Belen, LL ask for hospital mill levy funds
The dueling hospital proposals didn’t bring much new information to light Wednesday evening, but Valencia County commissioners were quick to draw a hard line concerning the mill levy funds both developers are seeking.
Representatives of the proposed hospital projects in the city of Belen and village of Los Lunas came before the commissioners to give an overview of their projects, and to sway the five-person board in its ultimate decision on who will be the recipient of what could end up being nearly $22 million in taxpayer funds.
Belen officials have been working to develop a hospital on 14 acres it owns on Christopher Road since 2010, while Miller Architects of Oklahoma jumped into the mix last year, entering into an exclusive agreement with Los Lunas to study and build a hospital on 18 acres west of Interstate 25.
Developers for both projects had an hour to pitch their idea and answer questions. More than 60 county residents crowded into the meeting room to listen, leaving some to stand outside the doorway, listening to the discussion via speaker.
In the end, two commissioners pointedly reminded everyone involved that any decision about the mill levy starts and ends with the county.
Commissioner Mary Andersen said in her reading of the hospital funding act, a company can’t even make a request for the funds until the facility is licensed.
“So long as I have enough breath in my body to get two other votes, no one is getting that money until the doors are open, and no one is getting one lump sum,” Andersen said.
Frank Schupp, the vice president for business development for Ameris Management, said historically, “substantial completion” is about 30 to 45 days before a hospital begins taking patients.
Schupp also sits on the board of directors for Ameris Acquisitions, the newly formed sister company of Nashville companies Ameris Management and Ameris Health Systems. Ameris Acquisitions was the only company to respond to Belen’s request for information and qualifications to find a hospital developer and manager.
“And it won’t be transferred, not a dime, before the door is opened,” added Commissioner Alicia Aguilar. “I think the definition of ‘substantial completion’ can have various opinions.”
Andersen told Schupp, as well as Darrin Miller with Miller Architects, that the commission wanted to see a five-year business plan for both projects.
“I want to see the revenue for the first couple of years and how much of the mill levy funds you will need each year to keep the doors open,” she said. “We are talking about taxpayers’ money, and we, as a commission, sit here and agonize over how to spend any of it. We are not going to spend $15 to $16 million without seeing a business plan.
“I want this community to have a successful hospital, not see one that will close in three to five years. I am scared to death about that.”
Both Schupp and Miller said the request was fair and agreed to provide the financial projections.
Turning to the financing of each project, Aguilar asked Schupp if a letter from Stern Brothers, the company that has agreed to help secure up to $50 million in private bond funding for the Belen project, was referring to revenue bonds from the county.
Belen City Councilor Jerah Cordova said all the money used for construction would be private funds and there would not be a need for industrial revenue bonds through the city or county.
Aguilar pointed out that in the Belen feasibility study, the joint powers agreement between Belen and the county and in the state’s response to that JPA, the idea of bonds being floated by the county or city is expressed as a possibility.
“If the commission decides not to do bonds, why is this even on the table? I don’t want to see someone come back later and say, ‘Commissioner, it was an option,’” Aguilar said, brandishing the letter from Stern Brothers. “This is a wonderful hospital that someone else constructs. We (the county) don’t want to be in the hospital construction business.”
Schupp said if his company were involved, it would not come to the county and ask it to use its bonding capacity to build a hospital.
Andersen asked who owns the hospital building once the money is repaid. Schupp said since the land was being leased from Belen, traditionally under that scenario, the building and equipment would revert back to the city.
Touching briefly on the legal status of the project, Belen’s attorney Marcus Rael said a revised JPA, along with a letter addressing concerns expressed about the agreement by the New Mexico Department of Finance and Administration had been sent to DFA on Feb. 11.
“It’s important to note that DFA did not deny the JPA. They simply asked for clarification on several issues and those were provided,” Rael said.
The county entered into the JPA with the city in September of last year. Last month DFA issued a letter in response to the agreement.
