chatham county hospital authority chairman don waters' report

8/15/2019 Chatham County Hospital Authority Chairman Don Waters' report

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IV. CHAIRMAN’S REPORT:

1. Establishing the Record of The Authority’s Role / Appointment (Authority ChairmanWaters)

The Chatham County Hospital Authority is made up of nine unpaid board members who are eachappointed for six-year terms by the County Commission to serve as stewards of taxpayer money.We are legally charged to not only oversee any property or infrastructure decisions, but our primary role is to protect and ensure safety net services for all residents.

The lease between the Authority and the Hospital is a fundamental agreement as to theoperations, management and maintenance of Chatham County's primary source of public healthcare. The lease arrangement between the Authority and Memorial is far more than a mere"ground lease" as may be found in common, for-profit commercial operations and real estatetransactions.

The Authority and Memorial are full partners in the mission of the Hospital.

2. Recent History (Authority Member Art Dana)

We were notified on May 9th – nearly a month ago - that Novant had decided to cease all further

discussions about a possible transaction with Memorial Health. As of today, we have not heard

from Novant.

As the Hospital and its leadership know, our primary issues with regard to the Novant transaction

were (and remain) that the lease must provide:

1. Any change to the service level designation for Trauma or NICU services at

Memorial must not be decided based upon commercial standards that may conflict with

the larger mission of the Hospital.

2. Novant must agree not to amend or revise the $295 million capital commitment or

obligation to pay off Memorial’s bonds.

3. Novant must guarantee the Memorial bonds (so long as they remain outstanding)

and establish a reserve account at Memorial equal to the amount of the outstanding debt.

4. If the lease terminates, the hospital’s assets would revert to the Authority and

there must be sufficient cash (and an absence of liabilities) for the hospital to continueoperations. The County cannot be put into a position where the Hospital is laden with so

much debt to Novant that a lease default is impractical.

We believe that these were reasonable positions that did not impact the operation of the Hospital

and placed a tremendous amount of ongoing trust and goodwill in the hands of the Hospital

Board and Management. Importantly, we also believe that the unwavering commitment to the


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3. The Authority’s Focus and Service to the Community (Chairman Waters)

As Mr. Dana noted, the Authority is focused on moving forward. We understand that theMemorial Health System Board of Directors has publically expressed its desire to work together

to move forward. We are in full agreement with this sentiment.

To that end, we are calling for the Health System to work with us, collaboratively and openly, toidentify new partners for Memorial Health – partners who are dedicated to the continued provision of core services and the protection of the community’s largest health care asset.

To that end, if approved by the Authority, we will establish an inclusive committee – includingAuthority members and Health System board members to move ahead in the evaluation of possible partners for the Health System. By doing so, we hope to signal to all parties that:

a) The Authority and the Health System are ready and able to move ahead together, each

respecting their roles in the long term provision of care in Chatham County; and

b) The process will include all interested partners, without regard to possible prior relationships.

As I noted earlier, the Authority and Memorial are full partners in the mission of the Hospitaland service to our community.

** End Chairman’s Report **

V. ACTION ITEMS:

A. Move to accept a resolution taking the action suggested by the Chairman of the CountyCommission:

1. Develop, in conjunction with the County’s financial consultant, a Request forQualifications from qualified accounting firms for the preparation of an audit of theHealth System, pursuant to the Authority’s lease with Memorial Health.

2. Review and inspect all documents, agreements, books and records relating to allaspects of the Health System’s and its affiliate’s relationship with Novant Health, Inc.and any of its affiliates.

3. Request guidance from the Georgia Attorney General regarding the role and

responsibility of the Authority members who also serve on the Hospital’s board ofdirectors.4. Authorize the Chairman to appoint a committee of CCHA members and Memorial

Health members to explore future partners for the Health System.5. Recognize and support the application of the Open Records Act and Open Meetings

Act to the Health System and the Health System’s continuing compliance with theselaws in furtherance of the public’s right to access information.


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VI. OTHER BUSINESS

None.

VII. ADJOURNMENT

chatham county hospital authority chairman don waters' report

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