County agrees to loan authority over 1.3 million dollars
New Appling County Commissioner Chairman Lewis Parker and new District Three Commissioner Jasper Tomberlin joined existing Commissioners Ronnie Rentz, Charlie Leggett, Sarah Boatright and Theodore Wilkerson for the first commission meeting of 2011 on Tuesday, January 4. The group was faced with a big decision immediately to start out the new year and that decision was whether or not to lend the Baxley/Appling County Hospital Authority funding to assist the health care system in paying $1,335,821.23 in late payroll taxes owed to the Federal Government.
Chairperson of the Hospital Authority Peggy Miles made a request to the commission on behalf of the health care system for the $1,335,821.23.
County Attorney Bob Highsmith then read an Intergovernmental Agreement that was drafted by Highsmith on behalf of the commissioners. The following is a portion of the agreement:
WHEREAS, it is necessary for the County and in the best interest of the public health of its citizens and the industrial growth of the County to preserve and protect the financial stability of the Appling County Hospital and related enterprises managed by the Authority, and
WHEREAS, the financial stability of said hospital and related enterprises is currently challenged by threat of an IRS lien for failure to pay employee taxes, and
WHEREAS, the arrearage in employee taxes is in the amount of One Million Three Hundred Thirty-five Thousand Eight Hundred Twenty-one and 23/100 ($1,335,821.23) Dollars, and
WHEREAS, Authority has made written request to County to borrow the amount of the past due taxes, and
WHEREAS, County has at a duly organized meeting of its board, a quorum being present, by motion duly made and seconded and approved by vote of the Board, the request of the Authority was approved and granted, and
WHEREAS, the parties desire to enter into an intergovernmental agreement in furtherance of the request and approval, setting forth the terms and conditions of the loan, and
WHEREAS, the grant and approval is conditioned upon certain terms being agreed to by the Authority,
NOW, THEREFORE, for and in consideration of the mutual promises, payments, and other considerations set forth in this Intergovernmental Agreement the parties hereto agree as follows:
1. County shall loan to Authority for the payment of past due employee taxes the sum of One Million Three Hundred Thirty-five Thousand Eight Hundred Twenty-one and 23/100 ($1,335,821.23) Dollars.
2. Said sum shall be paid directly to the IRS and not to Authority.
3. Authority shall execute a note to County for the amount of the loan to be paid over five years. Said note shall have a rate of interest in the amount of six percent.
4. The note described in paragraph 3 notwithstanding, Authority shall within two months of the payment by County in behalf of Authority to the IRS apply to SunTrust Bank for a loan in no less than the amount of its note to County and from the proceeds of said bank loan repay County its funds lent. It being understood and agreed by the Authority that County does not intend to have the note described in paragraph 3 to be paid out over its term and County does not want to deplete its reserves by said amount for longer than a 2-3 month period.
5. County agrees to be guarantor of the note to SunTrust Bank.
6. Authority agrees that during the term of this agreement and during the term of any notes made during the term of this agreement guaranteed by County that the County Manager and two commissioners of the County’s choice shall be ex-officio members of the Authority and all committees established by the Authority specifically including but not limited to the finance committee. Authority shall give the same notice to County Manager that it gives to its members of the time, date and place of every meeting of the Authority and every meeting of every committee.
7. Authority shall not during the term of this agreement and any other subsequent amendments or agreements nor during the term of the note described in paragraph 3 and any notes guaranteed by County pursuant to this or subsequent agreements and amendments of agreements make expenditure for any real property, machinery, or equipment of any nature kind or description exceeding the cost of $5,000.00 without notice to the County and approval by its Board. Such approval shall not be unreasonably withheld provided adequate evidence is given that the acquisition will contribute a positive cash flow and is necessary to the operation of the hospital and related facilities.
8. Authority shall work to establish a business model defining the direction of the Hospital for the future and define the services it can financially afford in the future to provide the citizens of Appling County while working to delete and cease negative cash flow services and liquidate equipment and property that does not serve to produce a positive cash flow for the Hospital.
9. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, and their respective legal representatives, successors, and assigns.
Following the reading of the agreement, Parker asked if the commissioners or anyone present at the meeting had any questions.
