Oktibbeha County is close to seeking offers for OCH Regional Medical Center after supervisors authorized Butler Snow attorneys and hospital consultant Ted Woodrell on Monday to draft a request for proposals for the publicly owned health care facility.
Monday’s action does not formally start the RFP process, as a majority of board members must still approve a resolution of intent to sell the hospital and release the finished document.
By law, an RFP must establish the evaluation process supervisors will use to review offers, identify a date for the proposed transaction and set the minimum terms for a deal. Those terms, among other requirements, could include a purchase price or lease payment amount; operational and financial metrics for qualified respondents; and plans for long-term capital improvements and physician recruitment.
District 2 Supervisor Orlando Trainer said the document could also contain language safeguarding OCH jobs for a certain post-transaction time period, guaranteeing certain medical services are provided locally and providing future community oversight with hospital management.
“The way it’s shaping up, we’re moving forward. Now, it’s about putting together an aggressive package,” he said. “We haven’t gotten to the point of knowing exactly where we’re going, but we’re going to continue to follow the process and look out for the county’s best long-term interests.”
Supervisors are expected to meet with Butler Snow representatives and Woodrell again in the coming weeks to define those expectations and craft the draft’s language. Depending on schedules, Butler Snow attorney John Healy said it could take at least a month to create a final version of the document.
It is unknown at this point if the OCH Board of Trustees will provide input for the RFP’s language or possible safeguards. Woodrell said he reached out to the group after supervisors extended his consultation contract and hired Butler Snow as legal counsel in February, but trustees declined his overture.
“Regardless, we will be reaching out again for their input. That door is never going to be closed,” said Butler Snow attorney Sam Keyes.
A call to OCH Chief Executive Officer Richard Hilton went unreturned after Monday’s meeting.
Trainer said the county would continue to move forward “even if we don’t have the full blessings of trustees at this point.”
The process so far
The board’s decision to begin crafting an RFP does not lock the county into conducting a transaction, and supervisors aren’t bound to accepting the highest and best proposal for OCH if and when they formally seek proposals in the future.
The document’s creation, however, does signal a majority of supervisors’ intent to continue the process.
Trainer, who has long advocated exploring a deal for OCH as way to expand health care services and economic development in Oktibbeha County, was joined in supporting Monday’s action by District 4 Supervisor Bricklee Miller and District 5 Supervisor Joe Williams.
District 1 Supervisor John Montgomery, who has routinely voted against moving forward with a process that could eventually sell the hospital cast the lone opposing vote, and District 3 Supervisor Marvell Howard left the meeting before Butler Snow representatives spoke to the board.
So far, the county has satisfied certain pre-transaction exploration requirements mandated by law, Healy said, including Stroudwater and Associates’ 2016 operational review and feasibility report and the board’s Dec. 6 public hearing on those findings.
To continue the process, supervisors must next craft a resolution of intent to sell or lease the facility — one that states why it would be in the best interest of the community to move forward with a transaction — and then publish a finalized RFP for at least 21 days.
Hospital supporters collecting signatures to force such a transaction to a countywide vote can file their petition with the circuit clerk once the resolution of intent and RFP are published. Signatures from approximately 1,500 qualified voters would take the decision to sell or lease OCH away from the supervisors and push the issue to the ballot box.
A timeline provided by Butler Snow forecast the entire process — from the adoption and publication of the RFP and supporting resolution to a transaction’s close — could take between 180 days to 18 months, but that did not include an estimate factoring in a successful petition effort.
Stroudwater’s report first suggested supervisors seek proposals after it identified an annual $3 million to $4 million gap between current operating levels and the amount needed for capital improvements to occur, but Hilton refuted those claims last year and said the analysis was filled with misleading data that failed to follow generally accepted accounting principles, understated the hospital’s income and overstated its expenses.
The firm estimated OCH could fetch between $20 million and $60 million in a transaction.
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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