May 30, 2000

PRESENT: John F. Watts, Chairman
David S. Odom, Vice Chairman
Wesley Bolick
Joel C. Harbinson
W. Darrell Robertson
STAFF: Rick French, County Manager
Ed Hedrick, County Attorney
Keith Hertzler, Chamber of Commerce, EDC
Jamie Millsaps, Clerk to the Board
Ray Warren, Sheriff
Ken White, Finance Officer
HOSPITAL:  Jerry Campbell, Hospital Attorney
Marie Chapman, Liaison to Medical Community/Public Relations
Evelyn Clemmons, Interim Administrator
Charles McGinnis, Project Manager
Bill McSwain, Hospital Consultant
Lee Sharpe, Hospital Board Chairman
Richard Walker, Hospital Board Vice Chairman
Jimmy Moore
Danny Price
Lucille Warren


The Alexander County Board of Commissioners held a budget work session on May 30, 2000 at the Social Services Building.

Chairman Watts called the work session to order at 6:32 p.m.

Commissioner Odom stated that Bud Chapman was in Alexander Community Hospital. He asked that everyone remember Mr. Chapman and his family in their prayers. Mr. Chapman has been very important to the fire departments. He has helped and donated his time in many ways and he is very much appreciated.


Chairman Watts stated that he, County Manager Rick French, Finance Officer Ken White, County Attorney Ed Hedrick, and Hospital Attorney Jerry Campbell had a conference call with Bond Attorney Peter Michel during the afternoon of Thursday, May 25, 2000. Mr. Michel reiterated that it is unconstitutional under North Carolina law for Alexander County to assume the indebtedness of the Hospital without a public referendum. Mr. Michel informed the group that it would be lawful for the County to retain the title to the Hospital if a general release is drawn up releasing the County from any debt incurred by the Hospital Board.

In the past, a bond referendum was discussed. This would allow the public to vote on the County ownership of the Hospital in return for an approved figure (i.e. $2.5 million). A referendum must be held no sooner than 90 days after the last primary which would be September. It was agreed that a bond referendum was not a good choice due to the fact that the Hospital is in a state of urgency and action needs to be taken now. Also, the Hospital Board felt that the bond referendum may not pass and would cause uncertainty among employees and creditors.

If the County retains the title, there will have to be an audit and an inventory of the Hospital assets. Charles McGinnis requested that the County and Hospital's audit firms meet together since the fiscal years are now the same. The Board requested that Rick French, County Manager, and Charles McGinnis speak to their respective audit firms about meeting with each other. Mr. French stated that this would need to be completed by June 30, 2000.

Commissioner Harbinson stated that if the Hospital doesn't make it, the property will belong to the County. The property could then be sold for approximately $8.7 million.

Ms. Clemmons stated that the Hospital is up for accreditation on July 6. The Hospital Board feels certain that the Hospital was be reaccredited.

As of June 30, 2000, the County will have appropriated a total of approximately $600,000 to the Hospital during the 1999-2000 budget year. The County has appropriated $500,000 to the Hospital during the 2000-2001 budget year for emergency services.


Chairman Watts gave each Commissioner a chance to speak directly to the Hospital Board and ask any specific questions. Commissioner Harbinson stated that the purpose of this work session/meeting was to make sure both parties were coming from the same wavelength. There has been some confusion in the past between the two boards. Commissioner Harbinson also stated that he wishes for the Hospital to succeed and he is in support of all their efforts.

Commissioner Bolick stated to the Hospital Board that he was interested in what steps were being taken to improve the bottom line of the Hospital and how they are planning to get out of debt. Commissioner Bolick stated that he felt the Hospital wants to grow and staff are trying to improve and add on instead of cutting back. Commissioner Bolick also inquired about the legality of having a hospital tax in districts.

Commissioner Odom asked if the County could lease the property to the Hospital Board without the debt showing up on County books. Jerry Campbell, Hospital Attorney, stated that it could be done. The County will not be liable for loans between the Hospital and creditors.

Commissioner Robertson asked if BB&T and Catawba would agree with the deal between the County and the Hospital. Commissioner Robertson also asked how the Hospital would benefit from the agreement for the County to retain the title; the Hospital would still be responsible for the debt. Commissioner Robertson asked if the property title will be transferred back to the Hospital after debts are paid and the Hospital is stabilized.

Commissioner Watts stated that he believed BB&T and Catawba would feel more comfortable about receiving money if the property belonged to the County. The County has the power to tax which allows them to borrow money and receive grants more easily than the Hospital Board. Creditors are more likely to trust counties. The Hospital would possibly have a greater chance of receiving grants and loans if the County retained the title to the Hospital property.

