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1996-10-02 Work Session MINUTES OF HOSPITAL WORK SESSION, OCTOBER 2, 1996 PAGE 617 ASSEMBLY The New Hanover County Board of Commissioners held a Work Session on Wednesday, October 2, 1996, at 3 : 00 P.M. in Room 501 of the New Hanover County Administration Building, 320 Chestnut Street, Wilmington, North Carolina. Members present were : Commissioners Sandra Barone; William A. Caster; Vice-Chairman E. L. Mathews, Jr. ; Chairman Robert G. Greer; 4:100,, County Manager, Allen O'Neal; County Attorney, Wanda M. Copley; and Clerk to the Board, Lucie F. Harrell . Commissioner Sisson was absent . Chairman Greer called the meeting to order and advised that since New Hanover County was still in a State of Emergency from Hurricane Bertha and Hurricane Fran, there were some items that needed to be discussed before addressing the hospital issue. He requested the County Manager to present these items . DISCUSSION OF LIFTING THE BURNING BAN County Manager O'Neal presented a memorandum and draft press release prepared by the Fire Services Administrator, Phil Kouwe, reflecting options for lifting the burning ban. Commissioner Barone commented on the amount of debris that had accumulated due to both hurricanes and recommended allowing people to burn for two or three days a week to provide some relief to persons in the unincorporated county. Vice-Chairman Mathews stated he would be in favor of a fire permit being issued for a controlled burn in isolated cases of hardship; however, he would not support lifting the burning ban in the unincorporated county at this time because of the massive burning that would occur with the amount of debris that had not been collected. Fire Services Administrator, Phil Kouwe, advised that Pender County had not strictly enforced its burning ban and some significant fires had occurred from the burning of brush. Two of the New Hanover County Volunteer Fire Departments were placed on call to assist Pender County with controlling the fires. The proposal presented was prepared to provide relief to persons with hardships, such as large property owners who have difficulty in dragging heavy debris to the roadway for public collection, and developers who use burning as a method of clearing land. If the recommendations presented are approved, these types of situations will be addressed and burning will still be prohibited in high density neighborhoods and subdivisions . Enforcement will be difficult, but Staff feels the ban should not be entirely lifted at this time. Commissioner Barone commented on the fact that people will burn all types of materials, not just vegetative debris, and recommended lifting the burning ban for two days per week with no restrictions on the materials to be burned. This type of policy will be more easily understood by the public; easier to enforce; reduce the amount of burning at one time; and provide relief to the citizens who have hardship cases. C.., Fire Services Administrator Kouwe commented on existin g State Statutes and stated the Air Quality Division prohibits the burning of anything other than vegetative debris. He advised that the proposal presented would comply to the State Fire Code and regulations of the N. C. Division of Forest Resources. A lengthy discussion was held on the three-acre requirement in the proposal . After discussion of the need to protect the air quality and the massive burning that could occurpn the designated days, the Board concluded that the three-acre-minimum was appropriate. MINUTES OF HOSPITAL WORK SESSION, OCTOBER 2, 1996 PAGE 618 Motion: Commissioner Caster MOVED, SECONDED by Commissioner Barone to relax the burning ban in the unincorporated county to become effective October 3, 1996, under the following guidelines : 1. Burning will only be allowed on properties with a minimum of three acres of contiguous property. 2 . The fire must be no less than 250 feet from dwellings or businesses on adjacent property. 3 . Burning will be allowed between 8 : 00 A.M. and 6 : 00 P.M. on Thursday, Friday, or Saturday. 4 . Burning must not create a nuisance for neighbors, pedestrians, or drivers. 5 . Daily restrictions or prohibitions to open burning may be effected when unfavorable weather conditions pose a risk of fire or health hazards. 6 . Burning must comply with the State Fire Code and Division of Forest Resources regulations. Burning permits must be obtained from the Division of Forest Resources or one of its authorized agents . The State Fire Code requires that fires cannot be closer than 50 feet to any structure on the property and must be attended at all times with the availability of an appropriate fire extinguisher. Upon vote, the MOTION CARRIED AS FOLLOWS: Voting Aye: Commissioner Barone Commissioner Caster Vice-Chairman Mathews Chairman Greer Absent : Commissioner Sisson DISCUSSION OF REQUEST BY THE NEW HANOVER REGIONAL MEDICAL CENTER BOARD OF TRUSTEES TO CONVERT THE MEDICAL CENTER TO A COMMUNITY GENERAL HOSPITAL Chairman Greer requested the Commissioners to move forward with making a decision on the request by the Hospital Board of Trustees to convert New Hanover Regional Medical Center, a public hospital, to a non-profit corporation that will operate as a Community General Hospital . He advised that Commissioner Sisson was not able to attend the meeting, but he had discussed his concerns with Commissioner Caster who would share these comments when making his presentation to the Board. Chairman Greer requested each member of the Board to briefly comment on how this request should be approached. Commissioner Caster reported after serving on the Hospital Board of Trustees for the past four years, it was difficult to comprehend how quickly changes had occurred in the provision of health care. He stated in order for New Hanover Regional Medical Center to remain competitive and financially sound, the proposal submitted by the Hospital Board of Trustees was needed. When the Medical Center and Cape Fear Memorial Hospital could not reach an Nue agreement to combine