MINUTES OF A SPECIAL BOARD MEETING OF THE BOARD OF MANAGERS OF THE WALKER COUNTY HOSPITAL DISTRICT
August 30, 2018
STATE OF TEXAS X
COUNTY OF WALKER X
The Board of Managers of the Walker County Hospital District, Walker County, Texas met in a Special Board Meeting open to the public at The First National Bank Building on the 6th Floor, The Blalock Room, Huntsville, Texas.
Members of the Board present included:
Chairman, Anne Woodard
Vice Chairman, Judy Emmett
Secretary, Jerry Larrison
Manager, Curtis Montgomery
Manager, David Toronjo
Also in attendance were: Keli Molina, WCHD Administrative Assistant; Ralph Beaty, WCHD Office Administrator; Attorney by phone Janice Davis, Bracewell and numerous guests (sign – in sheet attached).
Agenda Item #1: Call meeting to order.
Chairman Woodard called the meeting to order at 1:10 p.m.
Agenda Item #2: Discuss status of hospital rent payments owed to the Walker County Hospital District (“District”) by Walker County Hospital Corporation (the “Corporation”), and to vote on possible actions to be taken with respect thereto, including any authority to be provided to the Chair of the District with respect thereto.
Chairman Anne Woodard stated we are here to discuss the status of the rent payments that are owed to the district by the Corporation under the terms of the Lease Agreement, it’s a Lease Agreement between the district and the corporation which is HMH and we will discuss that and to vote on possible actions, on speaker phone will be our council who will be able to answer questions for all of our board that will have questions concerning the legality with the Lease and Operating Agreement or the Forebearance Agreement. The Hospital Corporation under the lease Agreement with the Hospital and the district is required to pay rent to the district in the amount of $328, 634.29 of the 15th of each month. The Corporation failed to pay the rent on July 15th, and on August 15th, so the failure to not pay the rent is not an event of default under the lease agreement. We as the board have not sent out any letter.
We can decide today to send out a letter to the corporation on failure to pay the rent under the lease agreement the district has with the corporation and they will have 15 days to pay the outstanding amount, if the corporation fails to pay the amount in 15 days after receiving the letter from the district they will be in default.
We have different options, we can also abate the rent for a stated period of time and possibly have the Chairman of the board myself and 1 other board member to sit down with the Corporation and get a forebearance agreement to outline the terms of the rent and say we are not going to seek the rent payment for a period of time to help the corporation thru this transaction. We have different options to choose as a board to act on today and vote. I’m going to open this up to the board now.
Mrs. Emmett suggested giving the corporation a Forbearance with more time to be able to pay the rent and work with them as a unit, Dr. Montgomery and Jerry Larrison both agreed and will support this. Dr. Toronjo stated it is clear they will not be able to pay rent so the question is how do we deal with this? He also stated there are two documents the Lease & Operating Agreements and if we give forbearance there is a time clock running and I think it is 120 days. Dr. Toronjo said maybe a third choice is to do both, we need to send a letter to start the clock, we have to think about the transaction taking longer or possibly failing. It’s unlikely we will get paid, if we don’t send a letter then we don’t start a time clock. Chairman Anne Woodard agreed we should do both, send the letter and give them more time. Janice Davis said just to clarify the district will need to send out a letter that says if not paid in a certain amount of time the corporation will be in default and to clarify they are not in default now. Janice Davis stated the district has the option and can do both. Jerry Larrison said we are all here to help and we are just going thru this process legally in order to do what we can, Mrs. Emmett and Dr. Montgomery both agreed.
Chairman Anne Woodard stated she is going to vote to support the employees, nurses, and physicians at Huntsville Memorial Hospital who are working so hard to keep our hospital going under very trying times, and I want to thank them all, I think everyone in this room including the press should be supporting the hospital with positive things going so we can get thru a transaction and improve our facility there.
This vote maximizes the ability of the Hospital Corporation to continue the work to identify a solid strategic partner who shares our commitment for a stronger and healthier Walker County, and who is able to make the investment necessary to ensure our residents always have access to the high quality, compassionate health care they need and deserve.
Chairman Anne Woodard stated she has not been asked by one citizen of Walker County what is going on with the district’s budget or open records or anything else to do with the district, but I have been asked many times every day what is going to happen to our hospital? Are we going to have a hospital out there? Is our hospital going to stay open? This board is not happy with some of the things that have happened with the corporation but we need to be working together and I think this vote will work.
Dr. Toronjo made a motion to authorize the chair to hire outside legal counsel notifying the corporation of failure to pay the rent and that we authorize the chair and one additional board member to meet with Mr. Morgan and negotiate the terms of the forbearance agreement within a 15 day period. Mr. Larrison made a second to the motion. The motion passed by unanimous vote.
Agenda Item #3: Consider approving a waiver on penalty and interest on an agricultural account for the Appraisal District.
The property owner paid the undisputed amount timely on January 31, 2018. An era for $173.41 was made by the Chief Appraiser which is the need for this waiver.
Mr. Larrison made a motion approving a waiver on penalty and interest on an agricultural account for the Appraisal District. Dr. Montgomery made a second o the motion. The motion passed by unanimous vote.
Agenda Item #4: Adjourn meeting.
Chairman Anne Karr-Woodard adjourned the meeting at 1:30pm.
_________________________________________
Anne Karr-Woodard, Chairman
Walker County Hospital District
{Seal}
Attest: _____________________________
Jerry Larrison, Secretary
Walker County Hospital District