Hospital and tribe make a deal
June 27, 2012
By Michele Mihalovich
Hospital board agrees to terms in early payoff agreement
Snoqualmie Valley Hospital commissioners agreed to accept an early payoff deal with the Snoqualmie Tribe’s purchase of the current hospital and land, but those who voted yes weren’t too happy about it.
The tribe bought the hospital and land for $30 million in 2008, and agreed to let the hospital continue to operate it until it builds a new facility.
The tribe, which has been making monthly payments toward the purchase, was expected to pay $25 million in a balloon payment in May 2015, but had approached hospital administrators about paying it off at the end of July with a significant discount.
Jay Rodne, attorney for the hospital district, said at a June 20 special meeting that the tribe is proposing to pay $14 million in cash July 31.
In an email to the Star, Rodne said the total value of the Snoqualmie payoff package, amounting to $20.6 million, breaks down like this:
q Future value of cash payment — $16.8 million
q Future value of cash paid to date — $2.1 million
q Value of hospital not having to pay rent at old facility while it waits for its new facility to be built — $1.6 million
“That’s just a bunch of creative accounting,” Commissioner Gene Pollard said. “The bottom line is you’re asking us to accept $14 million for a $30 million property.”
Commissioner David Speikers said he had similar feelings when he first heard about the tribe’s proposal.
“I was very taken aback by this deal,” he said. “However, we’re not sure whether the tribe would have paid in 2015 based on the fact that they’ve already extended the balloon payment twice already. I guess my feeling is that a bird in the hand is worth two in the bush. I think we should take what we can versus not having a (new) hospital for eight to 10 years.”
“Well, this $14 million bird has got to be the most expensive bird in history,” Pollard said.
Commissioner Kevin Hauglie said the package “puts us in a better financial position, even with the loss. We have an opportunity before us — not discounting Gene’s concerns or emotions — but I think this is the best move.”
During public comment, citizen Herschel Backues, of North Bend, said, “This is a shock. The tribe owes $28 million and you’re going to accept half. You can spin it any way you want, but this is ridiculous. This is just awful.”
Robert Hinzman, a Snoqualmie tribal member, said, “We weren’t given a fair assessment of the building and that’s why we’re here. We didn’t get a fair shake because your property wasn’t worth what you sold it to us for. We want to do what’s right for you and us. We think it’s a fair discount. Now, I’d like to see us move forward together.”
Roger Wood, of Seattle, who is married to a Snoqualmie tribal member, said he’s wondering why the commission isn’t trying to negotiate a better deal with the tribe.
“Why just accept this?” he asked.
Speikers said, “It is my understanding that the hospital did have offers and counter-offers with the tribe … I agree with Mr. Wood and would have felt better if we could have negotiated a couple million more. But I heard that this was the bottom line and final offer.”
Commissioners Hauglie, Speikers and Joan Young voted to accept the tribe’s offer; Pollard voted against it.
Commissioner Dick Jones recused himself from the discussion and the vote. He said his past employment and current consulting work with the tribe may present a conflict of interest.
Michele Mihalovich: 392-6434, ext. 246, or editor@snovalleystar.com.
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4 Responses to “Hospital and tribe make a deal”
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Take the deal and then tender your resignation! No wonder why this hospital can’t ever get off the ground and stay afloat! I wish my mortgage company would vote to take half of what we agreed to. You all represent ALL the people of the hospital district not just the tribe. I must say you are not doing a very good job except for the other party involved. Don’t we need the 28 million to retire the old note(s) and start fresh?
This hospital deal stinks! Just another expensive mistake by the administrator and commissioners. I was at the meeting when this deal was approved. It was
amazing to watch 14 million bucks dissappear in less than a minute. Does everyone realize that this is a public hospital paid for, in part, by your taxes? Look at your tax bill. Perhaps it’s time to consider turning this public hospital into a private (for profit) hospital. So far, it’s an expensive embarrassment. Gene Pollard, the newest Commissioner, is the only one looking out for us. To bad. He can’t do it alone.
Fact of the matter, ever since 2006 the Hospital District Board of Commissioners have been brilliant in their vision for the future, their strategic planning and especially in their navigating through these very difficult economic times. As was pointed out during the meeting, the early payout agreement is essentially revenue neutral when you look at the value of money amortized over the life of the contract coupled with millions saved in lease payments. This agreement removes financial risks for the District, is fair for the Tribe and helps protect the health of Valley resident. That’s what I call a win, win, win. In other words, brilliant.
Scott Scowcroft
SVHF Board member
Sounds like a shell game to me. And certainly, the State Auditor has serious reservations about the financial viability. And this financial risk referred to: the inferance at the meeting was the potential for the Tribe to default on the loan.
The early buyout was essentially revenue neutral? I was at the same meeting and ALL of the Commissioners were struggling with this bitter pill. Didn’t sound like any of them understood what revenue neutral was all about. I aggree this is fair for the tribe. They are laughing all the way to the bank. This deal protects the health of the valley resident? This is BS. And who was the gentleman who all but stormed the Commissioners meeting last month? You know, the one who wanted his money? I think it was something about $100,000?
Brilliant? Can you say “Leisure Time”?