Let's start with the premise that we fully believe here that one legally defined district cannot spend money in another legally defined district, even through a backdoor. We also believe that it may be true that even a hospital authority board cannot spend money outside the county. Both these premises, barring Somervell County Hospital District doing the right thing, would probably have to be challenged via lawsuit, but we believe that lawsuit would prevail and that taxpayer money going to Pecan Family Medical Center and associated doctors working there would have to cease. This first part is going to discuss the previous Somervell County Hospital Authority, the name the lease with Pecan Family Medical Center is under, and the legal definition of a county hospital authority.
Breaking it down:
The following information came from an open records request I did on 5/13/203 to Sharla Collins. I went down to GRMC and inspected these records in person in Ray Reynolds office.
I request to be able to examine in person the following records at an expedient and convenient time and date. If these records exist on a website, I am satisfied with that providing the link to each of these items is specifically returned.
- All payments made for the leased property for Pecan Family Medical Center by GRMC/SCHA for the years 2010-current date (May 13, 2013). This to include not only space leased by GRMC/SCHA for doctor visits but also for xray and lab equipment.
- Copy of lease agreement made between Glen Rose Medical Center/Somervell County Hospital Authority and the building owners/leasers of the space at Pecan Family Medical Center, dated after the creation of the Somervell Hospital Authority Board in October 2009.
- All expenses made for Pecan Family Medical Center to include building or decorative improvements, cost of doctors, physician assistants, nurses and other medical personnel for the time period 2010-current date (May 13, 2013)
- Any payments made for any loans which benefited either building/decorative improvements at Pecan Family Medical Center or were spent to support a physician, physician assistant, nurse, or other medical personnel.
- Schedule for doctors/nurses/other medical personnel when available at Pecan Family Medical Center, to include the names of the personnel so used for the years 2010 –current date (May 13, 2013)
- Current value and list of all xray and diagnostic equipment that GRMC/SCHA owns that is currently being used at the Xray/Lab room at Pecan Family Medical Center as of current date 5/13/2013.
Thank you. You may reach me via email at d********* to arrange a convenient time for me to inspect these records or call .
There is currently a lease between the entity Glen Rose Medical Center and Pecan Plantation Properties, Inc. The lease was amended on September 25, 2009 with a raise in rent. You can see that in both cases of the lease, both times with Gary Marks signature, the signatory is Glen Rose Medical Center
and in the renewal of the lease-signatory is Glen Rose Medical Center
How much is the monthly rent?
When Glen Rose Medical Center ceased to be a non-profit hospital owned by Marks et al, what happened to GRMC? It became Somervell County Hospital Authority dba (doing business as) Glen Rose Medical Center. Here's what the 2011 GRMC/Somervell County Hospital Authority says (as prepared by an independent auditor), p 14.
Note that this specifically says "Effective January 1, 2010, the operations and all related assets and liabilities with the exception of the faciilty building and certain equipment, of Glen Rose Medical Foundation, Inc, a not-for-profit corporation and Glen Rose Nursing Home, LLC was transitioned to the Authority. On January 1, 2010, Glen Rose Healthcare Inc (the "501A") entered into a management agreement with the Authority to provide for certain management services in exchange for a services fee.... The facility and certain equipment is leased to the Authority from Somervell County as further described in Note 10."
Note 9 shows that due to this management, Somervell County taxpayers are paying to subsidize the doctors salaries, note that it says "surrounding area" and that the doctor must pay back the money that Somervell County advances, according to the terms of the management agreement.
This matches up with what Somervell County commissioners said when going through the transition.
And here is Note 10,describing the Authority leasing out county facilities, etc for a dollar a year
The audit references Texas Health and Safety Code re County Hospital Authorities.
Sec. 264.003. CREATION. (a) The commissioners court of a county by order may create a county hospital authority and designate the name of the authority if the commissioners court finds that creation of the authority is in the best interest of the county and its residents.
(b) The authority is composed only of the territory in the county.
(c) The authority is a body politic and corporate and a political subdivision of the state.
(d) The authority does not have taxing power.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 264.022. ACQUISITION, OPERATION, AND LEASE OF HOSPITALS. (a) The authority may construct, purchase, enlarge, furnish, or equip one or more hospitals located in the county.
(b) The authority may operate and maintain one or more hospitals. The authority shall operate a hospital without the intervention of private profit for the use and benefit of the public unless the authority leases the hospital.
(c) The board may lease a hospital or part of a hospital owned by the authority for operation by the lessee as a hospital under terms that are satisfactory to the board and the lessee. The lease must:
(1) be authorized by resolution of the board;
(2) be executed on behalf of the authority by the president and secretary of the board; and
(3) have the seal of the authority impressed on the lease.
(d) The bond resolution or trust indenture may prescribe procedures and policies for the operation of a hospital. If a hospital is used, operated, or acquired by a nonprofit corporation or is leased, the authority may delegate to the nonprofit corporation or lessee the duty to establish the procedures and policies.
Sec. 264.032. EMERGENCY BORROWING. (a) If the board declares that funds are not available to meet lawfully authorized obligations of the authority and that an emergency exists, the board may borrow money at a rate of interest not to exceed the maximum annual percentage rate allowed by law for authority obligations at the time the loan is made.
(b) To secure a loan, the board may pledge:
(1) revenues of the authority that are not pledged to pay bonded indebtedness of the authority;
(2) authority bonds that have been authorized but not sold; or
(3) revenues of the authority if the pledge is subordinate to any pledge securing outstanding bonds of the authority.
