Dateline: March 27, 2008

Board answers more MCNH sale question

Half a dozen citizens attended last Tuesday’s meeting of the Donley County Hospital Board, seeking more information about the pending sale of the Medical Center Nursing Home.

Board Chairman Alan Fletcher welcomed those in attendance and noted that the occasion marked only the second time in two years that someone had shown up to address the board on this issue. He also said the board was glad to have any questions.

“We don’t want there to be any unanswered questions about this sale,” Fletcher said.

Jim Philley of Clarendon led the questions and began by asking who the real estate firm is that is representing the buyer of the property.

The board said there is no real estate firm representing the buyer. Clarendon Realty, LTD, is the buyer according to the contract, but that is not a real estate firm of any kind. It is the name under which Community Care Management Services of Denton is doing business in Clarendon, Texas.

Philley also asked about the term of the agreement with the nursing home broker in Houston, to which the hospital district will pay a commission when the sale is completed. Fletcher responded that the agreement is still in place because the district never terminated the agreement. Therefore, the commission must be paid.

The refunding of $190,000 of the purchase price was the subject of Philley’s next question. He said he understood the buyer needed that money to operate on initially, but he asked if the money was going to be returned to the hospital district at some point.

Fletcher said it would not be returned to the hospital district and explained how the contract figure of $1.25 million was derived.

“Our asking price was one million sixty thousand,” Fletcher said. “It was their idea to add the extra money for operating funds.” This, he said, saved the buyer from having to get two loans – one to buy the property and one for operating capital.

Philly then inquired about the financial health of the nursing home, noting that the district paid $90,000 cash for a new roof and is paying $400,000 cash for the new addition.

“We had $490,000 on hand, but we were told the nursing home was in trouble,” Philley said.

“The nursing home is in trouble,” Fletcher responded.

Board member Mark C. White said MCNH has a projected budget surplus of $5,000 this fiscal year. However, an increase in the federal minimum wage will drive up all wages and cost MCNH about $50,000 in the next two years, plus other expenses are expected to rise about three percent.

“Our $5,000 surplus is going to become a $95,000 deficit in two years,” White said.

Billie Shaffer asked how the district could borrow its way out of debt. Fletcher said on April 1 the hospital district will lose about $1 million worth of debt for the public. White said the proceeds of the sale will be placed in a trust with enough extra money (about $375,000 in borrowed money) and set up so that the interest earned will offset the interest owed on the bonds, and the bonds will be called and paid off in 2011.

“My personal goal is to be debt free in 2011 and reduce hospital district taxes by about 30 percent,” White said.

(Editor’s Note: In late breaking news this week, White says it now appears the district will not have to borrow any money to put in the trust and that the district will be debt free in 2011 and possibly have about $150,000 in the bank.)

Philley said he would like to see the hospital district abolished once it is debt free.

White said the district should not be abolished; it should be kept intact to pay for indigent care and to continue to operate a top-notch ambulance service. He also cautioned that taxpayers could actually end up paying more in taxes if the county took up those responsibilities.

Dr. Richard Sheppard, who operates a dentistry office in Clarendon but lives in Booker and serves on the hospital board there, said he understands the board’s situation regarding the financial future of MCNH. But he said he felt the board had made a mistake selling the nursing home and that quality of care would suffer. Sheppard also said he was concerned about what the sale of the professional services building would mean to him personally after his lease in the facility runs out.

Jean Stavenhagen also addressed the board about quality of care concerns.

New administrator Billy Ray Johnston said maintaining the high quality of care at MCNH was his chief priority.

In other business, the board canceled the district’s May election as all races are uncontested.

The board also heard a report from ambulance service director Anna Howard, who addressed the area-wide shortage of paramedics and how that was impacting the Associated Ambulance Authority. Openings are available even in Amarillo, and the shortage in the workforce is driving wages higher.

Area ambulance services are paying higher wages and offering benefits, and the hospital district will have to deal with that as time goes by. Two fully staffed ambulances are essential to serving Donley County, Howard said.