MINUTES OF A REGULAR MEETING OF THE BOARD OF MANAGERS OF THE WALKER COUNTY HOSPITAL DISTRICT
January 23, 2019
STATE OF TEXAS X
COUNTY OF WALKER X
The Board of Managers of the Walker County Hospital District, Walker County, Texas met in a regular session, open to the public, Wednesday, January 23, 2019 at 6:00 p.m. at Huntsville Memorial Hospital, Huntsville, Texas.
Members of the Board present included:
Chairman, Anne Karr-Woodard
Vice Chairman, Judy Emmett
Secretary, Jerry Larrison
Manager, Curtis Montgomery
Manager, David Toronjo
Also in attendance were: Keli Molina, WCHD Administrative Assistant; Ralph Beaty, Office Administrator and numerous guests on our sign in sheet attached.
Agenda Item #1: Call meeting to order.
Chairman Anne Woodard called the meeting to order at 6:00 p.m.
Agenda Item #2: Consider approving the minutes for the Regular Meeting held December 05, 2018.
Dr. Montgomery made a motion to approve the minutes for the regular meeting held on December 05, 2018. The motion was seconded Mr. Larrison. The motion passed by unanimous vote with one correction made by Dr. Toronjo.
Agenda Item #3: Reports from HMH Corporation.
Michael Morgan stated the HMH Board has approved an agreement from HMP to bring in a CEO for the organization and he could be a permanent CEO for the organization his name is Steve Smith. This is progressing along well, this is a place we go thru after we look and go thru all or most possible transactions. At this point and time it’s time for us to look at what will happen here from a stand point of an ongoing situation. What will happen now is I will back out of the day to day operations of the hospital, Steve Smith will come in and be able to take care of the day to day operations and be the CEO. I’ll continue to work with him and will also continue to work with possible transaction candidates over this time. This is set up in such a matter that the salary for Steve is a straight pass thru with no mark up. We will also put in place what could be a permanent CFO. Right now the current CFO is John Moore who works for HMP as well, John and Steve can look at a couple of candidates who could be CFO. In our agreement we have it set where both the CEO and CFO could be hired by the Operator without any problems. Also the district can without any problems on a go forward basis. And again both will be folks who want to remain in this area, Steve has already acquired Property that he will be moving into the next few weeks. Steve Smith’s start day at HMH will be February 11th. This will actually save the corporation on a monthly basis in fees reducing $60,000 putting this CEO in place and fixing it so he can move right into position if the Corporation and the District both want him to continue. If he doesn’t continue then he comes right back to HMP and he will continue to be a HMP employee.
We do have fresh ongoing due diligence with 3 groups at this point and time. One of the groups in interested in the purchase of the hospital and the operations. Another group in interested in the purchase of the Operations and leasing the hospital. The other group is a group that will do management and owner/operator type of management.
These 3 are in due diligence and we have been told by one that within the next couple of weeks they would like to provide us with a full Letter of Intent and possibly an Asset Purchase Agreement. We do not have anything at this time. There is actually a 4th, one other possibility where the land and building could be purchased. Our financials are not ready yet but will be by our meeting tomorrow night where I will share with the two District Board Members who will be attending our meeting. I have a few things from our Financials I will share tonight one is our Ebida for December 2018 is the best it has been in years. It looks like in the next 60 days we will break even. Our volumes where down for December but that has been due to a low flu season. Our total operation expenses are $ 9,167,000 less than this same time last year. This has been reduced by closing the outlying clinics, reducing the Physicians Org. by 50% and we have gone over every department in the hospital. We will start having an Indigent Care report every 3 months at the districts meetings starting in March.
Dr. Toronjo asked Michael Morgan in projecting in the next 6 to 12 months do you see a point in which the Corporation will resume making their lease payments to the district?
Michael Morgan replied we have not budgeted any lease payments in the 52 week forecast which we had discussed at the last district board meeting. There could be a possibility and that has to do with some additional initiatives that could go into place and help with the cash. The flip side of this is we need to work with all the creditors with payments and payouts. The District will be taken care of just like any other creditor will be taken care of in that negotiation. We have to treat everyone the same.
Chairman Anne Woodard stated there is a question from the public and I would like to address it while you are still here Michael Morgan, we are about to the end of our subsidies that we are giving to the Corporation and we have one payment left of the subsidies and they don’t have any projective subsidy from the District left for the 52 week forecast. The question is “In considering more subsidy for the private board do we have assurance that our tax payer money is not being used to pay off their debts.
