SRHS Board OKs Jackson County supervisors' plan for $13.6 million

The Singing River Health System Board of Trustees approved a settlement offered by the Jackson County Board of Supervisors, the attorney for the board said.

"The Singing River Health System Board of Trustees met on Dec. 22," said a statement from attorney Kelly Sessoms, "and voted to approve the Contribution Agreement put forth Monday, Dec. 21, which provides for Jackson County to contribute $13.6 million over 10 years to SRHS to help offset the significant indigent care costs incurred by the Health System each year.

"The Board of Trustees also voted to approve a settlement proposal which we are optimistic will resolve the pension plan issue. This settlement must be agreed upon by the respective parties and, ultimately, by the courts."

The agreement calls for a new SRHS Board of Trustees and the hiring of a turnaround team to "review the systems and operations of SRHS and to make recommendations that are needed to improve same and to direct SRHS toward financial stability" in the system that operates hospitals in Pascagoula and Ocean Springs and clinics throughout the county. It also pledges SRHS' full cooperation with that team.

In the agreement, SRHS promises to "continue to make information available to Jackson County to the extent that Jackson County deems appropriate."

In return, the county will pay SRHS $4 million next year and $1.2 million each of the next eight years.

The money from the county is aimed at preventing default on millions of dollars in county-guaranteed bonds at SRHS. The hospital system would then be able to resume pension contributions, which it hasn't done for years.

An attorney for about 200 people on the pension was skeptical when the supervisors passed the settlement Monday.

"The hospital doesn't have enough to pay its bond debt and it hasn't shown a profit in two years, and the county wants to contribute $13 million of which $6 million is going to out-of-county attorneys," Harvey Barton said. "We're going to trust the hospital, which hasn't shown a profit, to be able to contribute $148 million over the next -- what? -- 30 or 40 years? They're going to need a heck of a turnaround firm, is what I'd say."

Hospital CEO Kevin Holland said that was an unfair assessment of the state of the hospital's finances. As proof, he offered an email he'd sent to SRHS employees Monday.

"Our financial turnaround continues to take shape, and we are off to a good start in FY 2016," he wrote in the part of the lengthy email that concerned finances. "We ended October with a 4 percent margin, which totaled a little over $1.1 million. This bottom line was about $650,000 better than our budgeted forecasts. For November, we ended the month with a 2.5 percent margin, which totaled a little less than $700,000 for the month. This was substantial as November has historically not been a good financial month for us (last year we lost $3.2M in November). So, our YTD total through two months has us at a positive margin of 3.3 percent. Note that we have now had a positive bottom line in seven of the last eight months after losing $35M in FYE 2014."

No financial records were presented along with the statement.

Barton has said his clients have no plans to settle with SRHS.

This story was originally published December 22, 2015 at 7:00 PM with the headline "SRHS Board OKs Jackson County supervisors' plan for $13.6 million ."