County enters into hospital agreement

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After a lengthy plea from a county commissioner to allow hospital mill levy monies to be split evenly between competing hospital projects, commissioners ultimately voted 3-2 to enter into a joint powers agreement with a single municipality.

Commission Chairman Donald Holliday made the motion to enter into the JPA with the city of Belen.

"This has been on the table for four years now," Holliday said. "I know Los Lunas wants us to hold off, wait six months."

Commissioner Georgia Otero-Kirkham seconded the motion.

Before the vote, Commissioner Ron Gentry asked for discussion, saying he wanted to "discuss the matter somewhat at length."

Gentry asked if the other commissioners had received a letter from Los Lunas, asking the commission to "consider the project on board right now. I hope you all read it."

Last week, architect Darin Miller out of Oklahoma, presented his company's final findings on a Los Lunas hospital. Miller informed the village council that the project was feasible and they would begin construction in the spring of next year.

Gentry said he wanted to offer an amendment to the Belen JPA, "in good faith. It looks like everything flat wired to the ground. And if that's the vote, I'll go along with it."

The commissioner said by approving the JPA with Belen, they were "sending the message that this county wants to build and finance a hospital."

He noted the county's recent cash flow problems and the transfer of $1.5 million out of an investment account to keep things afloat.

Saying that the county seemed to have "all kinds of financial issues," Gentry said the JPA requires the county to obtain financing and development of a hospital on the Belen-owned site.

"You are going to move into a county-owned hospital, if you can ever build it," he said.

Gentry said the project was still in the conceptual stage, and called the mill levy "the big fly in the ointment."

"We have the money there, the carrot is there," he said.

Gentry said there is a hospital that Los Lunas has been working with that is almost to the construction stage.

"What's amazing to me is, just like the hospital in Rio Communities that was two weeks away from signing the documents, three commissioners voted to kill that contract," he said. "Now, we are two years down road and we have the Los Lunas hospital."

He continued, saying there was an article in the News-Bulletin on Wednesday laying out construction dates for the Los Lunas project.

"Now this commission jumps up and pulls the mill levy away," Gentry said. "There are certain elements here who don't want a hospital. I am not opposed to Belen and I have told them, but they have to have a plan."

The commissioner said hopefully the commission's decision to enter into the JPA with Belen wouldn't won't dissuade the Los Lunas hospital.

"People are going to get tired of investing in this community if the county commission gets squirrelly two weeks before a project," he said. "I don't think that's the legacy you want."

Gentry said the JPA, in its current form, could be challenged and would not survive economically.

"Taxpayers all over the county have accumulated the mill levy — Bosque Farms, Peralta, Los Lunas. We've heard all these years that's where the biggest part of the tax comes from," he said. "I want to make sure the people in the northern part of the county have a voice in how their tax money is spent."

He proposed adding one paragraph to the JPA stating that the board of county commissioners "shall in equal proportions, divide the mill levy" between the Belen contractor and any other legal health care facility or emergency room in Valencia County.

"It doesn't say we don't support Belen or change their plan," Gentry said. "It also gives Los Lunas, Bosque Farms and Peralta the same amount of opportunity when their hospital opens in Los Lunas to participate in the use of their tax money."

Gentry predicted the Los Lunas hospital would be open and functioning before a plan was even put together for the Belen project.

"It would be a shame to commit the money collected to an entity down in Belen," he said. "It would be great to have the hospital in my district and have all the tax money go to my district. But if Belen doesn't produce in three or four years, we may have lost this one in Los Lunas."

His amendment to the JPA would split the mill levy money in equal proportions only when an appropriate facility was built.

Commissioner Lawrence Romero seconded Gentry's amendment, asking for some clarification.

"This would be 50 percent for the north and 50 percent for the south," Romero asked.

Gentry said if his amendment was accepted, the mill levy money wouldn't be committed to only one facility, but split equally amongst the "two on board. If they both succeed, we give them each $12 million for operations.

"It doesn't use all the tax money against a free enterprise facility in Los Lunas," he said. "If one or the other fails, it's up to the commission to allocate later one when something opens. If they both fail, the mill levy stays within the control of the commission."

Holliday called for a vote on Gentry's amendment to the JPA. Gentry and Romero voted yes, while Holliday and Otero-Kirkham voted no. Commissioner Mary Andersen remained silent.

On the apparent 2-2 split, Holliday declared the motion defeated and called for a vote on his original motion to accept the JPA.

He, Otero-Kirkham and Andersen voted in favor, while Gentry and Romero voted no.

Holliday commented that if the county split the money, it was "asking for trouble."

During a phone interview Friday, Belen Councilor Jerah Cordova said, "The city is very excited and appreciative that the county commission has given us the opportunity to move the project forward. We will work diligently and quickly, but also ensuring that we get every step in the process right."

The city originally drafted a proposed JPA in April, Cordova said. It was approved by the council and sent to the commission. After review by county and city attorneys, the JPA was redrafted, reapproved by the city council and sent back to the commissioners.

One of the issues identified in the first JPA was the formation of a nonprofit board and board of directors to run the hospital.

"The county attorneys did not want the county or city involved in the formation of the nonprofit board," Cordova said. "They were concerned it would be a violation of the anti- donation clause because they would be participating in the formation of a board for a private entity."

The JPA approved Wednesday doesn't spell out how the hospital will be governed.

"There isn't a process specifically determined on how the board will be formed," Cordova said. "We will have to wait for that point in the process.

"I think it's in the best interest of the provider and the hospital for the board to be made up of locals who have a deep interest in seeing it succeed."

There needs to be some minor corrections to dates made in the JPA, Cordova said, and after that, the county needs to acknowledge that the Belen site is feasible, then go through the process of issuing a request for proposal for a developer/provider for the project.

Once a developer/provider is selected, both entities must approve a contract with the company.

According to the JPA, the county has to validate the Belen feasibility study, either by an internal review or by hiring a professional consultant. The agreement also allows for both the city and county to issue revenue bonds for the project, including the expense of constructing and equipping the hospital.

It says that as part of the Health Care Facilities Contract RFP, offerors have to provide a financing plan for the construction and equipping of the hospital and address whether the issuance of bonds by the city or county will be "requested or required by the offeror …"

Cordova said the city had a letter from Chicago-based bond company Stern Brothers explaining exactly what it would need to finance the building of a hospital.

The councilor said he couldn't remember all the requirements, but did say one was that they needed a commitment of the mill levy money.

"They want to see the county is invested and the city is supportive as well, that all the players are in place and ready to go," Cordova said.

Stern Brothers has previously offered financing up to $50 million to other entities trying to build a hospital in the county.


-- Email the author at jdendinger@news-bulletin.com.