Confirming a working relationship with their attorneys and refusing to declare invoices from their firm invalid were the only specific actions taken by the Park Hospital District Board of Directors during their meeting on Tuesday morning.
While initially called to discuss actions related to a memorandum of understanding regarding financial arrangements with UCHealth and to consider terminating the former Estes Park Medical Center pension plan managed by Ascensus, the public meeting quickly devolved into a discussion of legal fees and legal representation.
Following an hour-long executive session between board members and district attorneys, PHD Board Chair Cory Workman announced that no action could be taken on the MOU with UCHealth. At that point, director Tom Leigh began questioning fees for legal services, as he has done since April.
“Since the time of the inception of the idea of an MOU, we’ve run up quarter of a million dollars in legal fees, and that to me is just an astonishing number,” Leigh said.
The bulk of those fees is related to work related to the affiliation with UCHealth and will be paid by UCHealth, according to Steve Alper, board vice chair.
“I think we have a solution that’s going to work, that’s not going to negatively impact taxpayers,” Alper said.
“It’s not going to be taxpayer money,” Alper said. “We’re trying to come up with a solution that is best for the community in terms of finding a way to get these expenses paid, not with tax additional taxpayer dollars, and continue to have a good relationship with UCHealth, who is really our partner,” Alper said.
Leigh asked the board to consider terminating its legal services engagement with Hall Render.
“I personally feel we’ve already set a timeline for discharge of their services, and this is unnecessary, said board secretary Janet Zeschin, referring to the board’s decision to hire Hall Render for the first-year post-affiliation.
Put to a vote of the board, the board quickly dismissed the idea of terminating the contract.
Also rejected was Leigh’s proposal for the board to adopt a resolution declaring Hall Render invoices invalid because work performed by attorneys was unauthorized by the entire board of directors.
“These legal fees that have accumulated since Dec. 1 were never discussed fully with the board,” Leigh said. He contended that Workman was responsible for decisions that led to the district’s incurring the expenses.
That accusation, Workman said, “is categorically false.”
“You’re calling into question my integrity,” Workman said. “You’re calling into question my functioning as board chairman. And I find that to be not helpful in our discussions going forward.”
Board treasurer Brigitte Foust suggested the issue of legal fees be investigated by an outside entity.
“I would recommend a limited forensic audit by Eide Bailey to determine whether any portions of our legal work were ever approved by board motion, board, or contract, and that would protect the district and provide documentation for any future audit review, since there is a dispute,” Foust said.
“As much as I hate to spend extra money, it would maybe cost $12,000, but we would know exactly, and how the legal issues were handled,” she added. No action was taken on her suggestion.
With more than $250,000 in legal fees already incurred, costs associated with termination of the Estes Park Health pension plan overseen by the Ascensus financial management firm, development of a website, and other costs, the district is facing a severe financial shortfall from the maximum $200,000 allowed under the affiliation agreement with UCHealth. It’s a $200,000 budget approved in mid-December, and $50,000 was anticipated to be spent on legal services.
State law does not allow for deficit spending.
During Tuesday’s meeting, the board deferred consideration of the mission, vision, and core values statements, as well as a board governance dashboard, until further notice.
During public comment, community member Gail Cozette said, “Tom. It seems to me that you are working your own agenda that cross purposes with this board. Granted, nothing’s perfect. The agreement with UCHealth has been a done deal. That is what this board has to work with. This board started working after that was done. You keep going in the past. All of these legal expenses, a large portion of which have to do with the merger to begin with, and UCHealth has agreed to that, and they will pay that. So, how much more legal expenses are left after that chunk of money that is over budget, and how much of that is due to some of these actions that you’ve taken basically against the board? Also, I was totally appalled by the open letter that you wrote. It’s obvious you have lots of bones to pick with UCHealth, and if you cannot be supportive of UCHealth and this board, what are you doing on it? I think you should resign. Thank you.”
The framework for a revised budget is among the topics anticipated to be discussed when the board meets again in special session on July 23.