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St Marys City officials and Hospital Authority to meet to avoid lawsuit

A potential lawsuit looms between the Hospital Authority and the City over the management of funding and operations of the Senior Center.

Members of the St. Marys Hospital Authority and City officials are expected to meet about the future operations and expenditures made by the Hospital Authority.

The St. Marys Hospital Authority oversees a $3.6 million trust due to the sale of a nursing home which used to be Gillman Hospital. The Authority was established under the Georgia Hospital Authorities Act over five decades ago, but the Authority did not complete its first annual audit until 2012. Since 2012, the Authority has completed one required yearly audit as required by the Georgia Hospital Authorities Act.

The Authority uses the $3.6 million to fund the city’s Senior Center program and owns the building that houses the Senior Center. The city leases the building from the Authority for this purpose.

The Authority has decided to conduct a yearly audit, at the request of the city, for fiscal years 2016 and 2017. The Authority met on Tuesday and received an update on their audit process. Currently, the process is expected to be completed sometime this fall, according to Authority member Colby Stilson.

The Authority was asked by the auditors to start tracking all expenses and to use a form that justifies each expenditure to prepare for future yearly audits. These best practices appear to have created confusion on how money is to be spent by the Authority related to the operations of the Senior Center program.

In attendance, was the City Manager, John Holman, who sent a letter on August 14 to the Authority stating that the only entity that can request funding for the operations of the Senior Center is the city.

Authority attorney, Jim Stein, stated that such a request by the city is not correct. The Authority has been spending money all along for the operations and maintenance of the Senior Center, which was upheld in a court decision in 2013 by Judge Steve Scarlett, according to Stein.

Chair of the Authority, Frank Drane, said that the Authority has historically gone beyond that interpretation in the consent order from Judge Scarlett.

“We have never worked within that strict parameter,” said Drane. Chairman Drane discussed with City Manager James Holman and noted that the Authority was not going to argue the point about spending funds.

“If we can’t get resolution, we only have one place to go, and that is the courts,” said Drane. “We will sue the city. We cannot just go up to the court and ask for a decision.”

Authority members objected and wanted a different approach that did not involve the courts.

“If the city does not agree and says no, then we have to go to court,” said Drane, who is an attorney by trade.

Authority attorney Jim Stein also reminded the Authority that the consent order does also say that the members of the program, 55 and over, benefit from the program. “It says you have to maintain the center for the benefit of the seniors.”

The consent order reads as follows:

Page 4 of the consent order

The August 2013 court consent order can be read by clicking here.

Stein maintains the entire consent order that grants the Hospital Authority to do-business-as (DBA) Senior Center Authority, allows for the Authority to use the funding for the benefit of the senior citizens of St. Marys, 55 and over.

Authority member Jay Lassiter affirmed that the operations and maintenance language restricts the function of spending by the Authority’s board members.

“If this is going to be a problem with Mr. Holman’s position (the city), we do not need to waste any time arguing. I propose we file suit,” said Drane.

Attorney Jim Stein stated that before the Authority can sue there has to be a dispute with the city before filing in court.

City Manager John Holman discussed with the Authority that any expenditures for the operations and maintenance of the Senior Center would have to come through the city’s chain of command. Any request for funding through the Authority would come through our Senior Center director first, according to Holman.

“This came about as I was reviewing the court order and the city’s financial policies,” said Holman. “I must account for every penny spent for city operations and must provide documentation to auditors. That is what our lease agreement says; I have to account for those funds.”

“So anything that touches the operations and maintenance of the Senior Center has to come through your office?” asked Drane.

“Any function has to go through the city,” said Holman. “Any activities related to the center, I would have to talk to my insurance people.”

Some Authority members were still concerned over the discussion of how funding should flow for Senior Center programs but did not get a firm answer from the city manager.

The Hospital Authority agreed for Authority Attorney Jim Stien, City Manager Holman, Authority Chairman Drane, and the city’s attorney to discuss what the interpretation of the court order means for future programs, operations, and maintenance of the Senior Center.

Once the meeting is complete, the Hospital Authority will have a special called meeting to discuss any further action, according to Chairman Drane.

Below is the letter from City Manager John Holman – 

Holman Letter to HA

Related item –

In August, the St. Marys City Council publically reprimanded Hospital Authority member Chuck Lanham for the use of profane language to a fellow Authority member in an email. The Council asked Lanham to resign from the Authority.

At that time, Authority Chairman Frank Drane said they would deal with the issue at the next meeting in September. AllOnGeorgia-Camden asked the Authority’s attorney, Jim Stein, why that item was not on the agenda. Stein said the city never sent the agenda to the Authority for their review to place it on the agenda.

Video of the meeting – 

St Marys Hospital Authority meeting , 6 pm start

Posted by All On Georgia – Camden on Tuesday, September 11, 2018

Related articles –

St Marys forces Hospital Authority audits, Attorney General’s Office asks for records

St. Marys Hospital Authority: No violation of open meetings law, Senior Center operations reviewed

St Marys forces Hospital Authority audits, Attorney General’s Office asks for records




Jeremy Spencer grew up in rural South Georgia and has served as a healthcare provider, high school science teacher, school administrator, and state education official. Jeremy is currently the market and content manager for All on Georgia-Camden and Glynn Counties. Jeremy’s focus is local news, statewide education issues, and statewide political commentary for the All on Georgia News Network. Jeremy has served as an education policy analyst for local legislators and state education leaders as well as a campaign strategist for local and statewide political campaigns. Jeremy holds degrees in science and education from the University of Georgia, Piedmont College, and Valdosta State University. Jeremy has lived in Camden County for over 17 years.

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