The City Commission of Arkansas City voted 3-2 on May 1 to create a new steering committee for South Central Kansas Medical Center following a recommendation from the hospital board.

The commission also voted 5-0 to appoint former city commissioner Dotty Smith to the SCKMC Board of Trustees, replacing Dr. Nick Rogers.

Smith was one of the commissioners who voted to form the Public Building Commission, which issued more than $30 million in public bonds to construct the new hospital, and place a half-cent sales tax to help to pay for it on the ballot in 2008. That tax will expire next March and discussions about possibly trying to renew it have begun.

Mayor Dan Jurkovich and Commissioner Kanyon Gingher voted against the steering committee. They said after the meeting that it was because they thought there needed to be more discussion.

The meeting, though, began with more talk about the SCKMC Board of Trustees and the charter ordinance that governs the board.

‘800-pound gorilla’

Commissioner Jay Warren said that he had spoken with SCKMC board member Carol Hearne during the weekend.

“I don’t know if any of you remember what she said in that meeting, but she said that she thought the hospital ought to be taken over by the city, and that was in my mind all these weeks,” he said.

The hospital once was a part of the city, but was separated out in the 1980s. Warren said he questioned the reason behind the change, but ultimately said he didn’t know if it was the right move.

“Then we got to talking about the meeting we had (April 27) with the two boards, the work session. I think there’s been friction between the two boards,” he said.

“I’ll say it out loud: We’re the 800-pound gorilla and they’re a volunteer board, and we’re elected by the city of Arkansas City.”

The commission as a whole tends to move faster in making decisions, he said, because it meets twice a month. The nine trustees only meet in full once a month.

“We’re elected by the people, for the people, to make decisions. I don’t think it’s fair for the volunteer board (for) the 800-pound gorilla to be on top of them all the time,” Warren said.

“I think that right now, with the environment we’re in, it’s not going to work the way it is right now,” Warren said.

Keep the board or not?

Warren’s proposed solution? Possibly repealing the charter ordinance that authorizes the board, which would relieve the trustees of their duties.

“We’ve got a debt and the city is responsible for the debt,” he said. “I’d like to suggest, to discuss, that we revoke the charter ordinance.”

“What would that do to us?” Jurkovich asked. The consequences of changing the ordinance were unknown at the time of the commission meeting.

“I would suggest I do some research on that,” said City Attorney Tamara Niles. “I’d like to do some thorough research before we change an ordinance that is 40 years old.”

“I’m concerned about the continuity of the hospital,” Jurkovich said. “I’m scared of what would happen without more research.”

“I think that whether we fill this next seat or not, I don’t think the board size is the problem,” Warren said, referring to two vacancies that had been tabled twice already.

“I think the staff is genuinely working diligently to hold this thing together,” Gingher said.

“I would not want to see any contracts happen, or money be spent (by) the hospital board … that the staff would have to make work.”

Risky purchases

Gingher, during a City Commission board retreat April 28, mentioned two instances in which the board spent money recently. One of them was the purchase of a new treadmill in January.

She said the purchase was not vetted through the hospital’s chief financial officer, Holly Harper, before the board approved the expenditure.

The second was the purchase of Winfield Medical Arts (WMA), which was pushed through without public discussion or much of a chance for citizens to voice their opinion on the acquisition.

WMA has lost $341,647 in the first three months of this year.

Based on a list of projected projects handed to the commissioners during the study session on April 27, the SCKMC board might be looking to purchase Ark City Clinic, as well.

Gingher said the city and the its citizens no longer could afford to take such financial risks on programs that may or may work out financially.

How to proceed?

Jurkovich inquired what Gingher’s solution might be. “Any proposal on how we might get there?” he asked.

“I don’t know. We probably need to have another meeting fairly quickly. I agree with Jay in that this is something that’s been coming on for a while,” Gingher replied.

“I understand the Medicare and the Medicaid problems, and situations and billing and payments, and how all that gets done. And attempting to bring in programs to sustain them.

“But I think we have to provide the core health care services that the citizens expect. I think the (method of) trying to step out and grab hold of new things, and see if it works (must stop). I think we need to get where we know what works, and work out from there.”

“It would be nice if the programs we implement we knew would work,” Hearne said.

“There hasn’t been a lot of willy-nilly spending — there is no money. If something breaks, we have to get it fixed.”

