Oktibbeha County supervisors voted 3-2 Monday to hire the Jackson-based law firm Butler Snow for legal counsel as the county deals with the future of OCH Regional Medical Center.
The firm’s hire is an indication a majority of supervisors are willing to continue forward with a process that could lead to a potential sale or lease of the hospital.
Butler Snow lawyers are expected to review the past actions involving the county’s examination of hospital finances — specifically, the Stroudwater and Associates’ report suggesting supervisors collect offers for the publicly owned health care facility — and could, once authorized with a majority board vote, help draft a request for proposals and analyze issues involving a referendum on any proposed transaction.
“You need counsel to help you address the various legal hurdles … regardless of what direction you go,” said attorney Sam Keyes. “We would not be coming to the table to push any particular policy approach to this. At the end of the day, that’s your job as … the owners of the hospital, in consultation with the hospital as well and its board of trustees, to figure out what your options may be. Our role is just to help you through that process and to make sure that it’s done in a proper, legal manner … as you go through that minefield, so to speak.”
Supervisors have not yet voted to take any further steps involving OCH or a potential deal, nor have board members publicly said they will pursue a transaction. Stroudwater’s report, however, said supervisors should seek proposals so they can make an educated decision about whether to retain ownership of the hospital.
Butler Snow was hired after a brief presentation from Keyes and John Healy, who specializes in the health care industry and related transactions, but a cost for its services was not provided at the board table.
District 2 Supervisor Orlando Trainer, District 4 Supervisor Bricklee Miller and District 5 Supervisor Joe Williams supported the hire, while District 1 Supervisor John Montgomery and District 3 Supervisor Marvell Howard opposed.
A contract is expected to be delivered to supervisors at an upcoming meeting and could bill the county for the amount of hours lawyers work on the issue or set block prices for certain actions or performance thresholds.
Potential ballot issue
One issue the firm is expected to address: an expected countywide vote on a transaction.
A special election is expected if supervisors issue an RFP, find a suitor for the hospital and vote to initiate a transaction since pro-OCH supporters have begun collecting signatures to force such a decision to the polls.
Approximately 1,500 qualified voters could block the board’s final authority and send the question to the polls. Otherwise, a simple majority of the five-member board of supervisors could have final say whether to sell or lease OCH.
The county previously sent a letter to Mississippi Attorney General Jim Hood’s office inquiring about the validity of the petition and if the county can place such a ballot question alongside November’s special election for chancery clerk.
District 4 Supervisor Bricklee Miller said she favors letting “people have their voices be heard” at the polls but asked Healy if a potential transaction can be fully released to the public prior to a vote.
Healy said potential buyers or lessees want to maintain an element of confidentiality through these types of processes. In some situations, he said, buyers have pulled out of deals because information was leaked to the public.
“Legally, can you do it? We’ll have to look and see. The statute contemplates that this body makes a decision to move forward, and then the referendum is available to the people as a kind of check and balance,” he said. “Whether you can reverse that, again, that’s something under state law that we’d have to take a look at.”
Stroudwater’s 2016 report suggested the board “explore transactions as soon as is practical” while OCH continues to improve its sustainability in case a sale or lease option isn’t available.
It suggested the hospital has an annual $3 million to $4 million gap between current operating levels and the amount needed for capital investments to occur, but OCH Chief Executive Officer Richard Hilton refuted those claims and said the analysis was filled with misleading data that failed to follow generally accepted accounting principles, understated the hospital’s income and overstated its expenses.
Stroudwater suggested the hospital could fetch between $20 million and $60 million in a transaction, but state law would require proceeds first retire OCH’s about $25 million in outstanding debt.
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
You can help your community
Quality, in-depth journalism is essential to a healthy community. The Dispatch brings you the most complete reporting and insightful commentary in the Golden Triangle, but we need your help to continue our efforts. In the past week, our reporters have posted 37 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.