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Pending new law puts squeeze on MRMC plans

Ocala, FL - March 13, 2012

Published in the Ocala Star-Banner Tuesday, March 13, 2012 at 12:03 p.m.

Munroe Regional Medical Center is shown on Thursday March 1, 2012. MRMC is Marion County's public hospital.The outlook for selling or leasing Munroe Regional Medical Center looked grim for some hospital trustees on Monday as they reviewed proposed legislation that would impose severe restrictions on the process if trustees don't meet a Dec. 31 deadline.

The proposed law, expected to be approved by Gov. Rick Scott, would take away almost all say from trustees concerning what could be done with proceeds from the sale or lease of a hospital.

 "In many ways, the new law is a game changer," Mike Bittman, a trustee lawyer, told trustees during a Monday meeting to review leasing or selling the 421-bed public hospital.


Munroe Regional Medical Center is shown on Thursday March 1, 2012.
MRMC is Marion County's public hospital.


Munroe is owned by the state-sanctioned Marion County Hospital District and overseen by the seven trustees, who are appointed by county commissioners. The trustees currently lease the hospital to Munroe Regional Health System, Inc., which is overseen by a 13-member board, some of whose members also are district trustees.

The hospital trustees are exploring leasing or selling Munroe or creating a partnership to generate more money for the health center.

The anticipated new deadline left some of the seven trustees unsettled as to whether a deal with a private healthcare company could be struck in time.

"With the best of intentions, I don't know of any transaction, even half as complicated … that can be done in eight to nine months," said trustee Kulbir Ghumman.

At stake is how potentially hundreds of millions of dollars from a sale or lease would be spent.

Under current law, trustees could spend proceeds on local health-related issues as they saw fit. If trustees closed the sale or lease after 2012, the new law would require half the money go to the County Commission to be used for health-related economic development and healthcare job creation. The other half would have to be used to pay for local indigent healthcare among any of the county's healthcare providers offering that service.

Driving the trustee search for a hospital buyer or new leasee is an earlier hospital study that showed Munroe would need $150 million in capital improvements to remain competitive. That's money the hospital doesn't have. Meanwhile, the hospital has $100 million in debt. A sale or lease would likely pay off that debt and result in the needed capital improvements, as well as potentially hundreds of millions of dollars in a lease or purchase price.

"It (meeting a Dec. 31 deadline) would definitely be a crunch," said Ed LeMaster of Ponder & Co., which is assisting the trustees.

LeMaster said as long as trustees narrow their current list of four candidates to one in the next couple of months, the deadline is attainable.

Meanwhile, trustees also received some potentially gloomy news about possible public tax support for the hospital.

Trustees would have to get County Commission approval to get a sales tax referendum on a November ballot. A capital improvement, half-cent sales tax would generate about $16.5 million annually, about $5 million less than what the hospital needs to remain competitive.

A half-cent sales tax to fund indigent care would generate the same money, but the funds would not go all to Munroe. The proceeds would be shared among other healthcare providers also serving the medically poor and indigent.

County Commissioner Charlie Stone, who was at Monday's trustee meeting, said he would support a sales tax question going to referendum only if he hears from the public calling for the measure.

Another option: a property tax to support the hospital. But county commissioners have said they would not support this.

Trustee Chairman Jon Kurtz, who participated in the meeting via telephone, said he didn't see how trustees could pursue both a tax option and continue trying to lease or sell the hospital.

Trustee Joe Hanratty said the trustees should continue with the lease and sales search. Trustee Dr. Mike Jordan asked that trustees make no decision Monday, but pursue both options and decide if they wanted to drop one during their next meeting. The trustees agreed.

The trustees will meet again March 26.


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