John Aycock asked how long this had been issue (referring to the system not paying taxes).
Appling HealthCare CEO Dale Spell told Aycock this had happened just this past year 2010. Spell continued that the total taxes for 2010 were well over $5,000,000.00 and added that the system had missed paying 18 of the 52 weeks for 2010.
Aycock questioned how many doctors are on staff and Spell responded that there are presently 10 doctors on payroll.
Commissioner Wilkerson asked Spell if he willingly withheld the payment of the taxes. Spell told Wilkerson that he takes complete responsibility and further explained that he had three choices at times during 2010 and these choices included making payroll, paying vendors or paying taxes.
Commissioner Rentz asked why the system had made certain purchases in 2010 such as equipment and real estate like the Satilla Building. Spell told Rentz that the system had been making a monthly payment of $26,000.00 for the mobile MRI at the hospital. He then stated that by purchasing a MRI for the system on a lease-to-own agreement the system is now paying $16,000.00 per month. As for the Satilla Building, Spell stated that the system had been leasing this property for $25,000.00 per year. By purchasing the property he said that the system is saving $200.00 per month.
Commissioner Boatright asked Spell if the system has a plan in place to keep this from happening again. Spell stated that they have started reviewing all policies and procedure and also looking at levels of authority for system staff.
Al Graham asked how much was the system’s payroll in 2010. Spell stated that it was $18 million. Graham then asked how much the system’s expenditures were for 2010. Spell stated that it was over $30 million. Graham also asked how much the county contributes to the system annually. Spell stated that the county gives the system $500,000.00 annually for the ambulance service and added that the system spends over $700,000.00 annually for the ambulance service. Graham stated that he just wanted the public to be aware of these figures.
Boatright stated that the authority had never made a request to the commissioners for an increase in the county’s contribution to the system.
Rebecca Ogden asked Spell if Medicare and Medicaid were causing part of the problems with the system’s cash flow issues. Spell answered that it was part of the problem. He stated that the system currently has over $10 million in receivables owed to the system. He added that because of the economy the system has picked up more bad debt as well.
Parker stated to everyone in attendance that they could not imagine how mad he and some of the commissioners were when they learned about this issue. However, Parker stated that the community has got to work through this situation and make sure it never happens again.
He then called for a motion to either agree or not agree to the Intergovernmental Agreement. Commissioner Boatright made a motion to enter into the agreement and Wilkerson seconded the motion. The motion passed unanimously.
Other business
Parker reported that County Manager Lee Lewis was not at the meeting due to the fact that he and he wife, Melody, gave birth to a new baby boy that same day.
The commissioners approved a recommendation to apply for a Community Development Block Grant to complete the second phase of the Cook-Heights Project. The commission also agreed to increase the matching portion to $100,000.00. The total of the grant, if awarded to the county, would be $500,000.00.
Cooperative Extension Agent Janet Hollingsworth shared information with board members about 4-H and Cooperative Extension. Hollingsworth pointed how fortunate Appling County is to be a Tier 6-type agency. A Tier 6 includes two or more agents, plus a full-time coordinator. There are less than 25 of these type agencies in the state, which are top tier-type agencies. Southeast Georgia District Extension Head Lannie Lanier was also present at the meeting and he reported that the reason why Appling had one of the best agencies in the state was due to support from the community. He also thanked the commission for its continued support.
Lanier also introduced Shane Curry. Curry has been selected to become the new County Agent for Appling County, dependent upon approval by the commissioners. The commissioners unanimously approved Curry as the new County Agent and he will begin his new position February 1. (Editor’s note: Hollingsworth told The News-Banner that a reception is being planned for Curry to introduce him to the community. The date and time for this event will be announced in the coming weeks.)
The board approved the United Healthcare renewal for county employee health insurance. It was reported that there will be a 10.8 percent increase in 2011 and this equates to $191,095.00 increase in premium.
After some discussion, the board approved the purchase of fireworks for the annual July 4th Fireworks Show at a cost of $8,782.47 on a split vote. Commissioners Boatright, Wilkerson and Tomberlin voted in favor of the purchase. Commissioners Rentz and Leggett opposed.
