Choctaw County Supervisors agree to pay clinic lease payments

By Daniel Brunty

The Choctaw Plaindealer

The Choctaw County Board of Supervisors agreed to assist the county’s hospital management group with lease payments for the Louisville Clinic during its May 1 meeting held at the Choctaw County Courthouse boardroom at 9 a.m.

During the board’s April 17 regular meeting, the supervisors were given a request from the Choctaw Regional Medical Center Board of Trustees and administration regarding lease payments for the Louisville Clinic, which is under the management of Trilogy Healthcare Solutions. Trilogy is also the sole management company for Choctaw Regional Medical Center, Choctaw Nursing and Rehabilitation Center, all office clinics, and ancillary services.

Toby Butler of Trilogy Healthcare Solutions, CRMC CEO Jamie Rodgers, and members of the hospital’s board of trustees again addressed the board regarding the request. Butler began by reiterating the options that the board could take in regards to assisting the hospital administration with its plan to increase the cash flow of the hospital.

“A big part of our strategy was to reduce the $22,000 a month lease payment on the Louisville clinic,” Butler said.

Butler also informed the supervisors that with the back rent owed to Delta Properties, the owner of the building and property for the Louisville clinic, was at the current time was $362,000. He also discussed the option of Trilogy and the hospital administration purchasing the building and property, which would eliminate the payment of the back rent.

The current lease agreement for the clinic has an end date of June 2018.

“The purchase would result in approximately, based on interest rates and specific terms of the note, a savings of $15,000 for the hospital,” Butler said. “Also as part of the negotiation process, we have closed in on a price for the purchase.”

Butler stated the reason why the hospital’s management and administration approached the board for assistance with the payments.

“It would have saved everyone the time if the hospital had a long track record of stability so we could have gone to the bank ourselves and bought the building outright,” Butler said. “So we approached the county a few months ago with several options. One of those options was to apply funds from potential extra bond payments to purchase the building. Another option was for the county to secure a note for the trustees to borrow the money to purchase the building. The other option was for the county to take over the current working capital note taken out for the hospital during its transition period.”

During the previous meeting, Butler had stated to the supervisors that a decision would need to be preached by May 1 because of a lease payment for the clinic being due. To bring the point even more home, Butler stated that the owners of the building had contacted him the night before the board meeting.

“I got a text message last night that said that by the end of the day today (May 1) we would be getting a demand notice for the back rent and a request that we vacate the property,” Butler said. “I requested that they give us until noon today to give them a response back to them, and they responded okay.”

After speaking, Butler waited for a response from the board. The supervisors then asked questions as well as spoke about their concerns regarding the options that the hospital management and administration had presented.

Some of the supervisors concerns revolved around the reopening of the Winston Medical Center, and the possibility of the clinic losing business in the process. Other concerns stated by some of the supervisors were based on the financial burden this may have on the county, being that the county has continually funded the hospital since its inception. They were concerned with taking on more debt in addition to what the county is already currently paying in regards to the hospital.

The supervisors took the time to also brainstorm some other ideas in regards to the current situation.

After the discussion, the management company presented the board with the possible options for handling the clinic situation.

“One option is if the county took over the payments of the 4.3 million dollar note that was acquired during the startup of the hospital,” Butler said. “The other option is for the county to back the board of trustees and hospital borrowing the money from the bank.”

Following the presentation of these options, the supervisors then discussed the possibility of taking up the current lease payments for the clinic as well as paying off the back rent. The supervisors agreed that making the lease payments and paying off the back rent would be a more frugal option, as well as give the supervisors time to decide if they would like to assist the hospital with the purchase of the building in the future or possibly constructing another building at a different location.

A motion was made by District 4 Supervisor John Shumaker for the board to award the hospital’s board of trustees a grant for $362,000, with the agreement to assist lease payments with $14,500 a month effective May 17, 2017 until June 30, 2018. District 3 Supervisor Chris McIntire seconded the motion. The motion was passed with a 3-2 vote with District _ Supervisor Greg Fondren and District 5 Supervisor Eric Chambers voting against.

In other news, the board:

  • Approved agenda
  • Approved minutes
  • Approved payroll
  • Approved jail inspection