“We do not have the authority to tell the hospital board what (they can’t do)” Jurkovich pointed out.

The commission appoints the hospital board, which is supposed to authorize the day-to-day expenditures and contracts of the hospital, according to the charter ordinance.

Jurkovich hypothesized that the commissioners would have to appoint a replacement board or potentially assume the vacant board positions themselves.

“I think (Kansas statute) requires a board to be in place … but you could probably potentially appoint yourself as the board,” said City Manager Nick Hernandez.

“That was my preliminary conclusion, too,” Niles said.

“So we could meet with the hospital board, and if the hospital board doesn’t take our suggestion, we could repeal hospital board members with a vote of four (commissioners),” Jurkovich said.

“We keep kicking the can down the road. Whether we’re nervous about doing it … we need to make a decision,” Gingher said.

Steering committee discussion

The board of trustees voted to recommend a proposal to create a steering committee with four hospital board members, two commissioners, and other hospital and city employees “as needed.”

SCKMC board chair Hap McLeod shared a proposal with the board that would create a brand-new committee, established as a “special hospital steering” committee, during the last SCKMC board meeting on April 26.

“We haven’t communicated in the past,” he said during that meeting. “We can’t do a lot of this, as you all know, in public meetings. That, in my opinion, is a big part of the problem. If we can’t tell the whole story, the commissioners can’t get the whole story, the public can’t get the whole story. There’s certain things that we have to go into executive session.”

“Originally, (the purpose of) it was to be small enough to not create a public meeting,” Gingher said May 1.

“The new, oncoming board chair (McLeod) indicated that it would be difficult to discuss in public. (The) city manager said, ‘Just do it,’” she said.

“I believe we should keep (steering committee meetings) open to our citizens,” said Commissioner Karen Welch.

“If they want to come to our work sessions, they should feel free to come. The same should be said for the board that we’ve appointed to serve the citizens at the hospital.”

Two issues or one?

In her first appearance in one of the these joint meetings between hospital board members and commissioners, board secretary Karen Zeller offered several thoughts.

“I think there’s only one person in this room who is an expert at running a hospital, and that’s Virgil Watson, our CEO. None of us … has the experience necessary to run the hospital,” she said.

“If we can stop looking at the hospital as only a financial entity that is losing money and acknowledge that it is, without a doubt, an asset to this community, that the medical community provides a valuable service, and without that service, the community would be vulnerable…”

“The fact of the matter is: The big issue for the city is the bonds,” Zeller added. “The bonds right now are pretty much guaranteed with the sales tax.”

The 1.5-percent sales tax will only cover the total bond payments through about 2020 or 2021, city officials estimate, unless the half-cent sales tax is renewed next year. Even then, the one-cent tax currently is set to expire in 2026, leaving 12 more years unaccounted for.

“Do we need to extend the sales tax? Probably so. And if we do, then the bond holders should have great faith in our ability to pay the bonds,” Zeller said.

“I think it’s two separate issues. One is the hospital and the service it provides, and the other is that building that has to be paid for. I wish, that at some point, the city staff, the commission and the press would realize that the hospital is not just a liability, but it is one of our greatest assets.”

Straight money talk

Jurkovich thanked Zeller for her comments and agreed that the hospital is an asset to the community, but also pointed to the finances still being an issue commissioners have to deal with.

“When we have talked money, those members of the hospital board — when we’ve said the hospital is losing money — have taken it personally, as if we were saying the hospital is a bad thing,” Jurkovich said.

“The reality was that the hospital was losing money and there were members of the board that would not acknowledge that to us in public. As if there was a fear (that) saying, ‘Yes, we don’t have enough revenue,’ would mean that it was a bad hospital.”

“I, as a commissioner, want to hear it straight as far as money. And if I don’t, I think there’s some sort of subterfuge or something going on behind the scenes that’s … maybe it’s malicious or neglect or incompetence,” Jurkovich concluded.

“I agree with what you’re saying, Karen (Zeller), and it’s such an asset to our community, but it has to be both protected and respected,” Gingher said.

“But it’s the public we owe this to. …  In the org chart, it’s citizens first, then everybody comes after that. We can no longer risk big money … we’ve got to go small, get it started and then get bigger.”

