Ameris only company to answer hospital RFI

........................................................................................................................................................................................

Belen city officials are in the midst of reviewing information received from one medical provider/contractor for the proposed Belen hospital.

Ameris Management Services LLC, a Nashville company, was the sole company to respond to the request for information and qualifications issued by the city last November for the proposed hospital project.

The RFI was put out to identify a medical provider interested in developing, managing and operating the proposed Belen hospital. Companies had until Feb. 1 to respond to the RFI.

Ameris is the same company that was paid $49,999 by the city of Belen last year to create the site-specific feasibility study for the city-owned Christopher Road property.

Other companies, such as Hammes Consulting, a Wisconsin company providing health care consulting services, and construction companies PCL Inc. and Kitchell showed interest in the project, but decided not to apply since Ameris has been involved in the project "for so long," said Steve Tomita, the city's spokesman.

"They probably felt that they needed more time to put a team together and get information together that other teams (such as Ameris) already had," he said.

The city expects to finish reviewing Ameris' proposal, along with a draft of the health care facilities contract between Valencia County and the hospital management company, by mid-February, Tomita said.

In Ameris' response to the RFI, the company provided additional information to the feasibility study, Tomita said, but didn't give details.

The "most qualified responder" will then be recommended to the Valencia County Commission, and the city will provide a draft HCF contract for the commissioners to use if they chose.

Mike Vinyard, the county procurement officer, said he would need to review any contract the city brought to the county for consideration, as well as review the city's procurement process to make sure it was in compliance with New Mexico procurement code and all other government policies before making a recommendation.

"Not having seen all of that, I can't really comment," Vinyard said.

Belen's RFI says the city has authorized and prepared, at its own expense, a hospital feasibility study indicating that a hospital is viable "if located on a specific parcel of land made available by Belen."

However, the study offered in the online procurement library for the RFI is not the version the city paid for — it's the preliminary draft Ameris presented to the city council in June of 2011, shortly after Valencia Health Commons terminated its contract with the company.

The RFI, found on the city's website, is listed alongside a number of "informational documents," Tomita said.

Tomita said he wasn't sure how the documents got mixed up.

"I was a given a copy of the feasibility study and it posted," he said.

Councilor Jerah Cordova said he wasn't sure if this was a technical error on the part of the individual who put the RFI together or how the mix up occurred.

Cordova said he wasn't aware of this issue until the News-Bulletin asked him about it.

Including this document in the packet of information to companies "wouldn't have any impact" on who submitted proposals for the proposed hospital project, Tomita said.

Interested parties were given a copy of the feasibility study to demonstrate what the city found, but were told they needed to determine on their own if this project was feasible, he said.

"They have to determine on their own whether the hospital site in their mind's eye is feasible," Tomita said. "We did (the feasibility study) for our benefit to ensure ourselves that (the proposed hospital) is feasible, but we're just providing the informational document."

The city held a pre-proposal meeting in December to answer questions interested parties may have had about the proposed hospital project.

Those in attendance were representatives from design firm Dekker/Perich/Sabatini, contractor Tutor Perini Corporation; land development consultants from David B. Starr, LLC, general building contractors Bradbury Stamm, construction company Kitchell and business enterprise investment bank Stern Brothers & Co.

After a page-by-page comparison between the electronic document posted on the city's website and the hardcopy of the draft study the News-Bulletin has had on file since June of 2011, it appears the two are nearly identical.

The electronic document has been edited to re-order the pages, moving information such as the biographies of the Ameris management team, letters of support, the number of surgical discharges and projected payroll figures closer to the front of the document.

There also appeared to be two pages missing from the electronic document. The first excluded page explains that the financial forecast in the document is the hospitals's "expected financial position, results of operations and cash flows" for the forecast period of 2011 through 2015.

The disclaimer goes on to note that the assumptions are based on the hospital management's judgement and there is usually a difference between the forecast and actual results.

The second missing page is titled "Projected Debt Service Payment Fund," and shows the interest and principal payments on a $40 million bond, starting in October 2011, and ending in December 2015.

