published Friday, August 2nd, 2013

CEO Kevin Spiegel renews effort to restructure Erlanger board

Erlanger Health System CEO Kevin Spiegel
Erlanger Health System CEO Kevin Spiegel
Photo by Staff File Photo /Chattanooga Times Free Press.

Line of credit OK’d

During the same recessed meeting Thursday, commissioners agreed to open a $90 million line of credit.

In a second attempt to seek the line of credit, commissioners voted to accept the line to be used for various public works projects.

In July, commissioners rejected the same resolution, but after a question- and-answer session Thursday with county staff and a contracted financial analyst, the vote was 8 - 1, with Commission Fred Skillern voting no.

The hangup came over a 12 percent upper limit interest rate the county would use when it came time to convert the credit debt into long-term bonds.

County staff and a representative from PFM, the county’s financial consulting company, explained that having a larger window of interest rates on the bonds would attract more bidders when it was time to sell.

After the meeting, Skillern said despite improving the marketability of the county’s debt down the road, he could not vote for anything that included a double-digit interest rate.

“I’ve played Monopoly before, but I’m real serious about my own money — and I’m even more serious about the public’s money,” Skillern said.

Months after Hamilton County commissioners pulled the plug on legislation aimed at restructuring the governing board at Erlanger Health System, hospital officials extended an olive branch Thursday.

Erlanger CEO Kevin Spiegel told commissioners at a recessed commission meeting that he was talking with state legislators about a second attempt at reforming how the hospital operates.

A first attempt died on the floor of the commission in March, after no commissioner would make a motion to vote on the restructuring of the board of trustees. Many said the commission had been left in the dark about changes to the private act that created Erlanger.

But that was all before Spiegel joined the hospital. He said Thursday he wants to be “open and transparent” with the commission.

That said, Spiegel laid out his plan for Erlanger.

First and foremost, Spiegel wants the hospital to become a 501(c)3 nonprofit organization to compete with other area hospitals. Additionally, he wants to seek funding from a $70 million pool of federal money set aside for safety net hospitals. He also suggested the current Erlanger board be “grandfathered in” to new legislation and be self-perpetuating, so the hospital does not appear unstable.

Most all of that sounds good to Commissioner Fred Skillern — except the self-perpetuating board part.

“If tax money is going into it, I will never vote for a selfperpetuating board,” Skillern said. “My greatest concern is, we’ve got certain people who I felt like they sort of lived off Erlanger for years and years — and hire their friends, family and neighbors. … We’ve had an overhead that’s just unreal.”

Skillern said the county should have some sway over the board as long as taxpayers contribute $1.5 million a year to the hospital.

Along those lines, Skillern would also like to see contributions coming from counties that are benefiting from the Level One trauma center.

That was echoed by Commission Chairman Larry Henry.

Even though the hospital gets money from the state as a trauma center, surrounding counties should kick in, he said.

“The only problem I’ve ever had is … I’d like to see surrounding counties contribute to Erlanger for indigent care,” Henry said.

Otherwise, Henry said he was pleased to hear a report. He asked Spiegel to return to the commission quarterly to give them updates.

Mayor Jim Coppinger said he asked Spiegel to attend for that very reason.

Coppinger said there is no new legislation about Erlanger currently on paper, but he and Spiegel have met with Rep. Gerald McCormick and Sen. Bo Watson to get the ball rolling.

“The state delegation has been extremely helpful in this process, and even in our latest discussions you know they are trying to work with us in the local level,” Coppinger said. “The state could go and pass legislation with no involvement from local government. And they have chosen to involve us, and I’m grateful they’ve done that.”

Spiegel also touched on the financial state of the hospital. He reported Thursday that Erlanger had 68 days of operating cash on hand. In 2011, the hospital had 107 days of cash.

Contact staff writer Louie Brogdon at 423-757-6481 or at lbrogdon@timesfreepress.com.

about Louie Brogdon...

Louie Brogdon began reporting with the Chattanooga Times Free Press in February 2013. Before he came to the Scenic City, Louie lived on St. Simons Island, Ga. and covered crime, courts, environment and government at the Brunswick News, a 17,000-circulation daily on the Georgia coast. While there, he was awarded for investigative reporting on police discipline and other law enforcement issues by the Georgia Press Association. For the Times Free Press, Louie covers Hamilton County ...

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