the two facilities, the Cape Fear Memorial Hospital Board of Trustees sold the hospital to Columbia which greatly changed the dynamics of the community. It quickly became apparent that in order for the Medical Center to remain competitive, changes were needed to provide more flexibility in hospital investments and bidding for construction projects . In order to accomplish this goal, the Board of Trustees felt that converting from a public, county-owned hospital to a non-profit Community General Hospital as outlined under NCGS 131E-8 would allow the hospital to continue to provide a high quality of health care to the community and at the same time generate additional revenue. MINUTES OF HOSPITAL WORK SESSION, OCTOBER 2, 1996 PAGE 619 Commissioner Caster reported since the citizens approved two bond issues totaling $27 million several years ago for construction of the hospital, this facility has grown to a $220 million asset under the excellent leadership provided by the Boards of Trustees and Hospital Administrative Staff . During this time, health care has drastically changed, and public hospitals now have to compete with large for-profit hospital corporations. Under State law, public hospitals are limited on investment earnings and suffer a loss of money on construction projects because of being required to IL, adhere to the State bidding laws. Throughout the State, many public hospitals are experiencing difficulty in remaining competitive and financially sound. Without more flexibility, New Hanover Regional Medical Center will not be able to remain competitive and continue to provide the high quality of services and care given to its citizens . Commissioner Caster reported after discussion with Commissioner Sisson, he was supportive of converting the hospital to a Community General Hospital; however, he was concerned about the structural damage to the hospital buildings during the recent hurricanes and recommended addressing this issue in the proposed agreement between the Medical Center and New Hanover County. Vice-Chairman Mathews reported after discussing this issue with the Board of Trustees, there were many valid reasons for converting the hospital to a Community General Hospital; however, he felt more time was needed to thoroughly study and review the complicated issues that are involved with the change. For example, should the County lease the building to the hospital for a significant sum of money in lieu of one dollar per year. In closing, Vice-Chairman Mathews urged the Board not to rush into approving this change without thoroughly understanding the ILIissues. He commented on the November elections and stated, in his opinion, the new Board should decide on the change since these members will be in office for the next four years. Commissioner Caster responded that many citizens of the County had approached him about leasing the hospital and stated, in his opinion, to take any money from the hospital would be removing money that would be used to provide health care to the community. For example, 27% of the Medicare cost is involved with patients who have diabetes . The hospital has implemented a Diabetes Clinic to teach people to recognize the disease and hopefully prevent people from becoming diabetics, which will greatly reduce future medical costs for the hospital and community. Chairman Greer commented on the discussion that has occurred about selling the hospital and reported if the hospital was sold, the County would no longer have any control over the facility. The Board of Trustees could decide on what services to provide and move the facility out-of-town leaving the County with no way to provide health care to its citizens. If the hospital becomes a Community General Hospital, the Board of County Commissioners can maintain control through the appointment of the Trustees and placement of specific terms and conditions in an agreement between the County and Community General Hospital . He disagreed with deferring action until the new Commissioners were in office because of the time that would be required to familiarize the new Board about the overall general operation of the hospital and the key issues involved with the proposed conversion. Vice-Chairman Mathews responded the current Board was not informed about the proposed request until June 1996; therefore, what would be wrong with allowing the new Board to take time to thoroughly study the issue before making a decision. Commissioner Caster reported this issue could be studied for another year; however, the key point is the immediate need for the change to allow the hospital to remain competitive . MINUTES OF HOSPITAL WORK SESSION, OCTOBER 2, 1996 PAGE 620 Chairman Greer read a resolution of support from the Greater Wilmington Chamber of Commerce and passed out a copy to each member of the Board. He advised that many of the former Trustees and past Chairpersons of the Hospital Board were very much in favor of the proposed change; therefore, he felt more comfortable with the proposal . Discussion was held on indigent care. Vice-Chairman Mathews requested the County Attorney to explain how indigent care would be ■Nre)handled. County Attorney Copley responded the hospital would have to agree to provide indigent care as required on Page 2 of the Deed, which states that the Corporation shall provide all medically necessary services to indigent patients of New Hanover Regional Medical Center without regard for ability to pay. Discussion was held on how to assure continuance of the AHEC program. County Attorney Copley advised that AHEC was funded by UNC-Chapel Hill; therefore, she would have to review the existing contractual arrangement with the hospital and discuss this matter with the hospital attorney, Dumay Gorham. Once the documents are reviewed, a recommendation will be made to the Board. Commissioner Sisson asked if a non-profit corporation could be required to pay taxes on the properties and buildings purchased by the hospital when buying a medical practice. He expressed concern for the possible loss of tax dollars. County Attorney Copley responded that wording could be placed in the By-laws to require for-profit entities acquired by the hospital to continue making annual payments to the County in the amount of taxes that would have been paid when operating as a for- profit entity. Consensus: After a lengthy discussion, it was the consensus of the Board to use a Deed as the conveyance document and request the hospital to amend the By-laws to reflect the following changes : 1 . Amend the Deed to clearly state that the Corporation cannot amend its Articles of Incorporation without unanimous consent by the New Hanover County Board of Commissioners. 