared an analysis for the board on the outlook of the hospital as an independent entity. Dunn did not say whether that analysis was the basis of her opinion or not in the open meeting.)

Mr. Pew as well as Westlake Interim CFO Roger Klein expressed concern over a statements in "the media" which indicated that the banks had not requested a sale. That statement was made on the basis of a question on April 24, 2012, when four members of the local media listened as Sharon Burton of the Adair County Community Voice asked Ken Doran of Spectrum Care if the banks had requested the sale, and his answer was "No." However, it now appears that it is a matter of semantics, that the banks do not technically order the sale, but they are strongly advising it. A technical difference, perhaps. Present in the meeting with Mr. Doran were Mike Wilson of FM 92.7 The WAVE radio, Paul Hayes of the Adair Progress, and Ed Waggener of

Magistrate Billy Rowe calls for public meeting on proposed sale

After the vote, Magistrate Joe Rogers told the court and the audience of his concerns and reason for moving to hire an outside attorney. . "This is a great big step for the county. We need all the help we can get."

Magistrate Sammy Baker, who voted for the measure, said, "I support what we have to do," without elaborating.

But Magistrate Billly Rowe (7) expressed anger at the Hospital Board because they had not followed through on promises to him and to Magistrate Billy Dean Coffey, the two magistrates who sat on an offers screening committee along with Hospital Board Members John Nall and Bruce White. "We left the last meeting (of the screening committee) with the understanding that the offers would be made public and that there would have been a vote at the last hospital board meeting (Tuesday, August 24, 2012), and that didn't happen."

Magistrate Billy Dean Coffey (5) was asked by Judge Melton if he had a comment and he did not.

Rowe went on to say that, in his opinion, there needs to be one public meeting where everyone in the county who wants to can hear the details of the proposed sale and comment on it.

To that, Roger Klein said he'd welcome the opportunity to discuss the matter at anyone at the May 8, 2012 regular meeting of the court. The Hospital Board has been hoping to get a vote from the court that it approves of the structure on the deal at that time.

However, Judge Melton told Mr. Klein that she didn't think such a meeting would be appropriate as part of the regular session, and indicated, for one thing, that the basement meeting room would not accommodate the crowd.

Mr. Klein then said the hospital would be happy to appear at such a meeting anytime the Judge and Court would set one.

But Judge Melton tossed the matter back to the Hospital Board. "The meeting would be up to you all. It would be your decision on that."

Life Point Hospitals name mentioned in open meeting:

For the first time, the name of the most likely buyer, came out in an open meeting:LifePoint Hospitals a for profit group of Brentwood, Tennessee. LifePoint's closest hospitals are Springview in Lebanon, KY; Lake Cumberland Regional Hospital in Somerset, KY, and Logan Memorial Hospital in Russellville, KY. The company has a total of 9 hospitals in Kentucky. See LifePoint Hospitals, Communities we serve.

Judge Melton clarifies what is county's, what is hospital boards roles, authority

Judge Melton Melton said that her obligation is to see that the county is 1) Paid in full immediately at the time of the sale for the $1.7 million in bonds issued earlier this year as stipulated in the agreement with the Adair County Hospital Board of Trustees. 2) She said that, at the time the sale is paid, a plan must be in place to pay all outstanding debts of the hospital, including current ones.

She said that Fiscal Court does not have authority to direct the board on the sale. Once appointed, she said, that decision is the Adair County Board of Trustees.

She said that it the County Government has a responsbility to the taxpayers to see that the transaction is open, that the proceedings meet the Kentucky statutes on open meetings and applicable sunshine laws.

She added that it is she wants the public to know that the taxing district for the hospital might re-impose taxes even after the hospital is sold. She said that the plans she has heard about for the purchase are about $4.5 million short of what's needed to satisfy all debt, including current accounts payable. She said that it would not be acceptable to her for the county to be left liable for the shortfall, or that the new owners plug the longterm payout plan by saying that the taxing district revenues pay the difference. In the meeting, she said that might take 40 years or more.

She asked, after the meeting, that citizens know a benefit of a sale to a for profit hospital is that the new owners would be subject to local property taxes, which Westlake now does not pay because of its non profit status. That, she said, would benefit the county and city governments, the school district and the institutions in the special tax district.

This story was posted on 2012-04-26 08:44:27


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