A management agreement with a new operator at Huntsville Memorial Hospital could be finalized as early as Wednesday.
Managers with the Walker County Hospital District are expected to go behind closed doors at the start of next week’s meeting to discuss the financial viability and a potential agreement with a yet-to-be-named operator. However, documents obtained by The Item show that the new management company will enter into a joint venture transaction, which includes the purchase of certain assets from the Walker County Hospital Corporation in a bankruptcy sale.
“We are getting closer to the end … it seems like we have been running in quicksand for the past few months, but we can see the light at the end of the tunnel,” district chairperson Anne Woodard said in an interview earlier this month.
District officials have been working on the deal for a number of months, after narrowing down the field of four suitors to one earlier this year.
So how much will the transaction cost the taxpayers?
The Walker County Hospital District currently operates on a budget nearing $8 million with approximately $13 million in reserves. However, estimates from former interim CEO Michael Morgan suggested that the district would need a minimum of $28 million in cash to fund the first four months of operations.
The hospital district recently employed Ankura Financial to provide a needs assessment of the hospital, in an effort to provide a three-year outlook on daily operating and capital expenditures. However, those documents have not been made public.
“We know we are going to need extra dollars, we just aren’t exactly sure how much yet,” district administrator and former CEO of HMH Ralph Beaty said earlier this month.
According to Beaty, the hospital license would “hopefully” transfer to the district, with the only expenditure between the district and corporation being medial equipment owned by the private corporation. Approximately 90 percent of the medical equipment within HMH is owned by the taxpayers, according to an hard-asset evaluation completed by Carr Riggs & Ingram.
“We are not wanting to waste any taxpayer money with this,” Woodard said. “If this was only going to keep the hospital open a year, we wouldn’t do it. We believe this is a viable plan for a long-term future of Huntsville Memorial Hospital.
In Wednesday’s meeting, district officials are expected to hear an analysis from Ankura Financial, as well as discuss the terms and conditions of a non-binding letter of intent for the operations of the hospital.
District officials are also expected to discuss the 2020 budget in open session, which includes the adoption of the tax rate. Preliminary estimates has called for district officials to raise the tax rate to has much as 8 percent for the upcoming budget year, with subsequent increases in the coming years.
Wednesday’s meeting will begin at 6 p.m. in Conference Room A on the second floor of Huntsville Memorial Hospital.