Greenwood Utilities is weighing a request whether to provide free electricity and water to financially troubled Greenwood Leflore Hospital while the hospital pursues a potential lease.
Officials with the publicly owned utility appear agreeable to helping out the publicly owned hospital, but it’s a question of how much.
“We want the hospital to succeed,” said Brian Finnegan, CEO of Greenwood Utilities. “We need it as a community. We’re going to do what we can do to help be supportive of keeping the hospital open.”
Greenwood Leflore Hospital, due to long-running financial troubles exacerbated by the COVID-19 pandemic, has concluded that it cannot continue to operate as an independent entity.
On Monday, the hospital board recommended to its owners — the city of Greenwood and Leflore County — that they solicit proposals for a larger medical institution to take over the operation of the Greenwood hospital. On Tuesday, the Greenwood City Council voted to accept the hospital’s recommendation. The Leflore County Board of Supervisors is scheduled to consider the issue this coming Monday.
Hospital officials have estimated that it would take until the end of the year before a lease could be finalized. It does not appear, however, that the hospital has enough left of its depleting reserves to operate that long.
At the end of June, it had an operational cash on hand of $3.6 million, not counting $8.1 million in remaining advance Medicare payments that the hospital is paying back in monthly installments. The $3.6 million in reserves, based on recent financial trends, would last for just two to three months.
Finnegan said he was told by Mayor Carolyn McAdams that the hospital would be out of money by October based on its current rate of expenditures.
That grim scenario has prompted the hospital to ask Greenwood Utilities for free services to help the hospital stay afloat until a hoped-for lease can be completed.
The Taxpayers Channel was the first to report on the hospital’s request, which was made in a hand-delivered letter written by Dawne Holmes, the hospital’s chief financial officer.
On Tuesday, the three-member commission that oversees Greenwood Utilities discussed the request.
For the past year, according to utility officials, the hospital has spent about $100,000 a month on electricity and water. However, they estimate that the cost now, due to the rising price of power and the currently high-demand season, would run closer to $120,000 to $130,000 a month.
Losing that revenue from its third largest customer would put an additional strain on the utility company, which was already dealing with the dramatic decrease in utility usage from one of its previously largest customers, the bankrupt Express Grain Terminals.
“We can’t last long doing that,” said Charlie Swayze, chairman of the utilities commission, about providing free services to the hospital, even though it’s allowed by law.
The commissioners as well as Finnegan raised concerns about whether city and county governments were prepared to also help the hospital weather its current storm.
“I don’t mind helping here, but let’s make sure it’s not just our customers having to pay the price for this,” said Finnegan, emphasizing that any free services for the hospital would be subsidized by the utility’s other roughly 9,000 customers.
The city-owned utility already provides free services to all of Greenwood’s government operations and subsidizes the utility costs of the public schools located in the city as well as of several charitable organizations. It also provides the city with $60,000 a month out of the surplus above the utility’s required reserves.
The utility’s commissioners directed Finnegan to meet with hospital officials, as well as talk with city and county leaders, to work out a proposal that would presumably spread around the cost of bolstering up the hospital until a lease agreement can be reached.
“I want to help the hospital,” said Swayze. “We’ve got to have the hospital stay in business. They’ve got to stay afloat until hopefully they can work this deal out.”
- Contact Tim Kalich at 662-581-7243 or tkalich@gwcommonwealth.com.