Bids were reported for adding a protection door to the elevator at the Appling County Courthouse. South Georgia Elevator submitted the approved low bid at a cost of $1,400.00. OTIS Elevator also submitted a bid for $1,936.00.
The commissioners voted to keep their meeting dates and times the same as they have been. The county commissioners meet on the first and third Tuesday of each month starting at 5:30 p.m.
County Attorney Bob Highsmith then read an Intergovernmental Agreement that was drafted by Highsmith on behalf of the commissioners. The following is a portion of the agreement:
WHEREAS, it is necessary for the County and in the best interest of the public health of its citizens and the industrial growth of the County to preserve and protect the financial stability of the Appling County Hospital and related enterprises managed by the Authority, and
WHEREAS, the financial stability of said hospital and related enterprises is currently challenged by threat of an IRS lien for failure to pay employee taxes, and
WHEREAS, the arrearage in employee taxes is in the amount of One Million Three Hundred Thirty-five Thousand Eight Hundred Twenty-one and 23/100 ($1,335,821.23) Dollars, and
WHEREAS, Authority has made written request to County to borrow the amount of the past due taxes, and
WHEREAS, County has at a duly organized meeting of its board, a quorum being present, by motion duly made and seconded and approved by vote of the Board, the request of the Authority was approved and granted, and
WHEREAS, the parties desire to enter into an intergovernmental agreement in furtherance of the request and approval, setting forth the terms and conditions of the loan, and
WHEREAS, the grant and approval is conditioned upon certain terms being agreed to by the Authority,
NOW, THEREFORE, for and in consideration of the mutual promises, payments, and other considerations set forth in this Intergovernmental Agreement the parties hereto agree as follows:
1. County shall loan to Authority for the payment of past due employee taxes the sum of One Million Three Hundred Thirty-five Thousand Eight Hundred Twenty-one and 23/100 ($1,335,821.23) Dollars.
2. Said sum shall be paid directly to the IRS and not to Authority.
3. Authority shall execute a note to County for the amount of the loan to be paid over five years. Said note shall have a rate of interest in the amount of six percent.
4. The note described in paragraph 3 notwithstanding, Authority shall within two months of the payment by County in behalf of Authority to the IRS apply to SunTrust Bank for a loan in no less than the amount of its note to County and from the proceeds of said bank loan repay County its funds lent. It being understood and agreed by the Authority that County does not intend to have the note described in paragraph 3 to be paid out over its term and County does not want to deplete its reserves by said amount for longer than a 2-3 month period.
5. County agrees to be guarantor of the note to SunTrust Bank.
6. Authority agrees that during the term of this agreement and during the term of any notes made during the term of this agreement guaranteed by County that the County Manager and two commissioners of the County’s choice shall be ex-officio members of the Authority and all committees established by the Authority specifically including but not limited to the finance committee. Authority shall give the same notice to County Manager that it gives to its members of the time, date and place of every meeting of the Authority and every meeting of every committee.
7. Authority shall not during the term of this agreement and any other subsequent amendments or agreements nor during the term of the note described in paragraph 3 and any notes guaranteed by County pursuant to this or subsequent agreements and amendments of agreements make expenditure for any real property, machinery, or equipment of any nature kind or description exceeding the cost of $5,000.00 without notice to the County and approval by its Board. Such approval shall not be unreasonably withheld provided adequate evidence is given that the acquisition will contribute a positive cash flow and is necessary to the operation of the hospital and related facilities.
8. Authority shall work to establish a business model defining the direction of the Hospital for the future and define the services it can financially afford in the future to provide the citizens of Appling County while working to delete and cease negative cash flow services and liquidate equipment and property that does not serve to produce a positive cash flow for the Hospital.
9. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, and their respective legal representatives, successors, and assigns.
Following the reading of the agreement, Parker asked if the commissioners or anyone present at the meeting had any questions.
John Aycock asked how long this had been issue (referring to the system not paying taxes).
Appling HealthCare CEO Dale Spell told Aycock this had happened just this past year 2010. Spell continued that the total taxes for 2010 were well over $5,000,000.00 and added that the system had missed paying 18 of the 52 weeks for 2010.
Aycock questioned how many doctors are on staff and Spell responded that there are presently 10 doctors on payroll.