Michael Morgan stated yes, it is not being used to pay off any debts. The money is used for payroll and supplies for the month not old supplies.
Chairman Anne Woodard stated when HMH has asked for subsidy it has to be in writing with the amount and what it is used for. Ralph Beaty stated the initial amount asked for was $2.9 but they have not needed that much it will be more like $2.3.
Wade Thibodeaux from the Walker County Press asked if the Federal Government shutdown has caused any disruption in the DISRIP or 1115 Waiver payments that the Corporation is seeing. Michael Morgan stated no they have not.
Michael Morgan stated they have not signed a new contract with Blue Cross since they have come aboard due to the contract paying a lower amount than years before but Blue Cross has indicated they are ready to negotiate now.
Agenda Item #4: Report on status of Ella Smither.
Ralph Beaty stated he had talked with Attorney Joe Henderson and the District had received a Summary Judgement in the District’s favor with the court under Judge Hal Ridley. The Plaintiffs have appealed the decision and they now have 75 days to set another hearing, at this time the Judge will make a ruling on the case. Mr. Henderson stated we will have to let it play out. Ralph Beaty stated there has been some interest in the purchase of Ella Smither but we will have to wait for the case to be over according to Joe Henderson.
Agenda Item #5: Comments from the public. If you wish to address the Board of Managers, please register prior to the meeting being called to order.
Loren Burns & Wade Thibodeaux both had questions that were answered in Agenda Item # 3.
Agenda Item #6: Consideration of a resolution regarding the public purpose for the District to provide certain subsidies to the Walker County Hospital Corporation, which is consistent with the public purpose of the District and its enabling act to provide a hospital.
Mr. Larrison made a motion to approve and accept the resolution regarding the public purpose for the District to provide certain subsidies to the Walker County Hospital Corporation. The motion was seconded by Mrs. Emmett. The motion passed by 4-1 with Dr. Toronjo against.
Agenda Item #7: Approve the filing of the Statutory Landlord’s Lien.
Dr. Toronjo made a motion to approve the filing of the Statutory Landlord’s Lien. The motion was seconded Mr. Larrison. The motion passed by unanimous vote.
Agenda Item #8: Ratify Termination of the H2C contract.
Dr. Toronjo made a motion to approve the termination of the H2C Contract. Mr. Larrison seconded the motion. The motion carried by unanimous vote.
Agenda Item #9: Approve the Agreement for the Agreed upon Procedures for the accountants, Carr Riggs.
Dr. Montgomery made a motion to approve the Agreement for the Agreed upon Procedures for the accountants, Carr Riggs and to add that the District Board will be able to look at any gray areas that are questionable. Mr. Larrison seconded the motion. The motion carried by unanimous vote.
Agenda Item #10: Consider approving payment of indigent care bills.
Ralph Beaty gave the Indigent care report. The indigent Care Bills total for the Month of January 2019 was $30,374.09. Dr. Montgomery made a motion to pay the indigent care bills as presented. The motion was seconded by Mrs. Emmett. The motion passed by unanimous vote.
Agenda Item #11: Review and accept the monthly financial report.
The Statement of Revenues & Expenditures for the month ending December 2018 was presented by Ralph Beaty. The Revenue for the month was $1,753,359.28 and expenditures were $ 1,132,579.20. Mrs. Emmett made a motion to approve the financial report as presented. The motion was seconded by Mr. Larrison. The motion passed by unanimous vote.
Agenda Item #12: Consider approving payment of monthly bills.
Monthly bills in the amount of $42,809.96 were presented by Ralph Beaty.
Mr. Larrison made a motion to pay the monthly bills as presented. The motion was seconded by Mrs. Emmett. The motion passed by unanimous vote.
Agenda Item #13: Approve the recording of January 2019 budgeted indigent care expense in the amount of $240,000.
Mr. Larrison made a motion to approve the recording of the January 2019 indigent care expense. Mrs. Emmett seconded the motion. The motion carried by unanimous vote.
Agenda Item #14: Consider giving approval to Walker County Appraisal District to accept the bids received on the properties in trust owned by the taxing jurisdictions.
Agenda Item #15: Adjourn meeting.
There being no further business, Chairman Anne Karr Woodard adjourned the meeting at 7:05 p.m.
Chairman Anne Karr- Woodard
Walker County Hospital District
Jerry Larrison, Secretary
Walker County Hospital District