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
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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.
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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
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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 .
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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
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