The draft study posted on the city's website gave an overview of the hospital project — a 50 bed, 100,000 square-foot hospital with single-patient occupancy rooms with views of the outdoors.

That document also references Ameris numerous times, noting that the company "will" be running the day-to-day operations of the hospital, whereas the study completed in 2012 used the language "assuming Ameris is chosen" it would have full oversight of the facility.

That varying language was consistent between the June 2011 draft and the completed 2012 study, with the earlier version stating that Ameris will recruit and hire an executive management team as well as a chief executive officer, chief financial officer and chief nursing officer.

The 2012 version of the study uses terms such as "Assuming Ameris is chosen …" and "If chosen, Ameris shall …" in reference to those activities.

The completed study also shrunk the facility, scaling it back to 40 beds and 90,000 square feet.

County administrative staff indicated that the 115-page draft study was received by the county on Oct. 16, 2012, after it was requested by the finance department following the signing of the joint powers agreement between the county and the city.

In April 2011, rumors surfaced that Ameris was concerned about the viability of the hospital on the Rio Communities site, east of the river. The company was contracted with Valencia Health Commons at that time to develop and manage a hospital on that site.

Former Belen City Councilor Lorenzo Carrillo said Ameris came to the city with concerns about the site, but VHC President Bob Davey said Ameris never expressed those concerns to his board of directors.

When asked if there were concerns about the site and discussions with the city, Ameris representatives side-stepped the question, issuing a written statement sayings Ameris would serve as the developer and manager of the proposed new hospital, and the company's first task was to update a full feasibility study for the facility.

Then in early May 2011, Ameris spoke up, via a two-page memo to the VHC board of directors and the Valencia County commissioners, saying the company "cannot in good faith support the Rio Communities site as being the best site for a successful hospital."

Dated May 3, the memo concluded the most successful option would be to select a site "in the northern half of the county with the closest proximity to Interstate 25."

Later that month, VHC pulled the plug on its contract with Ameris.

During a phone interview Thursday, Davey said there were two basic reasons the board terminated its contract with the Nashville company — despite being contracted to produce a feasibility study on the Rio Communities site, Ameris had yet to produce even a preliminary draft document, and the memo abandoning the eastern site.

And Ameris never offered any documentation to back up its assertion that the Rio Communities site wasn't viable, Davey said.

He said between September 2010, when Ameris signed the contract with VHC and the time Sam Lewis, CEO of Ameris, went before the city council, Ameris was still holding on to some incorrect financial assumptions.

"That the mill levy could be used to develop a hospital and it would be renewed," Davey said. "We disabused them of that immediately, but it's still in there."

Since Ameris didn't produce any documentation for VHC, Davey said he wasn't sure if the study posted on Belen's website was the product of the contract between the two companies.

"Given the timing, and the timing was really funny, you could speculate that it was," he said.

Davey is currently working with Miller Architect to develop a hospital in Los Lunas.

"There are apparently two studies out there, one from 2011 and one from 2012," he said. "There aren't a lot of differences, but there are similar flaws with the financial assumptions."

The version of the study Belen officials uploaded to its website notes that the assumption is the mill levy will be reauthorized.

"The proceeds of the (mill levy) will be used to fund the interest and principal on the bond debt," the study indicated.

The "funny timing" Davey referred to was the fact that in June 2011, a month after losing its contract with VHC, the city of Belen invited Ameris to a council meeting to present the findings of its feasibility study.

Lewis presented the company's preliminary feasibility study to the councilors and public, saying there is "more than enough business in Valencia County" to support a hospital.

Lewis also referred to the document he gave the city as "a good start" and noted that the study was not based on one particular site.

Moving forward from there, Belen announced a collaboration with Ameris to finish the feasibility study in 2011. The city contracted with the company for $49,999 to complete the study.

The finished product presented by Ameris was 150 pages and dated Feb. 15, 2012. The contents of the completed study weren't made public until April, when city officials presented it to the county commissioners.