Oktibbeha County supervisors approved service agreements with legal firm Butler Snow and hospital consultant Ted Woodrell Monday as the board moves closer to exploring a possible OCH Regional Medical Center transaction.
The two split votes met resistance from District 1 Supervisor John Montgomery and District 3 Supervisor Marvell Howard, who questioned the merits and cost of hiring both a legal firm and Woodrell to develop a future request for proposals for the publicly owned health care facility.
Although supervisors now have a team in place to write an RFP, the board has yet to take official action to start the process.
Woodrell’s deal is a two-part contract for advisory services ahead of and during a potential transaction, which includes “management of the sales/auction process and transition of OCH operations” to a buyer, the document states.
He will receive $250 per hour for consultation time for “services provided until a referendum is held on the sale or lease of the county’s hospital,” it states, and then receive $90,000 — paid in monthly, $15,000 installments — if the board chooses to initiate an RFP process.
Butler Snow, which the board hired as its legal counsel for hospital issues last meeting without having a contract on the table at the time, will bill the county by the hour for its services.
The county could pay almost $1,000 per hour for representation, as the firm’s contract includes hourly rates for three attorneys: Sam Keyes ($375), Johnny Healy ($360) and Ryan O’Beirne ($260).
Other lawyers, the Butler Snow engagement letter states, could be utilized as specific legal needs arise, but the firm may also use paralegals and other “non-lawyer personnel” to reduce costs.
The county will be billed each month for the firm’s services and non-routine, out-of-pocket expenses.
Neither Keyes nor Woodrell would forecast how many billable hours the county may incur for their respective work.
Keyes briefed supervisors on an upcoming $14.5 million general obligation bond for road improvements Monday but left the meeting before supervisors discussed the hospital issue.
The day’s agenda did not list the two contracts as action items for the meeting.
Open-ended costs
While the exact cost of legal and consulting fees associated with a potential transaction are not clear at this point, Woodrell estimated the county could spend $500,000 to $750,000 on the entire process.
“For a transaction of this size, I think those numbers are realistic,” he said. “Of course, craziness happens every day, and I can’t say craziness won’t interject itself in this process.”
Both Howard and Montgomery, who have consistently opposed any discussions on selling OCH, said they were concerned about the unending costs associated with a majority of the board voting to continue the process.
“I don’t think the taxpayers gave us a blank check and said, ‘Whatever you want to spend, spend it,'” Howard said.
The District 3 supervisor then questioned a perceived redundancy of hiring both Butler Snow and Woodrell to assist in developing an RFP, asking Woodrell, “Are we going to tell you what we want, and you then tell Butler Snow?”
“Butler Snow (has) never run a hospital. These deals are extremely complex. When you actually get into an RFP, there are going to be tremendous questions from potential bidders (wanting) to get into the intricacies of the operation of the hospital,” Woodrell said. “You don’t just open up the doors and let them wade through the hospital. That creates chaos. We don’t want the hospital’s operations impacted negatively or more negatively than they are. We want to make it a fluid process. There has to be data gathering, data consolidation prepared in a format that allows bidders, particularly in the first round (of an RFP process), to make an informed decision.”
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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