News and Tribune

Business/Money

April 19, 2014

Floyd council president: Hospital sale could net county millions

Many county officials not interested in selling Floyd Memorial Hospital

NEW ALBANY — In 1953, Memorial Hospital of Floyd County opened its doors at 1850 State St. in New Albany. At the time, it was state-of-the-art and was larger and more advanced than the facility it replaced, St. Edward’s Hospital.

There have been numerous changes over the years, both to the facility and advancements in medicine. The name has changed to Floyd Memorial Hospital and Health Services and only one small section of the building looks like it did 60 years ago.

But despite the changes, mergers and advancements in the medical field, one thing has remained the same at the hospital — it’s owned by Floyd County.

But for how long?

With the county’s financial state, the idea of selling the hospital to a private company has been brought up as a way to dig out of the hole. Floyd County Council President Jim Wathen is once again leading the discussion.

Wathen said recently that it may be time for the county to explore the possibility of selling the hospital, which he estimates could be worth $200 million-plus. He said the money could be put in a trust, and Floyd County could use the interest income to get back on strong financial footing.

However, he seems to be the only voice in favor of looking into such a move.

“No one can give me one reason, except for an emotional one, to keep the hospital,” he said. “I think that should be looked at before we consider raising taxes.”

Wathen said something has to be done, other than talk. He said if someone can show him that everything has been cut that can be cut, and no other cost-saving or revenue-generating measures are available, then he would consider a tax hike. But he said that has not happened. So, he said, it’s time to look at other revenue sources.

“Right now, we are sitting on an asset of $200 million, and we are struggling to give the treasurer $7,000 to print and mail out property tax bills. I don’t know but that doesn’t make much sense to me,” Wathen said.

Floyd County has been dealing with financial struggles since last year. The murder trials of David Camm and William Clyde Gibson, along with incorrect figures given to council members from former Auditor Darin Cottington when preparing the 2013 budget — which eventually led to a $2.4 million deficit — have been blamed as the main culprits for the county’s financial woes.

A committee formed recently to look at the possibility of selling property to help generate funds, which includes the North Annex along Grant Line Road, the Reisz Building along Spring Street and the O’Brien property near Georgetown.

The Department of Local Government Finance approved Floyd County’s 2014 budget, but it’s projected that there will be only $18,000 left in the general fund at the end of the year. Appropriations made in January and February by the council were rejected by the DLGF because there was not enough money in the county coffers to cover the expenses.

Wathen said it’s time for county leaders to consider selling assets, including the hospital, in order to get out of the financial mess. He said until some revenue is generated through property sales or other means, all additional future appropriations should be denied.

“There should be zero [additional appropriations] until we get back on solid ground,” he said. “We need to look at every aspect of county government to see where we are duplicating services. There are people on the council who say they want to raise [economic development income tax], put [a local option income tax] in place, but they won’t say it in public.

“No one wants to take responsibility, but I will.”

Commissioner Steve Bush said he is not in favor of the idea of selling the hospital, but would be willing to meet with other county leaders and the hospital board of trustees to discuss the issue.

“I am always the type of person to sit down and listen to options, to look at the budget and the pros and cons,” Bush said. “I think it boils down to what do you want to offer the community. You have to look down the road.”

Bush said if a private company bought the hospital, it would go on the property tax rolls, but he noted what would happen if the company decided to turn the building into something else, or if it went bankrupt and had to close its doors. Bush said the hospital also provides millions of dollars in indigent care to the community, and provides medical services to inmates in the Floyd County Jail.

“But I’m open minded and willing to have that debate,” he said.

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