Effingham County commissioners and Effingham Health System representatives may try to revise a deal between the two groups that enabled the hospital to embark on its modernization and expansion.
Staff from both groups worked to develop a revised memorandum of understanding that could clear up just how the hospital is to be paid under the terms of a 2010 deal between the county and the hospital. Under the terms of the agreement, the county is obligated to pay the hospital $3.6 million. But questions on how much, or how little, the county has paid the hospital have risen in recent weeks, and representatives from both sides are trying to work out from where the money originates.
“I think we’ve had some really good discussions,” said county finance director Joanna Wright.
Said interim county administrator Toss Allen: “We are all in agreement that there are some things that can be better clarified in the agreement.”
The hospital authority is suggesting that $243,000 can be accepted to cover the amount owed from previous years. The hospital authority has been asking about the property, 23.67 acres, where the Gateway Services building sits.
The county levies a millage rate on behalf of the hospital authority, but attorney Rusty Ross said that money could come from that specific property tax or from the county’s general fund revenue.
“You can come up with the money any way you want to,” he told commissioners at their Sept. 16 meeting.
Support from the county, in the form of pledged property tax revenues or another funding mechanism, was critical in securing the Build America bonds from the Department of Housing and Urban and Development used for the expansion. The 58,000-square foot, $30 million project was finished in January 2012.
“The main thing that HUD wants is to come to a clarity on the remaining 26 years of the contract,” Ross said.
HUD officials visited the hospital last month.
The hospital authority said the county originally was short more than $1 million in its payments over a three-year period, but the county replied it had overpaid the hospital by more than $800,000. Wright said that after going over the receipts, the two sides were within $5,000 of each other.
Representatives from the county and the hospital discussed clauses within a proposed memorandum of understanding to ensure payments are made and the hospital receives its funds within its fiscal year, which runs from Jan. 1-Dec. 31. Wright added they also talked about provisions in the contract that if the hospital doesn’t need those funds for indigent care, those payments could remain with the county.
Some current commissioners, however, are skeptical about the original contract. The county and the hospital entered into a contract in October 2010 and it went into effect Jan. 1, 2011.
“I don’t like the contract as it is,” said commission Chairman Wendall Kessler.
“This is not an unusual agreement,” Ross said, noting it was done partially based on agreements in other counties with their respective hospital authorities.
He also told commissioners the county is in a much better position than others. He said the hospital in tiny Calhoun County, about an hour west of Albany, closed about two years ago.
“You’re fortunate to be in a growing county with a very good patient population,” Ross said.
One other hurdle could be who owns the property the hospital authority is seeking. The county has been delving into the title for the tract.
“To this day, we don’t know who owns that,” said Commissioner Vera Jones.
Wright said the county’s review of the hospital’s finances showed its undesignated fund balance has grown from $9 million to $12 million.
“That is a credit to the hospital and their management. It seems they are on the right course,” she said.