Commissioner Wilkerson asked Spell if he willingly withheld the payment of the taxes. Spell told Wilkerson that he takes complete responsibility and further explained that he had three choices at times during 2010 and these choices included making payroll, paying vendors or paying taxes.
Commissioner Rentz asked why the system had made certain purchases in 2010 such as equipment and real estate like the Satilla Building. Spell told Rentz that the system had been making a monthly payment of $26,000.00 for the mobile MRI at the hospital. He then stated that by purchasing a MRI for the system on a lease-to-own agreement the system is now paying $16,000.00 per month. As for the Satilla Building, Spell stated that the system had been leasing this property for $25,000.00 per year. By purchasing the property he said that the system is saving $200.00 per month.
Commissioner Boatright asked Spell if the system has a plan in place to keep this from happening again. Spell stated that they have started reviewing all policies and procedure and also looking at levels of authority for system staff.
Al Graham asked how much was the system’s payroll in 2010. Spell stated that it was $18 million. Graham then asked how much the system’s expenditures were for 2010. Spell stated that it was over $30 million. Graham also asked how much the county contributes to the system annually. Spell stated that the county gives the system $500,000.00 annually for the ambulance service and added that the system spends over $700,000.00 annually for the ambulance service. Graham stated that he just wanted the public to be aware of these figures.
Boatright stated that the authority had never made a request to the commissioners for an increase in the county’s contribution to the system.
Rebecca Ogden asked Spell if Medicare and Medicaid were causing part of the problems with the system’s cash flow issues. Spell answered that it was part of the problem. He stated that the system currently has over $10 million in receivables owed to the system. He added that because of the economy the system has picked up more bad debt as well.
Parker stated to everyone in attendance that they could not imagine how mad he and some of the commissioners were when they learned about this issue. However, Parker stated that the community has got to work through this situation and make sure it never happens again.
He then called for a motion to either agree or not agree to the Intergovernmental Agreement. Commissioner Boatright made a motion to enter into the agreement and Wilkerson seconded the motion. The motion passed unanimously.
Other business
Parker reported that County Manager Lee Lewis was not at the meeting due to the fact that he and he wife, Melody, gave birth to a new baby boy that same day.
The commissioners approved a recommendation to apply for a Community Development Block Grant to complete the second phase of the Cook-Heights Project. The commission also agreed to increase the matching portion to $100,000.00. The total of the grant, if awarded to the county, would be $500,000.00.
Cooperative Extension Agent Janet Hollingsworth shared information with board members about 4-H and Cooperative Extension. Hollingsworth pointed how fortunate Appling County is to be a Tier 6-type agency. A Tier 6 includes two or more agents, plus a full-time coordinator. There are less than 25 of these type agencies in the state, which are top tier-type agencies. Southeast Georgia District Extension Head Lannie Lanier was also present at the meeting and he reported that the reason why Appling had one of the best agencies in the state was due to support from the community. He also thanked the commission for its continued support.
Lanier also introduced Shane Curry. Curry has been selected to become the new County Agent for Appling County, dependent upon approval by the commissioners. The commissioners unanimously approved Curry as the new County Agent and he will begin his new position February 1. (Editor’s note: Hollingsworth told The News-Banner that a reception is being planned for Curry to introduce him to the community. The date and time for this event will be announced in the coming weeks.)
The board approved the United Healthcare renewal for county employee health insurance. It was reported that there will be a 10.8 percent increase in 2011 and this equates to $191,095.00 increase in premium.
After some discussion, the board approved the purchase of fireworks for the annual July 4th Fireworks Show at a cost of $8,782.47 on a split vote. Commissioners Boatright, Wilkerson and Tomberlin voted in favor of the purchase. Commissioners Rentz and Leggett opposed.
Bids were reported for adding a protection door to the elevator at the Appling County Courthouse. South Georgia Elevator submitted the approved low bid at a cost of $1,400.00. OTIS Elevator also submitted a bid for $1,936.00.
The commissioners voted to keep their meeting dates and times the same as they have been. The county commissioners meet on the first and third Tuesday of each month starting at 5:30 p.m.
Trackbacks
Trackback specific URI for this entry
No Trackbacks