Sharp exchanges highlighted a lengthy and pointed discussion between Effingham County commissioners and Hospital Authority representatives Tuesday afternoon.
Commissioners, after two deadlocked votes, eventually tabled a proposal to have Armstrong Atlantic State University’s Center for Regional Analysis examine the impact of the Effingham Hospital’s planned modernization and expansion. Commission Chairman Dusty Zeigler, who has expressed his unhappiness about the amount of information provided by the hospital to the commissioners, doesn’t believe he’s gotten his point across to hospital officials.
“All of the things we understood were going to be happening in this process just aren’t happening. And they keep getting pushed back and pushed back and pushed back. Now we’ve been sent a letter to begin negotiations on the final application to be sent to HUD. We’re not prepared to make that decision. We haven’t seen these other things we were supposed to see, the feasibility study, the community confidence analysis, all those things we haven’t seen.”
Commissioners will receive a study conducted by Georgia Southern University’s Bureau of Business Research and Economic Development that the hospital said it will pay for.
The hospital is seeking Build America bonds from HUD for a proposed $30 million expansion and modernization. They are asking the commissioners to commit to 2 mills a year and for the land.
“The big issue for us is the 2 mills,” County Commissioner Bob Brantley. “That constitutes a tax increase every year.”
“What we’re looking at is a very expensive investment for the community,” Zeigler said. “We want to know, ‘is this a good return for the taxpayers’ investment?’”
Two mills over 25 years, at current values, would equal nearly $100 million. Commissioners asked if the hospital could place a monetary cap on the amount of property tax revenue it received each year.
County Administrator David Crawley met with Dr. Michael Toma of AASU to evaluate the information commissioners had received on the hospital’s modernization plans. Dr. Toma submitted a proposal of $58,000 to undertake the study.
“I was asked to have a third party evaluate the information being provided to the board,” Crawley said.
But hospital officials bristled at the county’s entreaty to Dr. Toma.
“No one talked to us about it,” said Rick Rafter, chairman of the Hospital Authority. “I was a little surprised when I found out about this.”
Rafter noted Dr. Phyllis Isley of GSU’s Bureau of Business Research and Economic Development performed what is known as a REMI study on the Effingham Parkway’s economic impacts.
Part of the HUD approval process includes a feasibility study, Rafter added, and that study — being conducted by accounting firm Dixon Hughes — will cost the hospital $80,000. That firm is contacting doctors to make sure the hospital’s numbers are accurate, Rafter said, would do exactly what the AASU study is intended to accomplish.
The Dixon Hughes study is expected to be finished in four weeks.
“I think to spend $58,000 to do this is a waste of money,” he said, “because we have this other $80,000 document coming. I think it’s a waste of money.”
Rafter also said Toma has no background in the hospital industry and that the county would have the hospital’s feasibility study and a Georgia Southern study that would cost $7,800. Rafter offered to have the hospital pay for the $7,800 REMI study. The Georgia Southern REMI study could take 45 days to complete.
“There are other opportunities and other documents out there that can give you the same information. You don’t need to spend $58,000,” Rafter said.
“If we want to get information to make our decision, you shouldn’t tell us that’s something we shouldn’t do,” Commissioner Verna Phillips said.
“That’s for us to make our decision. You’re getting a feasibility study, that’s good — you’ve got to do that to make your decision. We’re going to do some investigation to make our decision. What’s wrong with that? You can’t chastise us for trying to go out and get information that we want to make our decision.”
Commissioner Bob Brantley said he thought the amount of the proposal from Toma was “ridiculous,” but he also wanted the commissioners to have as much data and research as possible.
“For a $100 million investment, $58,000 is not a lot of money,” he said.
“To make a commitment of that magnitude, we have to have as much information as we can get,” Phillips said. “On the surface, we all feel this is a good idea. But we have people out there saying, ‘you shouldn’t do it.’”
The business of hospitals
Rafter also said the three hospitals in Chatham County are full and those hospitals were willing to let Effingham Hospital provide “the bread and butter” surgical procedures.
“We know what the market is,” Rafter said. “We know what the capabilities are. We know what the population is. We know how much money goes out of the county to Chatham County.”
Hospital Authority members and hospital officials met with HUD representatives in Washington, D.C., last month in a pre-application discussion. Two county commissioners, Phillips and Brantley, were scheduled to go. But just before the meeting, they were told they weren’t needed for the trip.
Zeigler questioned what commissioners were told about HUD’s decision not to include the commissioners in the February meeting.
“It was extremely unfortunate our folks didn’t go on that trip,” he said. “When has any arm of the federal government made a decision overnight to do something of that nature. I think it was extremely disingenuous. To me, it’s indicative of the whole process. There’s no communication, and I think your intention is to not be in communication and to feed us a tidbit from time to time to move the process forward.”
Rafter said that was not the desire of the hospital or its board of trustees.
“I understand there’s a communication problem,” Rafter said. “But it’s not just our problem — it’s the county’s problem, too. And we need to fix it.”
Dr. Joe Ratchford implored commissioners to support the hospital’s plans.
“We’ve been working on this project for quite a while,” he said. “HUD is all over the utilization and projection numbers. Overall, I think we have good information and we have further evaluations to come.”
The applications for the Build America bonds must be completed by Dec. 31. The hospital is awaiting an invitation from HUD to apply for the bonds.
“Of course, time is of the essence,” Dr. Ratchford said. “My concern is if we spend months getting research studies, it will be too late to get HUD financing.”
Dr. Ratchford also said the hospital has orthopedists ready to perform surgeries but can’t do so.
“We have to fix that,” he said.
The hospital also has recruited a general surgeon.
“They shouldn’t have to go to Savannah to get their appendix taken care of,” Dr. Ratchford said. “We’re already an underserved area. If we don’t do something to maximize our plans for the future, our kids and grandkids are going to suffer.”
Zeigler also expressed frustration that the hospital was approached by another firm about possible financing, but the commissioners weren’t informed of the contact.
“It was very deflating to know that you folks have even been approached by alternative financing solution and didn’t pursue it and didn’t let us know and told us that HUD is the only choice for financing,” Zeigler said.
Rafter said the hospital authority explored about four or five other options but chose HUD because the county would not be liable for the loan in the event the hospital failed.
“Understand this — you folks are the ones seeking the recourse for the loan. I feel you should be accommodating to our schedule,” he said. “You should bring the workshop to us. I didn’t appreciate your tenor or condescension to the folks on this board. It was very ill-received.
“Everything from the beginning, everything we’ve learned has been what we’ve sought. You haven’t brought it to us. You’re being here today is quite indicative of you folks being reactive. You’re not here being proactive.”
Zeigler also said the commissioners have yet to see the community confidence report.
“We’ve got to see all the things we’ve talked about,” he said. “We’ve got to see if this investment is going to work. That’s part of the reason for getting Toma, or someone like Toma, to do a study to help us make a $100 million decision.”