Saturday, June 2, 2007

Commission seeks funding alternatives for hosptial

The Valencia County Commission decided to amend Covenant's contract Wednesday and approved phase one of the hospital project, to seek out alternative funding mechanisms for the second phase.

Commissioners also agreed to request an attorney general's opinion regarding the county's indigent fund being used to pay for the planning of the hospital.

Commission chairman Pedro Rael said he was not concerned about the changes to the contract. "Those were mandated by DFA (New Mexico Department of Finance)," he said. "I am concerned about finalizing phase one, and going into phase two, which means construction."

Rael again expressed concern about the nearly $18 million dollar shortfall predicted once construction begins. He suggested the county not go to phase two until it has the financing mechanism finalized. Rael voted against the measure on the caveat that he did not want to approve phase one at that time. The other four commissioners voted in favor of the measure.

County attorney Cynthia Wimberly said Friday that in the original contract, Covenant asked for state review of the contract. "For us that would be DFA," she said. "DFA doesn't review professional services contracts as a policy, unless it's specified by state statute."

Wimberly said DFA did review the contract as a matter of courtesy and found some minor changes and areas of concern.

"We changed effective date," she said. "Covenant agreed to a new payment schedule through a unilateral letter and agreed to take on the payments to consultant Robin Hunn and architectural firm Cooper Medical Buildings, which we really appreciated.

"The amendment to the contract doesn't make substantive changes," Wimberly said. "It makes the agreement conform to how we are operating. It was mostly clean up on some issues raised by the DFA."

Commissioner Georgia Otero-Kirkham asked project consultant Robin Hunn to give a nutshell version of phase two of the hospital. Hunn said the second phase would involve the development of construction documents.

"We will also be coming back with ownership options, if the county decides it doesn't want to own the hospital," Hunn said.

Gentry said that the second phase was set up to do the financing mechanism first and then go into construction.

"If it won't work, we don't go forward with construction," he said.

Otero-Kirkham said it was important for the commission to know what it was getting into before it got into it.

"We still have the option to scale down the project," she said. "I would love to be the commission that brought health care to the county. I would hate to be the commission that bankrupted the county. We need to maintain some control."

Rael asked who would determine the contractors that would do the actual construction. County attorney Cynthia Wimberly told the commission that when it accepted Covenant, it also accepted Covenant's subcontractor Cooper Medical Buildings as the architects for the project.

"Because this project involves public funds, they are required to follow the procurement code for contractors," she said. "Cooper Medical will go out for competitive bid just like on the judicial complex."

Wimberly went on to say that could change depending on the funding mechanism for building the hospital.

"If it is privately funded and owned, they might not want the county overly involved," she said. "But that will depend a lot on what the final funding mechanism is."

The commission unanimously requested that a small professional services contract be offered to Dwayne Brown of the Modrall Law Firm in Albuquerque to assist with possible bond financing and other funding mechanisms for phase two of the hospital.

Commissioner Ron Gentry made the request that Brown be involved in looking at the possible ways to fund the second phase.

"I think this needs to be developed legally and professionally," he said. "I agree with Mr. Rael; there needs to be a way to do this without indebting the county further in the future. Brown is an expert in this field."

In an interview Friday, Wimberly said that after contacting local attorneys and getting quotes by phone, which is allowed by the procurement code for a small professional services contract, Brown was indeed the person to go with.

"There isn't much call for his expertise," she said. "If you need someone to do bond financing, you're pretty much looking at one of the big Albuquerque firms. Modrall is the second largest firm in Albuquerque."

In the matter of requesting an attorney general's opinion on DFA's opinion that the percentage of the county's indigent fund set aside for planning did not roll over from year to year, Rael voted against the matter with the remaining four commissioners voting in favor.

The other four commissioners voted in favor of seeking the AG's opinion on the matter, with Gentry saying that the county needed a final decision on the matter. Otero-Kirkham asked Wimberly if the AG could override the DFA decision.

Wimberly said that an AG's opinion is persuasive.

"And as a supreme court justice once said, it's extremely persuasive it's right," she said. The attorney went on to say that in her opinion, yes the funds did roll over and could be used to pay Covenant's contract.

"I can't predict how the AG will opine," she said. "They can't direct the DFA to reverse its opinion, but it would be persuasive. Rick Martinez with the DFA requested the AG's opinion on this."

Gentry said that the issue was affecting counties across the state. "Some of them are using that money to pave roads and build jails," he said. "All we wanted to do was build a hospital for the people we collect the tax for."

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