City holds public hearing ahead of MRMC lease vote : KZHE News Blog
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City holds public hearing ahead of MRMC lease vote

by J.D. Bailey on 08/14/20

Numerous local officials gathered Friday morning at the Magnolia City Council chambers for what was brief, yet required public hearing to formally address any public concerns or questions regarding Magnolia Regional Center’s new building lease with the city. The meeting was mandated to take place ahead of a special Magnolia City Council meeting set to take place Monday, Aug. 17, where a council vote and subsequent passage of an ordinance finalizing the lease agreement could take place.

The lease between the city, which owns the hospital building, and the newly-formed Magnolia Regional Medical Systems Inc. (aka Magnolia Regional Medical Center) is the final step in the hospital’s conversion from city-owned status into a separate nonprofit company. MRMC converted to 501(c)(3) nonprofit status in an attempt to generate an additional $750,000 per year in federal insurance reimbursements. The nonprofit status has already been granted, but the lease agreement has yet to be passed by the city council. The MRMC separation process has been underway since May 2019.

The hearing was conducted Friday by Magnolia City Attorney Mike Boyd. Officials in attendance included Magnolia Mayor Parnell Vann, as well as Magnolia City Councilmen Larry Talley, Steve Crowell, Steve Nipper, Jamie Waller, and Jeff White.

MRMC board members and staff were the only public attendees. They included Dr. John E. Alexander Jr., chairman of the MRMC board, and Rex Jones, chief executive officer of MRMC, and others.

A brief discussion between Boyd, Alexander, and Jones took place over the steps to finalize the lease place between the city and MRMC. The city attorney stated that no formal vote on the lease could take place Friday, but anticipated a vote would occur at Monday’s special city council meeting. There, an ordinance will be ready to be voted upon and, if passed, read three times to be made official. If the ordinance passes, the lease agreement will be in place, according to Boyd.

“In essence, the ordinance is set up to do that,” he said.

Any final lease discussions among the council will take place Monday. The mayor had previously brought up concerns over a $500,000 spending buffer for MRMC. The issue was briefly discussed Friday, with Boyd stating that any MRMC purchases over that amount would have to be approved by the Magnolia City Council. Anything under that amount, though, would not be subject to city oversight. The buffer allows for the purchase of equipment and other furnishings for the hospital.

Waller also brought up the buffer issue Friday, stating that he felt fine with the number and did not think any large expenses could be approved without MRMC board passage anyway.

“The hospital board has a level of authority to approve a certain amount with them, but the $500,000 was tied to [the council],” said Waller.

The fact was confirmed by Jones, who added that any purchases over $500,000 would be subject to city council approval. He also said that he was fine with the CEO being limited to a $100,000 purchase limit, but that issue was not part of the lease.

Monday’s meeting is set to take place at 5 p.m.

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