Steering committee votes

Oestmann made a motion for a steering committee, to be composed of two members from the hospital board, two from the commission and one at-large member.

Some discussion ensued about who could serve as a member at large or how that person would be selected, but no concrete answer was found initially.

Oestmann favored hospital board applicant Michael Taylor, but the name gained no traction.

“Would this board be open to the public?” asked citizen Vicki Jackson. “Nope. … And the intent was that they would not be public,” Gingher said.

“The press would not have to be notified,” Jurkovich added.

Oestmann’s motion was seconded by Welch.

Jurkovich stated he would like to see the committee set up in such a way that its meetings would be open to the public.

Welch called the question, mandating an immediate vote. However, the motion failed 4-1, with only Oestmann voting yes.

Jurkovich made a separate motion, with the steering committee comprising three members from the hospital board, three from the commission and one at-large member.

The motion was seconded by Gingher.

“It would be open to the public, (but) it doesn’t mean that we would have to entertain any questions from the public,” Jurkovich said.

Warren pointed out that the committee would have the option of going into executive session for topics that are exempted from the Kansas Open Meetings Act.

Gingher began to speak, but the question was called by Oestmann. The vote was 3-2, with Gingher and Jurkovich dissenting.

Both confirmed after the meeting that their votes were because they were not given time to discuss the issue fully before the vote was called.

Board composition

Although it resulted in the formation of the steering committee, the discussion originally began regarding what to do about the continuing vacancies on the board.

“We’ve been discussing changes or keeping it (as it is). We have this meeting and one more before the next board meeting of the hospital. So I would suggest that we appoint people or do something different by then,” Jurkovich said.

He then made a motion to appoint Smith to the board of trustees, which was seconded by Gingher.

Jurkovich stated that Smith was the only applicant to speak to him about being appointed to the board.

However, Derek Koller appeared before the entire commission during a meeting April 3 to speak about his interest in being appointed.

Koller said he has 10 years of experience as a paramedic including his time at William Newton Medial Center, as well as working in the Wesley Medical Center emergency room.

Smith was appointed with a unanimous vote.

Welch’s motion to appoint Jonathan Hansen to the second board vacancy died on the floor when no second was given. But he later was appointed unanimously to the steering committee.

The second seat on the board will remain open for the time being, after the agenda item was tabled until the next commission meeting May 15.

Sales tax question

While the hospital board also proposed a half-cent sales tax to the commission, there was no discussion of this issue May 1.

Inquiries still are being made to several entities to explore certain options that might be available with the wording of the tax question.

Hernandez and hospital attorney Otis Morrow still were in discussions at the time of the commission meeting regarding those options.

“What it really comes down to is the bondholders, and who’s going to buy these bonds and the securities they want.” Hernandez said.

“If we can get the sales tax lowered through this whole thing, that would be awesome. It’s one of those things you really have to take your time on.”

SCKMC board members present at the meeting were Hearne, Zeller and treasurer JoLynn Foster. Morrow and Watson also were present.

In other business, the commissioners:

  • issued proclamations designating May as National Foster Care Month, May 3 as National Day of Prayer, May 5 as Cinco de Mayo Day, May 6-12 as Public Service Recognition Week, May 6-13 as National Music Week, and May 13-19 as National Police Week and May 15 as National Peace Officers Memorial Day in Arkansas City.
  • recognized and congratulated Tatum Norwood, Arkansas City’s Outstanding Student Award scholarship recipient for 2017-18.
  • approved an agreement for services with Kansas Municipal Utilities for the provision of comprehensive job training and safety services to participants in its Safety and Compliance Management Program.
  • tabled until a second reading May 15 an ordinance granting a conditional use permit to allow a lodging or craft house in an R-2 Medium-Density Residential District, located at 2526 Valley View Drive, that had been requested by Lori Newsome. The permit was approved unanimously by the Planning Commission.
  • tabled until a second reading May 15 a charter ordinance amending provisions of Charter Ordinances 19 and 20, exempting such city from state statutes relating to libraries, and providing substitute and additional provisions. This ordinance would authorize an additional mill of property taxes for capital improvements to the library building and makes changes to its board.
  • held two executive sessions, totaling 25 minutes, to discuss data relating to financial affairs or trade secrets of corporations, partnerships, trusts and individual proprietorships, in order to discuss a potential retail business development.