Loading...
HomeMy WebLinkAbout~Master - Special Meeting of the Ames City Council 06/16/1994MINUTES OF THE SPECIAL MEETING OF THE AMES CITY COUNCIL AMES, IOWA JUNE 16, 1994 The Ames City Council met in special session at 6:02 p.m., June 16, 1994, in the City Council Chambers in the City Hall, 515 Clark Avenue, pursuant to law with Mayor Curtis presiding and the following Council Members present: Brown, Campbell, Hoffman, Parks, Tedesco, and Wirth. MGMC OWNERSHIP OPTIONS: Mayor Curtis stated this meeting is being held for the Council to discuss among themselves staff questions and choices they may want to make. There will be a brief period for public comments and questions at the end of the meeting. Council Member Campbell: We need to discuss why we need a change or why we do not need a change. Subjects for discussion would be: the hospital as it is now and why the medical community brought to us a need for change. Council Member Hoffman: Agreed the question of "why" is a good one. She was at Moore Park earlier today to answer questions. There were 50 people present and "why" seemed to be the leading question. The people did not realize the need for change was proposed by the Hospital and not the City. There is a misconception by the public of the issues, i.e. a letter she received stated "....the private nonprofit hospital makes the most sense", the letter listed items out of the hospital mailer, and then the last sentence says, "Please don't sell MGMC, but make it a not-for- profit private facility". Council Member Brown: Stated perhaps people will begin to understand more as the newspapers have articles regarding market shares and alliances. Council Member Hoffman: A question she was asked at Moore Park was, "if a hospital in Iowa City can join an alliance, why can't MGMC?" Council Member Tedesco: The hospitals in Iowa City are different because they are under the Board of Regents and the Regents are their trustees and they delegate the operation, I believe. City Attorney Klaus: There are differences depending what the issues are. Council Member Campbell: We are dealing with facts as well as perceptions. There is a fine line between what can be done or what we desire to have done. Council Member Tedesco: This issue has somewhat been driven by the Federal Government's entrance into the health care picture, not only from the standpoint of services, but providing funds for those services. This has brought forth creative ideas in cost and service, and the need to react quickly and efficiently with the change. MGMC has been a great asset to the community, and we are looking at the protection of that asset. If the hospital would become a liability, we would have a furor in the citizenship of the community. Council Member Campbell: One of the driving issues of municipal hospitals today is the need for property tax or bonding. Council Member Tedesco: If bonds are not performed on, even though they are insured, once the insurance company had to perform on payment of those bonds, it would be reflected later in rating, capacity and the cost to the City in future projects. Council Member Parks: Is MGMC something that should be governed or managed? Only 1/3 of hospital business serves the residents of Ames. Secrecy is a large issue, it makes people feel that there is something wrong. Privacy is different from secrecy, and I believe privacy is important because of difference in the market. Council Member Wirth: Where do we want to be in the medical community in the future? That is why the Council is here and that is why the medical community brought it to the Council. Council Member Brown: Market share is the long-term big issue. Council Member Hoffman: How do you have to share the market in order to keep medical care here? Council Member Campbell: If the hospital becomes more regional, the 35% of Ames population use would shrink. Is it appropriate to be a municipal hospital when only 35% or less of Ames residents are being served? Council Member Tedesco: The Council has been very open to the public on the issues. We need to let the community know which direction the Council is going. Moved by Tedesco, seconded by Campbell, that the Ames City Council supports a change of structure at Mary Greeley Medical Center. Council Member Tedesco stated that change is defined as "we support change". That change may come in any option that has been explored, or a combination thereof, or simply changing the City and/or State Code that deals with the governance as it presently stands with MGMC. Vote on Motion: 6-0. Motion declared carried unanimously. Council Member Brown: Could the City still own the hospital and appoint a board by changing State law and what would be the advantages and disadvantages of doing that? Council Member Wirth: The real question is how much can you separate the two? Council Member Brown: The two-tier system is cumbersome. Council Member Tedesco: There are three assets within MGMC, real estate, inventory, and value of the business. You need to set up a model first and then go to the IRS and find out if it can be done and if we can get a non-tax status. Do we want to be the ones to be the incorporator of the new entity or do we look at other sources to do that? Also, to be taken into consideration is the response of the community. We need to lay out some parameters and there is little or no support to sell to a for-profit out-of-state corporation. That option, in his opinion, is the least favorable. The community would like to see some local involvement or control in whatever entity is chosen. Council Member Campbell: A few important issues are quality and affordable health care, being positioned in alliances with other physicians and clinics, community retention of ambulance, Homeward and like services, assurance of access to all physicians in the community, the preservation of assets that we have, and not in a position where the hospital could be sold. Discussion was held among Council Members and City Attorney Klaus on the various ways conversion of MGMC to another entity could be done and where services provided could be exchanged for fair market value. The Council needs its representatives to present models of various options. City Attorney Klaus: Once Council decides what option(s) are to be pursued, the fair market issue can be looked at. A professional appraisal could be $70,000 to $80,000, however, that would be an unnecessary expense if the Council is not going to transfer title. Moved by Tedesco, seconded by Brown, that the Council not, at this time, support the selling of MGMC to an out-of-state for-profit corporation. Discussion was held by Council Members regarding the decision to rule out out-of-state for-profit corporations. It was stated that the motion was "to rule out at this time" and was done so in order to define the direction for Mr. Schainker and Mr. Klaus to access information. 