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Retirement resolution passed by HCHD board

December 20, 2011

The Hutchinson County Hospital District has passed a resolution in regards to the district retirement plan.
The resolution, passed by the board at its regular meeting last Monday evening, will terminate the 457b – HCHD Employee Retirement Plan and give employees access to an alternate program.
Dennis Jack, CEO of Golden Plains Community Hospital, said that when the district ran and operated the hospital, they had a retirement program that was allowed only for government entities.
“Since the hospital operation was sold to a private company, we had to establish another type of retirement program,” he said. “We elected four years ago to keep the two retirement programs separate, but it was becoming too difficult to keep records for both.”
Jack said both programs had to be audited, which only generated extra costs. By terminating the HCHD retirement program, anyone with money in the old retirement account will be allowed to move their funds to the hospital’s current program, without tax effect. He said it would save the employees money and the district money as well.
The board also discussed subsidies with the Stinnett and Fritch EMS unit and the date of agreements expiration. Jack said both programs have been working with an extension of the agreements that were put in place last year.
“It is the intent of the board to renew them, but with some more clear understanding of reporting that comes along with the subsidies,” he said. “The board is still interested in combining the programs as it feels will better serve the people of Hutchinson County.”
During his CEO comments, Jack shared with the board his intentions to submit two letters to the USDA, one pertaining to the addition of ProjX funds added to the new hospital contact and the other permission to incur additional debt.
Jack said that when the district did its original application with USDA for its loan for the new hospital facility, it had to have a contract with the architectural firm ProjX. It had spent $170,000 to get to the point of all the drawings that were required by the USDA, and felt it could use its administrative funds (budgeted at $1,000,000) to reimburse the ProjX.
“Those of course included lots of other expenses, but that was believed to be an acceptable use of our feasibility expenses,” he said. “Well, the USDA didn’t see it that way, and in fact didn’t allow fund the last three invoices from ProjX as they had already been paid all their contractual amount.”
Jack said it was great that USDA was watching the dollars carefully, but it was problematic for the dollars that still needed to be paid to ProjX. The only answer was for the district to request a change order to the contract with ProjX.
The other letter, which pertained to the incurring of additional debt, was for permission to get a loan to build the office building the district needs to house its doctors and clinics.
“We believed that since we are going to be about $2,000,000 under the full original loan amount when we finish the project, that those funds could be used to build an office building,” Jack said. “USDA didn’t allow that.”
Since USDA is the lien holder on the loan for the new hospital, along with Happy State Bank, the district needed to get permission to seek any additional debt before it could embark on any other loans.
Jack said both of the letters were answered to the affirmative on Thursday. The contract with ProjX will be modified and the district can pursue an additional loan from any source to finance the medical office building.
Discussion was held on the expiration of terms for members on the board. Both Jock Lee and Joe Mihm are elected members of the board whose terms will come up this spring. Jack said there has not been word from either if they are going to run for reelection.
John Edgington, one of the appointed members of the board, is also seeing his position expire as well. All three are eligible for reelection or reappointment to the board.

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