The newly elected Grays Harbor County Public Hospital District 2 commissioners will hold their first public meeting Aug. 28, beginning the process of converting private, non-profit Grays Harbor Community Hospital into a public entity.
The meeting will take place at 1 p.m. in Grays Harbor Community Hospital’s conference room C on the first floor.
Six members of the seven-person board were sworn in Tuesday afternoon at a ceremony in Montesano. Armando Juarez Jr., Dr. Ryan Farrer, Pete Scroggs, Miles Longenbaugh, Andrew Bickar and Robert Torgerson all participated in the ceremony after the primary election results were certified the same day. Commissioner Maryann Welch did not attend the ceremony.
Each commission seat will eventually carry a six-year term, though to offset their elections, two of the these first commissioners will run again next year, two will run in 2017, and three will be up for re-election in 2019, according to Grays Harbor Auditor Vern Spatz.
It was originally thought that these first commissioners would hold two-, four- and six- year terms, but Spatz said Wednesday that, on further investigation, each would be a year less since special district elections always fall on odd-numbered years. Which of the current commissioners get the longer terms is determined by overall vote numbers — the highest vote-getters garner the longest of the initial terms.
Spatz said, based on that criteria, Longenbaugh, Farrer and Juarez will serve five-year terms and be up for election in 2019, Torgerson and Welch will serve three years and face election in 2017, while Bickar and Scroggs will be back on the ballot next year.
Hospital CEO Tom Jensen previously said that commissioners will most likely take care of book keeping items — like deciding on board structure and electing leadership — at their first meeting.
Many of the big decisions commissioners will need to make will take place over the next few months so that the hospital can begin collecting higher Medicaid reimbursement from the state as quickly as possible under a bill passed by the Legislature in February.
Jensen has said that if the plan isn’t in place to transfer the assets by Jan. 1, that higher reimbursement rate could be in jeopardy for next year.
About 75 percent of Grays Harbor Community Hospital’s patients are covered by state programs, giving the hospital a “payer mix” that isn’t conducive to running a profitable business, Jensen said.
The hospital has been running between 2 and 3 percent in the red for about three years and budgets are usually balanced using reserve funds, Jensen explained in an April interview. In 2013, the hospital had about $16 million in dwindling reserves and $106 million in expenditures. So securing the higher reimbursement is critical to stabilizing the budget, Jensen said.
“It’s not a service issue. If I moved this facility to Bellevue, we wouldn’t be having this conversation,” Jensen said. “It’s not a service issue, it’s a payer mix issue.”
The transfer of assets from the non-profit to the hospital district will not take place overnight, and will be decided in negotiations between the new public district and the existing non-profit hospital. The assets — including buildings, equipment and property — in addition to the bonds and other debt will all be part of that negotiation, Jensen said.
“The goal would be that the two organizations did what would be the best as a community asset — the least expensive, the least obtrusive, and to make the bondholders happy with the debt,” he said.
The new board could also levy property tax of up to 75 cents per $1,000 of property value without a vote of the people. Jensen explained that doing so could be important in allowing the district to borrow money.
“A public hospital district can’t leverage it’s assets,” Jensen said. “You can mortgage your home if you wish to purchase something — public hospital districts can’t do that. So they have to secure (their debts) to something, and what they normally secure them to is tax revenue.”
Meetings held by the new commissioners will be open to the public, so citizens will be able to watch as the elected officials make their decisions.
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