Montrose sues hospital trustees over stealth action
The Montrose County Commission on Monday sued the trustees who run the county hospital, hoping to reverse the trustees’ decision to lease the hospital to a private nonprofit corporation.
Trustees, meanwhile, said they couldn’t comment directly on the suit, but said they had three main reasons for their actions, not least of them to head off a raid of hospital assets by the commission to pay for a hangar to lure an aircraft company.
A side effect of the hospital transaction “was the most desirable side effect of removing the hospital from the politics of local government,” hospital Trustee Bill Bennett said, noting that the trustees fear a raid of hospital assets.
The commission is seeking an injunction from Montrose County District Court pending a hearing before the court. The lease is to be complete by Monday at the latest.
Commission Chairman Ron Henderson said the hospital trustees’ fears were unfounded and called them “preposterous.”
The commission is seeking an injunction pending a hearing in court on the lease.
“All we want is a legitimate public vetting” of the agreement with the county commission and public involved, Henderson said, “It has not happened properly.”
The hospital’s assets are in no danger from the effort to provide an incentive for the German-based manufacturer, Extra Aircraft, with a $2 million hangar, Henderson said.
“That comes from other sources,” Henderson said. “It’s a totally different issue.”
The trustees maintain they are on solid legal ground, said Bennett, a businessman, and retired U.S. Marine Corps officer who has served on the hospital board since April 2009. He was appointed by the members of the current board of commissioners, as are four other members of the seven-member board, Bennett said.
The hospital board set up a private, nonprofit corporation to which it will lease the hospital and its assets.
While part of the reason for the agreement was to insulate the hospital and its assets from raids, Bennett said, it also was intended to protect the ability of the hospital to offer federal tax benefits to donors. It’s also aimed at allowing hospital to borrow money for terms longer than would be allowed under Amendment 61, which is on the Tuesday ballot.
“We can’t borrow without getting into bonded indebtedness,” Bennett said. “I can just imagine putting a proctoscope on the ballot.”
The hospital board was reacting to warnings “several months ago” by the commission about the draconian threats of Amendment 61 and took action to put the hospital beyond the reaches of the amendment’s proposed limits on borrowing, Bennett said.
The hospital has “$2 million at stake” and with anywhere from $7 million to $9 million going through its accounts a month to and from Medicare, can hardly afford any slipups, Bennett said.
“We’re one of the 20 percent of hospitals in the country that is in the black and we want it to stay that way,” Bennett said.
The commission’s request for an injunction also is aimed at staying the hospital board’s agreement with Quorum Health Resources LLC to extend the contract from 2018 to 2021.
The commission maintained the agreement was “never discussed by all of the trustees nor was it shared with the public.”