2 Vote on Motion: 4-2. Voting Aye: Campbell, Parks, Tedesco, Hoffman. Voting Nay: Brown, Wirth. Motion carried. Discussion was held on the direction, goals, criteria, laws and ordinances needed to establish the issues, but the process needs to go from broad to particular before it is turned over to Mr. Schainker and Mr. Klaus. Budget concerns and outside expertise were also discussed. City Attorney Klaus: Some legal questions that have arisen are: Could the presently constituted Board of Trustees be given authority to conclude the real estate transactions for which City Council approval must now be obtained? The answer is yes. Could nonresidents of Ames be allowed as candidates for election to the presently constituted Board of Trustees? The answer is yes. Could physicians be allowed as candidates for trustees? The answer is yes. Could the hospital trustees be appointees of the City Council as was done before 1973? The answer is no. Mr. Klaus also stated that selling bonds for financing is vested in the City Council by State law and that area would require statutory changes if municipal hospital trustees were to sell revenue bonds. Moved by Campbell, seconded by Tedesco, to remove from the table consideration of changing State law and City ordinances in order to accomplish goals. Discussion was held on possible reluctance on the part of other entities, persons or groups that may become partners, joint venturers, etc., to make agreements with a municipality in the health field in regard to the integration and alliances that are occurring. Vote on Motion: 5-1. Voting Aye: Campbell, Parks, Brown, Tedesco, Hoffman. Voting Nay: Wirth. Motion carried. Moved by Wirth, seconded by Parks, to adopt Mission Statement: In pursuing a change in MGMC structure is to put ourselves in the best possible position for access to future affordable quality health care in our community. This includes: access by all doctors in the community, providing for non-profitable services such as ambulance, Homeward, local governance (regional service area), and positioning for future alliances. Discussion was held regarding the structure of a local governance board. It was decided to clarify and state - in a regional service area. Vote on Motion: 6-0. Motion declared carried unanimously. City Manager Schainker: In the models you are fashioning, there are two issues that will separate one from the other. Are you willing to have an entity pay taxes or not, and are you trying to avoid a cash payment as a goal? That will eliminate one option and leave two options that will meet the criteria. City Attorney Klaus: Whether or not you are getting fair market value is a question of fact. What is the value of promises, payments, and things that have been received in exchange? There are procedures and professionals who give opinions as to the value, but it's only an opinion, and it will always be arguable to some limits. Discussion was held regarding fair market value and whether it be obtained in services, cash, stock, reversion, or in combination. Property taxes and in lieu of taxes were also discussed. It was felt there was a need to talk to the City Assessor about his ruling in a not-for-profit option. It was agreed that positioning needs to be done for the best possible health care of the community. Moved by Tedesco, seconded by Brown, to have the Mayor, Chairman of the Conference Board, ask the City Assessor for an opinion concerning the taxability of a nonprofit entity. Vote on Motion: 6-0. Motion declared carried unanimously. Robert J. Baudino, Jr., attorney for OrNda, wanted to remind Council that they made two proposals - one for a straight acquisition of MGMC and the other was an interest in exploring other options, such as leasing the facility. He asked if there was an interest in having the other 3 proposals submitted to the Council. The Mayor answered that in the future, the Council may be interested. Mr. Baudino stated that he would go forward and submit those proposals. Dr. Kitchell, McFarland Clinic, wanted to emphasize that he supports the community or regional not-for-profit governance. He feels there has been a lot of anxiety about what is the fair market value of MGMC. Fair market value should be looked at by services provided the community. Merlin Pfannkuch, 1424 Kellogg Avenue: He feels too much emphasis is being made regarding outside/local representation on the MGMC Board of Directors. Council Member Campbell: Wanted to know what kind of time frame is expected before the next step. Mr. Schainker stated he wouldn't be able to answer until they have the plan together. Council Member Campbell: Wanted to thank the City Manager and City Attorney for their help in processing all the information. Council Member Hoffman: Stated she heard many comments from the public about the excellent job they have done. Council Member Brown: Stated she felt there were many creative ideas presented. COMMENTS: There were none. ADJOURNMENT: The meeting adjourned at 8:07 p.m. _________________________________ ______________________________ Jill Ripperger, Acting City Clerk Larry R. Curtis, Mayor _________________________________ Ginger Jones, Recording Secretary 4