The St. Marys Hospital Authority received their financial audit last month for fiscal years 2016 and 2017 showing they follow General Accounting Principles. The Authority shows $3.8 million in the trust which they managed since the sale of the nursing home many years ago. The fund is now used to support programs at the St. Marys Senior Center.
The Authority came under fire in recent months for not having completed yearly state financial audit requirements. The last audit that was performed was in 2012, which was the very first audit from the Authority since it’s 57-year existence. The Authority failed to conduct yearly audits in 2013, 2015, 2016, and 2017. The City of St. Marys asked the Authority to perform an audit to stay in compliance with the law, and the Authority completed fiscal years 2016 and 2017.
The audit also recommended possibly restructuring the organization into a nonprofit tax-exempt status so they could reduce their tax burden and accept donations to support the programs related to the St. Marys Senior Center. Authority Chair Frank Drane made the recommendation of converting the Authority to a nonprofit at their last meeting to Authority Board members.
Last Monday at the St. Marys City Council meeting, Drane presented the information from the audit about becoming a nonprofit foundation as a possible strategy to refocus and redefine the efforts of the Hospital Authority which does business has the Senior Center Authority. Drane said the Authority, since 2006, has placed in over $475,000 into the community – all from investments from the sale of the nursing home.
Drane said that possibly shifting the Authority over to a nonprofit status could benefit the relationship with the city and the Senior Center program. Upon successful transferring of all money and assets, Drane said the Authority would then dissolve. For the Authority to move the funds into a nonprofit foundation, the city must agree to the new arrangement.
Most of this year, the City and the Authority have been at odds about the approval of expenditures for the Senior Center program. City Manager John Holman has asked the authority to seek approval from the city on purchasing matters related to the Senior Center. The Senior Center is a program ran by the city and subsidized by the Hospital Authority. The Authority has taken reservation with the city manager’s request for purchasing approval as the Authority has never had to get permission before since subsidizing the Senior Center program. Holman maintains he must account for all city expenditures.
City Councilman Allen Rassi created a Senior Citizens Center Task Force earlier this year to review the expenditures, budget, operations, and effectiveness of the programs offered at the Senior Center. The Task Force reported to the Council requesting things be streamlined and become more inclusive and compressive where the meals and other programs are concerned related to overall good health for the seniors who participate in the program.
Since then, the Task Force was to meet with the Hospital Authority to discuss changes, but the meeting has not occurred. The Authority members have been asking for a meeting to discuss these issues of possibly revising the program’s future operations, but the Task Force has not met at this time.
In the interim, some Authority members have been less than cordial with one another as there has been a debate about the governance of the Hospital Authority Board and use of the Authority’s legal counsel, Jim Stein. Authority members Jay Lassiter and Chuck Lanham had an email exchange were Lanham sent an email calling Lassiter a profane name.
The City Council received information about this incident and censured Lanham for his profane email and passed a resolution demanding he step-down as an Authority member who represents the city. The Authority is expected to take up the matter concerning Jay Lassiter and Chuck Lanham in a public forum at the first part of 2019 to review the evidence of the email communication and the behavior of the members involved.
With the lack of financial audits in the past, which are now complete, the Task Force and Authority’s lack of communication, along with the barriers to operate related program expenditures for the Senior Center, the relationship between both governmental entities may be at a standoff. The Authority members Frank Drane and Chuck Lanham will be up for reappointment next year in the Spring.
If the city approves the transferring of funds into a foundation, the new foundation will be able to raise funds for programs. Currently, the Authority uses funds from the investment of proceeds due to the sale of the nursing home. Drane said the foundation would be a community run organization and not run by the current Authority members. A foundation would also be able to apply for grant funding and spend money without the city’s approval.
“This foundation is a way out for us and for the city also,” said Drane. “This is an opportunity for the city not to have to fund it and deal with it anymore. There is nothing significant that can stand in our way to make this happen.”
Members of the Authority are expected to meet with Mayor Morrissey and the City Manager to discuss the audits and the possible nonprofit status.
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