Oktibbeha County supervisors could begin reviewing sealed bids for an OCH Regional Medical Center purchase in about two months.
On Monday, supervisors approved a request for proposals for a transaction of the 96-bed, county-owned health care facility.
The document outlines the process in which potential suitors can submit bids for OCH, the minimum requirements for such a bidder and a number of issues a purchaser must address with their proposals, including maintaining and growing medical services, satisfying long-term debt, plans for long-term capital investment, commitments to community involvement and the security of current employees’ jobs.
The deadline for proposals will be set 60 days after the RFP’s first publication in local and statewide media outlets. County Administrator Emily Garrard said the first publication date could come as early as Monday, which means the anticipated proposal deadline will be set for July 7.
District 2 Supervisor Orlando Trainer, District 4 Supervisor Bricklee Miller and District 5 Supervisor Joe Williams supported the RFP’s issuance, while District 1 Supervisor John Montgomery and District 3 Supervisor Marvell Howard opposed.
The board also unanimously created a committee comprised of Montgomery, Trainer and board attorney Jackson Brown and tasked it with receiving weekly updates on the RFP’s status, and voted 3-2 to post the now-finalized document to the county’s website. The split vote was supported and opposed by the same bloc that approved the RFP earlier in the meeting.
Trainer said supervisors will now “sit back and wait” for offers and assess the potential suitors based upon what they can do to improve health care in Oktibbeha County.
“I think this will change the landscape in terms of opportunities for Oktibbeha County,” he said of the potential transaction. “From the very onset, I think people’s perspectives have changed. Some that were borderline (in the past) may now have different positions. There are strong supporters of the hospital remaining under local control, but there’s an element out there that doesn’t know which way to go yet.
“This is an emotional issue for many, but we’re not going to lose our hospital. That’s not our intent,” Trainer added. “Our intent is to better position our health care, be aggressive with services and to sustain ourselves.”
Petition for public vote
The RFP’s publication also opens the door for OCH supporters to file a petition attempting to force any potential sale or lease to a public vote. State law allows for such a move if 1,500 qualified county voters sign the petition.
The referendum could be added to November’s special election for chancery clerk.
“We’ve got 2,000 or more signatures, so we’re in good shape,” said hospital supporter and petition drive leader Frank Davis. “I’m just waiting for the big man at OCH (Chief Executive Officer Richard Hilton) to say go ahead and file it.”
As he cast his nay vote against the RFP, Montgomery said there were “too many moving parts” that would negatively affect Oktibbeha County if OCH is sold.
Both he and Howard said the process leading up to the RFP’s issuance — including payments for professional services from lawyers, consultants and analysts — has been a financial waste since voters are likely to block any future transaction.
Howard coupled that argument with the fact the three supervisors exploring a transaction will not be able to disclose the specifics of any potential deal ahead of a countywide vote. Butler Snow attorneys have repeatedly advised the board that nondisclosure agreements written to provide anonymity to potential suitors until a deal is closed would preclude any specific revelations.
“I think it’s an injustice to the taxpayers of this county for this board to have spent what I believe will be about $1 million … and only be able to give them a general idea of what they’re being offered for a hospital that taxpayer dollars built,” Howard said.
Background
Last year, county supervisors tasked Stroudwater and Associates with the first step required by law before exploring a hospital transaction: performing an assessment of OCH’s financials and market conditions.
That report suggested the county explore transaction possibilities while the hospital continues to improve its sustainability in case a sale or lease option isn’t available and floated a potential $20 million to $60 million price tag for OCH.
It also alleged an annual $3 million to $4 million gap exists between operating results and needed levels of performance before strategic capital investments are considered. Hilton refuted those claims, saying Stroudwater’s report was based on misleading information that inflated losses, diminished revenues and did not adhere to generally accepted accounting practices, and only a portion of the fiscal year’s data was available for the study, which meant the team used estimates for its calculations.
A recently released audit of the hospital’s previous fiscal year reported a $416,064 loss between OCH’s operating revenues ($71.75 million) and expenses ($72.17 million). The report adjusted the loss to a $190,844 decrease in the hospital’s overall position after factoring in nonoperational revenues and other factors.
Hilton said the hospital remains on a strong financial footing despite the loss, as recent trends show financial gains in the past years.
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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