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Leflore County Supervisors vote to obtain $10 million line of credit for the financially struggling Greenwood Leflore Hospital

Tuesday, April 4, 2023, 6:40 pm News Flash Archive

At yesterday afternoon's meeting of the Leflore County Board of Supervisors, the board voted to move forward with obtaining a line of credit of $10 million for use by the Greenwood Leflore Hospital.

GLH is struggling to survive through late summer, when it expects to find out whether its application to be designated as a Critical Access hospital will be approved by federal regulators. The application is on shaky ground, since GLH is too close to three other hospitals in the area. The regulations require a 35 mile separation.

To see our previous reporting on GLH's application, read here: Greenwood Leflore Hospital Board approves submission of Critical Access application to CMS

GLH had also hoped that the Mississippi Legislature would appropriate grants sufficient to keep the hospital alive through late summer, but only $925,000 was allotted. That is less than the average money lost each month by the hospital since the new fiscal year began in October 2022.

The hospital has also spent almost all of the $3.75 million that the city and county gave it in the last 5 months in cash and free utilities.

At the end of February, the hospital had only $800,000 in cash left to cover month to month losses. The February loss was $1.73 million. See our reporting here: Greenwood Leflore Hospital suffers $1.73 million loss in February, down to $800,000 in available cash

The banks will require the pledge of 5 mills of property tax for ten years to secure the line of credit, though if the full $10 million is not drawn down, the full millage might not have to be levied or spent.

According to the supervisors, GLH will have to sign a contract with the county, setting forth the way the money will be spent, how each draw down of the money must be approved by the supervisors first, and agreeing that the hospital will repay the money once it becomes solvent again.

The line of credit discussions have been bogged down for several months, as the supervisors wrestled with how to raise the money without raising taxes. A plan to back the bank loan with pledges of the use tax money, which the county receives from the state every quarter, was nixed by Butler-Snow attorneys when they informed the board that plan would be illegal.

Furthermore, three of the supervisors have publicly stated their lack of confidence in the hospital administration. Comments have been made in board meetings that "the numbers keep changing" every month regarding how much money GLH will need to keep afloat.

Board president Reginald Moore expressed his distrust of the administration in a letter made public March 13 and first reported by the Greenwood Commonwealth. To read the letter, see here: Reginald Moore Letter re: Greenwood Leflore Hospital financial problems

In his letter, Mr. Moore stated:

We believe there is a significant lack of trust in current management and the numbers being provided. We recommend that an independent professional be selected to validate the minimum financial support needed to get the hospital through the Critical Access application process.

Once the need for support to get us through the Critical Access process is determined, we believe we should look for alternatives to provide that support that do not include a tax increase.

Once the level of support is acquired we believe a different CEO should be on board immediately that can reintroduce and sell the hospital to the community and bring our citizens back to their hospital.

But now the supervisors have caved in, and authorized the attorneys to proceed with the line of credit proposal, and pledging up to 5 mills to cover the note for ten years.

The supervisors also approved a contract to hire an independent consultant to audit and review the hospital's finances. The costs will be split by Leflore County and the hospital.

Supervisor Sam Abraham voted against the contract. He had asked the board what the point is of hiring yet another consultant to audit the hospital, when the hospital is audited by outside auditors once a year, and the most recent audit was released in January 2023.

The board of supervisors had previously paid Mr. Sam Odle's firm in Indiana $65,000 to provide consulting on how to keep the hospital afloat. Mr. Odle's services are continuing now at a cost of $12,000 per month.

No money figures for the hiring of the additional financial consultant were mentioned in the open meeting, but the new consultant's contract includes provisions that the county will reimburse the consultant for expenses, including air fare to and from Greenwood. Neither the identity nor the location of the consultant was discussed.

In other news from the meeting:

The Board approved the closure of County Road 22.

The board tabled the approval of the January minutes.

The board was told that there is not enough money in the Use Tax fund to pay the invoices that the board voted to pay with the Use Tax fund. Apparently, the projections of money available and money spent were incorrect.

The board discussed a possible county wide surveillance camera system. The proposal is to get started with 30 cameras.

Several different salary adjustments were approved.

The board went into executive session to discuss potential litigation and a personnel matter, but no action was taken during the secret session.

At the end of the meeting, referring back to the litigation discussed in executive session, Mr. Abraham made a motion that the attorney work with the sheriff in the lawsuit discussed and look into bringing the county insurance and bond into play. Abraham's motion was voted down.

It was never made clear what the litigation matter is, but the sheriff was recently sued to force him to arrest Mrs. Carolyn Donham in the kidnapping of Emmett Till in 1955. No charges are pending against Mrs. Donham, and arresting her at this point would be illegal.

To see our previous reporting on the lawsuit, read here: Emmett Till relative asks Federal Court to force Leflore County Sheriff to arrest Carolyn Donham in the kidnapping of Emmett Till

The Board of Supervisors meeting may be viewed here: Leflore County Board of Supervisors, April 3, 2023

To review our reporting on GLH and its financial woes, please see here: Index of Greenwood Leflore Hospital news articles

John Pittman Hey
The Taxpayers Channel

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