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Sept. 11, 1999 By Jim Mimiaga Last week the Montezuma County Hospital District board voted to overturn its own resolution that would have ended its contract with Continuum LLC., a management company leasing control of Vista Grande Nursing home, in March 2001. Upon returning from executive session, called to discuss legal questions about the matter with board attorney Kelly McCabe, MCHD Director Susan Keck made a motion to rescind the resolution passed by the board in August. It passed by a 4-1 vote with Keck, Lois Rutledge, Rick Beisel, and Chairman Randy Smith voting for it. Director Don Jolovich voted against, Florence Bane and Joe Reed abstained. The district board's now-nullified 4-3 decision to terminate the lease-extension agreement with the Greeley-based company was presented by board member Don Jolovich Aug. 10. It had passed amidst controversy over the legality of ending the Continuum agreement, and whether it might spark lawsuits against the district board for breach of contract. Jolovich maintains that the District had a good case, saying that the current contract is not valid because it lacks a specific term, continues for perpetuity, and unwisely sends badly needed profits out of the community and into the hands of a private corporation. Board Chairman Randy Smith, and Directors Florence Bane and Joe Reed agreed, but Smith reversed his vote on the matter at the regular board meeting Wednesday, while Reed and Bane declined to vote one way or the other. "Based on legal recommendations from McCabe, I decided to reverse that decision," said Smith yesterday. "McCabe stated in no uncertain terms that the district would be indefensible in a lawsuit for contract breach and that Continuum had an iron-clad agreement. "We do not have a choice in the matter because of a previous contract that was entered into several years ago, and so we are stuck holding the bag. I am not pleased with any of the options so we just have to make the best out of this situation and follow our legal council's advice. It would be a huge error to disregard that." At the Sept. 15 meeting, the board voted unanimously to discuss the matter with McCabe in executive session, which is not open to the public or press. Under Colorado Open Meeting laws the board can do so for topics concerning specified negotiations or to discuss "pending or imminent" litigation, in this case the previously reported speculations that Continuum might sue the MCHD board for allegedly ending the agreement prematurely. No vote can be taken during the closed session. In a Aug. 31 letter sent to the board by Steve Briscoe, Continuum manager for Vista Grande, Briscoe referred to the District's now-dead resolution to let the lease expire as "a statement of intent to violate the lease agreement ... (and) would be a direct violation of the amendment to the lease agreement which provides for either a lease extension or the building of a new nursing home." He further indicated in the letter that legal action would be taken if the issue was not resolved. The board is now negotiating with Continuum for one of those two options, although it is likely that a long-term lease will be decided on soon. Southwest Health System, the non-profit corporation who is leasing operations of Southwest Memorial from the District, has expressed a desire for a long-term lease rather than giving the go-ahead for Continuum to build a new facility (at Continuum's expense), one of two options stipulated under the agreement. The problem with allowing a new facility to be built is that SHS and the District would be left with an empty building when Vista Grande moved from its current building. (There is a no-compete clause in the lease.) And that building requires a minimum of $1 million dollars of asbestos abatement before it can be remodeled, which would be necessary before it could be utilized by Southwest Memorial for expansion. If inhaled, asbestos can cause respiratory disease, but it is not a threat if left intact. SHS absorbed standing agreements made with the District (including the Continuum lease) during the 1996 reorganization from public to private management of the taxpayer owned 61-bed, acute care hospital and adjacent nursing home. Jolovich, McCabe, Briscoe and Continuum attorneys will continue this week on the matter. "I am going to push in the negotiations to keep the lease as short as possible, no more than five years. But (Briscoe) wants a 40-year lease," Jolovich said yesterday. |
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