There are many questions surrounding the potential dissolution of Somervell County Hospital District. But a number of possibilities were addressed by Kevin Reed, the hospital district's attorney, at a joint meeting of the district board of directors and commissioners court Tuesday, Nov. 5.
And officials and a crowd of onlookers learned an election could be called in the near future. Somervell County resident Paul Harper gave a stack of 933 signatures - on a petition calling for an election - to Ray Reynolds, Glen Rose Medical Center CEO, following the meeting. Harper said the petition includes more than the required number of signatures, and most of them have been verified as "unique and valid."
Reed, who has three decades of experience representing hospitals and hospital districts, said Chapter 286.102 of Texas Health and Safety Code provides little information on the process following the presentation of a dissolution election petition. He said the process is almost unprecedented, with only a couple of opinions from the Texas Attorney General and no state case law on the issue.
"As you can imagine, this has not happened very often," Reed said. "In fact, it is a very, very rare event. We will be doing our best to follow the law the best we can as we go through this process."
With the petition received, the next step is verification, a duty that will be carried out by hospital district officials.
"It would be the district's responsibility to ask the county clerk for the voter roll and go through the voter roll and verify the contents of the petition," he said, adding statute does set a time limit on the verification process.
If the required number of signatures - 790, according to the most recent count of qualified, active voters - are verified, the district board will be required to call an election within 60 days of filing an election order, according to Reed.
"Uniform election dates do not apply," he said, explaining that the election could be held on any date.
Reed also said the ballot itself would be simple, asking for "yes" or "no" responses to the dissolution question.
The dissolution itself offers a couple of options. Reed said while the petition asks for operation of Glen Rose Medical Center to be returned to the county, the decisions related to the hospital's fate will be left up to the hospital board.
A successful election would leave the board with two options. Reed said the district board could opt to immediately dissolve the district and turn everything - debts, assets and obligations - back over to the county. But Reed said the board would also have the option to maintain the district, pay off debts - the estimated $14 million owed to the county - and continue to tax property owners to make those payments.
"They could continue to operate that district until that debt is paid off," he said. "Then it would have to turn the assets over to the county or any other political subdivision that exists within the boundaries of the district. The statute contemplates that may take a period of years."
Reed confirmed that property owners could continue to see a hospital tax for the duration of the 20-year debt term. Furthermore, he believes the district could raise taxes as long as they do not exceed the rollback rate.
Regarding the hospital board, Reed said if the district is maintained until debts are payed, the May 2014 and subsequent elections would be held. He also said if an existing board member resigns, a replacement would be made by board appointment.
Addressing indigent care funding, Reed said that issue had been previously addressed by the attorney general.
"That obligation returns to the county at the date of the election dissolution, not the end (of the dissolution process)," he said.
If the responsibility is returned to the county, officials would be required to dedicate eight percent of its total budget to indigent care funding in future years. Those funds are not included in the county's budget for the current fiscal year since the hospital district had already been formed when the budget was adopted.
If the election is not successful, another dissolution election could not be held over the full year following the election, Reed said.
Meanwhile, he said the dissolution could have an impact on the potential lease or sale of Glen Rose Medical Center.
"The dissolution of the district diminishes the value of the asset," he said. "If somebody is out looking to purchase a facility of your size, they want a district behind it because they want somebody to help with the indigent care obligation."
Larry Shaw, hospital board chairman, said Reynolds has been asked by directors to "entertain discussions of interest" about outside management of GRMC. He said discussions have been held with Community Health Systems, operator of Lake Granbury Medical Center and more than 130 other hospitals across the nation, and Baylor Healthcare System. Reynolds is expected to also speak with other management groups about a potential partnership.
"We don't have a timeline but those discussions have begun," Shaw said. "We promised the people earlier that we would have the responsibility to do that, and we're going to do it."
It was explained that dissolution did not necessarily mean taxes would go down for area property owners. County Judge Mike Ford said the county would be forced to fund indigent care at eight percent - about $900,000. He also said if control was transferred to the county, taxes - interest and sinking rate - could be increased to pay off hospital debt.
During a public question-and-answer session, Harper asked to present the petition. That request was denied, with Shaw and Reed both saying the item was not on the agenda.
"There can't be a better place and time," Harper said. "This is what you're talking about right? This petition is relevant to what your whole discussion is about today."
After some debate, with a couple of board members arguing no action could be taken on the petition, Reed told Harper he could give it to Reynolds so the verification process could begin.
Harper said the goal is to dissolve the district and new tax. He said signers agreed with the statement in the petition asking for the control of GRMC to be returned to the county. He disagreed with the option for the board to remain in tact until all debt is paid.
"We specifically put in the wording of this petition: transfer the land, building, improvements, equipment and other assets that belong to the district to Somervell County," Harper said. "Now you're saying you don't have to specifically do that, you have the choice of doing both, and I would tend to agree."
But he doesn't agree. Harper said in calling the formation election, commissioners honored the desires of that petition by appointing selected board members rather than calling for a hospital board election.
"They respected the wishes of your petition by putting you on the board as you requested," Harper said. "We would like for you to transfer this stuff and not go through the dissolve process. We respected your petition, and you should respect ours."