AG opinion: OCH petition, election invalid without intent to sell


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PDF file File: AG opinion to Orlando Trainer

Carl Smith


The contents of this article have been modified since its original posting.


An opinion from Mississippi Attorney General Jim Hood's Office states both a public petition calling for a vote on the potential sale or lease of OCH Regional Medical Center and the proposed referendum itself are, at this point, invalid as the county has yet to formally vote in favor of pursuing a transaction. 


The letter, penned by Special Assistant Attorney General Phil Carter, states the office is "of the opinion that, as a prerequisite to the filing of a petition seeking a referendum" on a transaction, state law requires supervisors "adopt a resolution describing its intention to sell or lease, with the option to sell the hospital, and publish the resolution in accordance with" statute. 


State law allowing qualified electors to petition the board is inapplicable to the current situation, the letter continues, because statute that outlines the procedure "must be followed in order for a petition ... to be valid." 


The letter goes on to say supervisors cannot legally order an election on the issue at this time since "the matter must be based on a sufficient and lawful petition filed on or before the date proposed in the resolution for the sale or lease." 


Supervisors have neither voted to sell or lease the county-owned health care facility, nor to take in requests for proposals from potential outside suitors. 


The petition effort and calls for an election are not moot exercises, however, and may become applicable if a majority of the five-person board votes to conduct a transaction.  


District 2 Supervisor Orlando Trainer confirmed receiving the opinion and its contents Tuesday and said he hopes fellow board members will join him in supporting the process to determine OCH's future. 


"It's pretty self-explanatory," he said. "Right now, we need to go ahead, follow the process and keep people informed about what we're doing. Regardless of where you are on the issue -- and I agree with (OCH Regional Medical Center Chief Executive Offer Richard Hilton) on this -- it's time to put to rest the saga of what's going on. We have to let all sides see what our options are." 


Oktibbeha County sent its request for clarity to the AG's office last month after Trainer questioned the validity of the pro-OCH petition.  


Supervisors retained the law firm Butler Snow for legal counsel earlier this month as the county continues to explore options with OCH. 


Attorneys are expected to review the past actions involving the county's examination of hospital finances and could, once authorized, help draft an RFP. 


Hospital supporters began collecting signatures to force a potential transaction to the ballots last year after supervisors tasked the Tennessee-based firm Stroudwater and Associates with analyzing OCH's finances and future market capabilities -- one of the first steps required by state law before a governing body can entertain offers for its publicly owned health care facility. 


Stroudwater's report stated 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 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 partners suggested supervisors "explore transactions as soon as practical" while OCH continues to improve its sustainability in case a sale or lease option isn't available. The firm also suggested the hospital could fetch between $20 million and $60 million in a transaction, but state law would require proceeds to first retire OCH's about $25 million in outstanding debt. 


Frank Davis, a former Starkville alderman assisting in the petition drive, confirmed hospital supporters restarted their signature-gathering efforts in December after modifying the document's language to explicitly state Mississippi statute pertaining to hospital transactions. 


That change came after OCH was advised by an assistant secretary of state within the office's elections division that the petition's first draft "was not sufficient" in its language calling for a referendum, but the second draft would comport with the requirements by clearly stating state statute.  


Approximately 1,500 signatures from qualified Oktibbeha County voters are required to force any potential transaction to a county-wide vote. 


The AG's office did not reply to a media inquiry Tuesday, and OCH's public relations wing did not issue a statement on the opinion.


Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch



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