2 . Amend the By-Laws as follows : a. Require a unanimous vote by the Board of County Commissioners to amend the By-Laws. b. The New Hanover County Board of Commissioners shall appoint thirteen (13) members of a sixteen (16) member Board of Trustees with at least one being a County Commissioner, the current President of the Medical Staff and the immediate Past President of the Medical Staff . The President-Elect of the Medical Staff shall be a non- voting member. c. Appointments shall be for three-year terms with no one serving more than two consecutive full terms. Nel) d. Reappointment of a Trustee will be by a majority vote of the New Hanover County Board of Commissioners as done with other committee appointments. e. A Trustee may be removed from the Board of Trustees by a majority vote of the New Hanover County Board of Commissioners . 3 . The following reports shall be forwarded to the Board of County Commissioners : MINUTES OF HOSPITAL WORK SESSION, OCTOBER 2, 1996 PAGE 621 a. The Board of County Commissioners shall receive reports relating to the Corporation or its subsidiaries as the Board may request, including the Corporation' s investment policy. b. The Board of County Commissioners shall receive the annual audited financial report of the Corporation and a public presentation shall be made annually by (..,„ the Corporation' s independent audit firm. c. An annual written report and presentation will be given to the Board of County Commissioners regarding the Corporation' s provision of medical care, indigent care, and the physical condition of the land, buildings and equipment . 5. After a lengthy discussion on the hospital purchasing for- profit entities, such as medical practices including buildings, the County Attorney was requested to prepare a recommendation that would require these for-profit entities, once acquired, to make annual payments to the County in the amount of the property taxes that would have been paid by the entity if it had remained in a for-profit status . 6 . The Board of County Commissioners will receive notification of the intent to issue bonded debt . BREAK Chairman Greer called a break from 4 :35 P.M. until 4 : 50 P.M. Chairman Greer requested direction from the Board as to when the draft Deed and By-laws should be reviewed by the Board. C., Consensus: After discussion, the County Attorney was requested to prepare the draft Deed and proposed changes in the By-laws for presentation on Monday, October 7, 1996, with discussion of the draft documents on :cto1b9:r6 . 21, 1996, and consideration of a resolution to convert the Medical Center to a Community General Hospital on November DISCUSSION OF SELLING THE CERTIFICATE OF NEED FOR NEW HANOVER HOME HEALTH SERVICE Commissioner Barone reported that Mr. Jack Sanders and Mr. Tom White were attending the Work Session to discuss the value of the Certificate of Need issued to the Health Department for providing the Home Health Service. Mr. Sanders advised the Board that the Certificate of Need should revert back to the County if the hospital becomes a private non-profit corporation. He stated the Certificate of Need was a valuable asset worth at least $400, 000 of additional revenue. He urged the Board to consider selling the Certificate of Need. Chairman Greer responded that he had a problem with New Hanover County operating a government subsidized health service in direct competition with the private sector. Also, the Home Health Service had to draw on regional patients released from the Medical Center in order to survive; therefore, in his opinion, it would not be fair to Pender, Brunswick and Bladen counties to sell the Certificate of Need. Mr. Sanders responded that the Certificate of Need was issued to New Hanover County, not the surrounding counties. Commissioner Caster reported when the Home Health Service was transferred to New Hanover Regional Medical Center, the decision was based upon the fact that the program would become a liability to the County, not an asset . I i MINUTES OF HOSPITAL WORK SESSION, OCTOBER 2, 1996 PAGE 622 Mr. Sanders, again, reiterated the importance of the County recognizing the value of the Certificate of Need. He advised that in five years a Certificate of Need would be non-existent in the State of North Carolina. Chairman Greer asked Mr. Sanders why the Certificate of Need should be taken away from the Medical Center? Mr. Sanders responded that the Certificate of Need was purchased by the County and should be sold as a valuable asset . Chairman Greer stated, in his opinion, the hospital will continue to operate as a Community General Hospital; therefore, the Certificate of Need should remain with the hospital . Mr. White requested the Board to consider the value of the Certificate of Need which normally has to be purchased by any health care institution. The Medical Center was fortunate to have received the Certificate of Need when the Home Health Service was transferred to the hospital . Once the hospital becomes a private institution, the County should consider selling the Certificate of Need to the Community General Hospital or any other interested party to generate additional revenue for the County. Chairman Greer expressed appreciation to Mr. Sanders and Mr. White for their comments . ADJOURNMENT Chairman Greer adjourned the Work Session at 5 :32 P.M. Respectfully submitted, Lu ' e F. Harrell Clerk to the Board Nogs)