(c) A loan for which bonds are pledged must mature not later than the first anniversary of the date on which the loan is made. A loan for which authority revenues are pledged must mature not later than the fifth anniversary of the date on which the loan is made.
(d) The board may not spend money obtained from a loan under this section for any purpose other than the purpose for which the board declared an emergency and, if bonds are pledged to pay the loan, for any purpose other than the purposes for which the pledged bonds were authorized.
The lease is not with the 501a, but with Glen Rose Medical Center. As you read and saw above, Somervell County decided it would be within their best interests, and apparently not an unusual situation to help subsidize the doctors who are in a 501a. I believe the careful dancing about this that you see in the video above is because taxpayer money was going to go to the doctors THROUGH the Hospital Authority. One might argue pro or con whether it's in a county's best interests to attempt to attract and keep physicians by helping out their salary. But does the management agreement with the 501a also say that they would be taking taxpayer money to make improvements to Pecan Family Medical Center, including the taking out of a $50,000 loan, particularly when that is not in OUR county but HOOD county? (And, we remind, now that there is a hospital district, why in the world would Somervell county taxpayers, especially since our own taxes have gone up, want to spend money for someone else's district? Hood County DOES NOT PAY HOSPITAL DISTRICT TAXES. Seems to me the hospital authority and now district are trying to funnel money for operation of a clinic in another county that has its own district THROUGH the 501a, at least that is my theory at this moment since there is nothing otherwise that would allow them to spend in another county/district. The district has not finished transitioning over all the paperwork; could they be, for example, trying to change the LEASE so that it is leased to the doctor's association rather than Glen Rose Medical Center? If so, and let's say then that the district tried to do some kind of management agreement with the doctors where they would funnel money over to Hood County THROUGH the doctors- that would also seem to be patently illegal according to the terms of being a hospital district with clear boundaries.. unless there were plans to no longer fund in any way either the doctors or operating costs at the Pecan Family Medical Center.
P.S. Here is part of an exchange I had with Andrew Johnson who worked at the time (and possibly still does) for J D Sheffield. Note that the first part of this was questions about whether it was even appropriate to bring forth the hospital district election under the section of code they did, but I refer now to the part I asked him about Pecan Plantation.
From May 15, 2013
The first issue that you brought forward was the application of the appropriate code for conducting the referendum election, specifically the population threshold of 75,000. Currently, the Somervell County Attorney, Mr. Andrew Lucas, is looking into this specific issue. After discussing with Mr. Lucas, I would like to give him the opportunity to review this case prior our office taking any action. I feel this issue might be best served by the local authorities that are most familiar with the case. I also believe that members of the commissioners court are aware of this issue.
The second issue is the existence of a Glen Rose Medical Center-owned facility that is located outside of the geographic bounds of what would be the new Hospital District. This is a matter for the Hospital Board to address, as it does appear to be somewhat problematic in regards to funding of this other facility.
My answer back to Andrew Johnson on May 15, 2013
Andy Lucas, county attorney, said today, basically, that people can pick and choose which hospital district provision to file under, despite the fact that we are a county under 75,000. This makes me wonder why that provision is not more explicit, but that’s his comment.
With regard to the Pecan plantation facility, since GRMC under the Somervell Hospital Authority has been using taxpayer funds for the past few years in Hood County without specific authorization, I frankly do not trust that they would do the right thing (particularly since they frontloaded the petition with the same people that are on the authority now) with regard to ensuring that no tax money be used in a different county/different hospital district. Hood County has a hospital district and it includes Pecan Plantation, so there isn’t even a way for those residents to petition to be part of Somervell in order to pay fair taxes that the Somervell residents do. I did see a petition for Hopkins County in which they explicitly said, upon either creation or at some point later, that their resources could be used outside the district. I’ve looked at the 286 that Somervell filed under and I can see nothing that indicates that monies can be spent anywhere outside the district in another district. If possible, I would like to know, if a petition does not explicitly say that monies can be spent outside the district, is is permissible, wink wink, to do so? If you tell me I am unable directly to get an opinion regarding this, would like to know.
and on 8/29/2013 from Andrew Johnson
RE: Request for information on AG opinions for issues involving Somervell County Hospital District
I spoke with the Attorney General's office regarding the details of requesting an opinion as well as what you might be able expect as far as outcomes from an opinion.
First, committee chairs are the only members of the legislature that can request an opinion, essentially on behalf of the committee. Not having gone down this path before, I am not sure how common this practice is nor how willing Chairwoman Kolkhorst (Public Health Chair) might be to make such a request.
Second, the attorney I spoke with indicated that the opinion might not fully address your situation. Opinions only address matters of law, not matters of fact. Without fully briefing her on the situation, today's response is very much just a preliminary assessment of what you might be able to expect from an opinion: The AG could probably address the "public use" issue, but not necessarily the issue regarding out of district operation of the facility. This seemed to be more of a fact finding task. Once again, this is very much based on a brief conversation with an attorney that does not specialize in this area of the law.
Lastly, AG opinions take a minimum of 180 days once the request is received. The attorney stressed that this is a minimum and often times an extension will be issued by the AG's office.
This time frame, coupled with the potential for an incomplete answer to all of the issues that are concerning you, may make an AG opinion a less attractive means to resolve your concerns.
Please let me know how we can be of assistance.
I replied to Andrew Johnson that I intended to turn this in to the sheriff's department. And that I did.