“DFA cannot approve of the JPA at this time, since our review has raised several potential issues that require additional analysis by the parties and/or revisions to the JPA,” summarized the letter.
Rael said it was also important to note that the JPA was “still in full force and effect between the city and the county. The city of Belen has expended significant funds on this project. We feel that the JPA is a binding contract …”
The attorney said the last step under the JPA is the finalization of the health care facility contract between the county and the company that will manage the facility and ultimately receive the mill levy funds.
While the HCF contract may be the last step, according to Rael and the JPA, there is still a very important step that has not been taken.
According to the agreement, the county has to verify the city’s feasibility study. The county can either verify the study internally, using its own staff, or by contracting with a third party.
At this point, the commissioners haven’t discussed which method they would like to use to vet the study, let alone verified the document.
There is also the issue of which study the county will be asked to verify. The city has two different versions of the study.
One is a draft that Ameris Health Systems created for the former Valencia Health Commons and is not based on a specific site. This study was part of the procurement library for the city’s hospital RFI.
The second version is the site-specific study that was released last year, after the city paid Ameris Management $49,999 to complete the work it started for VHC and focus on the Christopher Road site.
Following Miller’s presentation, Aguilar asked whether the Lovelace-managed facility would accept patients with Presbyterian insurance.
Janelle Raborn, the chief operating officer at Lovelace Women’s Hospital, said they would “love to provide services” to those patients, pointing out that in emergencies, care is provided regardless of insurance.
“For things that are scheduled, a patient would need prior authorization from their (insurance),” Raborn said.
She continued, saying a primary care physician could be housed in the Los Lunas hospital and that doctor may accept all insurances.
“That is up to each physician, what insurance they carry,” she said. “They usually look to carry as many products as are in a community.”
Commission Chairman Charles Eaton asked if Miller or Raborn had talked to Presbyterian Health Services about the proposed hospital.
“We haven’t, but Presbyterian has made their position clear — they feel a hospital is not needed,” Miller said. “That’s an opinion we differ on, obviously.”
All the funds for the Los Lunas hospital would be from private investors and construction would not require IRBs from the village or county, Miller said.
Pointing out that both of the proposed hospitals were located west of the Rio Grande, near Interstate 25, Andersen said she was extremely concerned about the 40,000 people who lived east of the river.
“There are two bridges across, and Highway 6 is a parking lot for four hours of the day,” Andersen said. “If we were to specify something like an east side paramedic station with EMTs, somewhere to stabilize people before bringing them across the bridge, how would you react? If you are given the mill levy, will you commit to that?”
Miller said that kind of satellite facility wouldn’t be possible immediately, but if certain demographics were met and there was a need in an area, he would be willing to build east of the river.
Andersen said she would like the commission to make the commitment to satellite facilities as part of any agreement the county signed.
And speaking about previous attempts to start a hospital, Andersen said there wasn’t a great deal of transparency, and asked Miller if he and his company would be willing to keep the commissioners informed and to give frequent updates on the project.
Aguilar said she would like all reports done during public meetings before the whole commission.
“If we are the recipient of the mill levy, we owe it to the commissioners and the residents to report that way,” Miller said.
Assuming an immediate start, Belen would be opening its doors in late July 2014, and Los Lunas in the fall of 2015.
The only person to speak about the hospital project during public comments was Andrew DiCamillo, executive director of the Greater Belen Economic Development Corporation.
“The lack of a hospital is what is fundamentally holding us back from economic development,” DiCamillo said. “I have continued to work for a hospital with the corporation.”
DiCamillo was Belen’s planning and zoning director for five years and intimately involved in the development of the hospital. The city fired him in April of last year.
DiCamillo announced that the GBED board has decided to form a foundation to support a hospital, regardless of where it is located or who builds it.
“I think as Valencia County citizens we are just going to be glad we’re doing something,” he said. The separate foundation would provide things to the hospital such as chapel services and assistance to veterans.
“That is the commitment of the board to the economic development of the county,” DiCamillo said.
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