The Hospital Board began answering questions at this time. Lee Sharpe passed out an executive summary which explained steps being taken to improve Hospital functions. The Board of Commissioners were given an explanation of each item listed. The executive summary was presented as follows:

  1. Lee Sharpe stated that all information for the Duke Endowment Foundation grant has been forwarded to the Foundation for the preliminary meetings held on May 1.
  2. Mr. Sharpe stated that the management team met with Mickie Smith of Larson, Allen, Cherry, Bekaert, and Holland (auditors) about the need for a chargemaster review. The chargemaster is the basis for appropriate charges and payment. An overall review has not been done in about 4 years. The cost of a comprehensive review could total as much as $10,000.
  3. Mr. Sharpe stated that a letter was received from Catawba Memorial Hospital the first week of May regarding the increase of Physical Therapy Services by $20,000 for the next contract year. The Hospital is looking at other options including partnering with the Health Department to jointly employ therapists and assistants.
  4. Evelyn Clemmons met with Ruth Jarrell, Hospice Director on May 24 regarding utilization of inpatient beds for Hospice care. The Hospital has had an agreement with Hospice for several years for care at a rate of approximately $400 per day. The Hospital is negotiating the possibility of providing terminal care to Alexander County residents through Hospice. Estimated annual revenues total $57,600.
  5. Marie Chapman stated that a conference call with Serge Dihoff of the NC Office of Rural Health was held on May 15 for his opinion on skilled nursing beds. There is no certificate of need available in this area for skilled beds since Valley Nursing has 180 beds, 70 percent occupied. Bill McSwain stated that swing beds could be used as long-term beds.
  6. Mr. Sharpe stated that the VA Office in Asheville has been contacted. It was confirmed that there is no possibility of getting reimbursement for VA inpatients. At the present time, VA patients are admitted to Alexander Community Hospital for stabilization but are then transferred to a VA hospital.
  7. Ms. Clemmons stated that CFG Associates of Atlanta has been employed to do account recovery on bad debt accounts on current accounts receivable. On the present $3 million in receivables, this could net as much as $500,000 in 6 months. Detailed information will be given to the County when available.
  8. Ms. Chapman stated that Dr. Ellores Brailey is interested in establishing a practice in Alexander County for women's services and, if granted privileges, will do so within 60 days. Dr. Brailey could produce an estimated $120,000 annually of revenues. Ms. Chapman stated that she would like to establish a focus group for women to tell what they would like to see happen in this area.
  9. Ms. Clemmons stated that Dr. Hans Hansen, anesthesiologist and chronic pain management, is planning to increase his presence at the Hospital to 1/2 day weekly and every other Saturday. This could double revenues from his services to $216,000 annually.
  10. Mr. Sharpe stated that negotiations continue to maintain Dr. Amie Beloy in Taylorsville and bring Dr. Gail Hamilton-Brandon to the area. Dr. Peter Ho, urologist from Lenoir, who has clinic at Alexander Community Hospital 1/2 day weekly, has agreed to schedule minor surgery and cystoscopy at Alexander operating room beginning in June. Projected revenues total $72,000 annually.
  11. Mr. Sharpe stated that Dr. Richard Griffin, ophthalmologist who sees patients in Dr. Papazekos' office weekly, is being encouraged to bring his surgery patients back to Alexander. Projected revenues total $180,000 annually. Dr. McKinnon, also an ophthalmologist, could potentially bring 3 patients per month with a revenue of $108,000 annually.
  12. Ms. Clemmons stated that negotiations continue with Diamond Healthcare for treating substance abuse patients for medical detox. This could produce an additional 3 patients monthly with projected revenues totaling $180,000 annually.
  13. The contract with Western Piedmont Anesthesia Associates will end June 1. Dr. Murray Bartley and Dr. Hans Hansen will continue to provide anesthesia service to patients.
  14. The Hospital Board has a contract with First Council, Inc. to conduct a major fund raising campaign for the Hospital. Estimates made by Bob Dawson of First Council for a campaign are $1 to $1.5 million over 2 years.

Projections for the Hospital total $933,000 revenues and $5,000 expenses.

Commissioner Harbinson stated that the Town of Taylorsville should contribute to the Hospital since it is located directly in the town limits. Mr. Sharpe stated that the Hospital Board is planning to request that the Town contribute to the major fundraising campaign effort.

Commissioner Robertson suggested that the Hospital's depreciation fund should be put off for 1 year. The depreciation fund is used for upgrades, equipment, etc.

Mr. Sharpe stated that the Hospital is willing to provide documented statements on patient flow and income, doctor referrals, etc. which will be delivered to the County office weekly.

The Board inquired about the Administrative Supervisor position. Ms. Clemmons is currently serving as Interim Administrator at the Hospital. Ray Warren, Sheriff, stated that Ms. Clemmons has done an excellent job and is recommended to serve as Administrator. Mr. Warren presented the Board with letters from several doctors, staff, and residents commending Ms. Clemmons as Interim Administrator.

Mr. Sharpe stated that the money appropriated from the County to the Hospital so far has been used for debt owed to Catawba Memorial, equipment debts, information systems, new lab equipment, and the BB&T note payment.


Commissioner Harbinson made a motion to adjourn at 8:40 p.m. and to reconvene in Closed Session. Commissioner Odom seconded the motion. The Board voted unanimously in favor of the motion.


    John F. Watts, Chairman          Jamie C. Millsaps, Clerk to the Board