Eighteen months ago, Arkansas City commissioners voted to disband the South Central Kansas Medical Center Board of Trustees and take responsibility for the financially-struggling hospital themselves.
The commission essentially fired the trustees they had appointed to govern the medical center and took on dual roles of city commissioner and hospital trustee.
Since then, the medical center’s debt burden has been lowered, and the facility is operating at a profit under a new CEO. But questions linger about conflicting interest and even the legality of elected officials holding both positions.
There are times when the city’s interest and the hospital’s interest may not always mesh.
One example is the ongoing issue of whether the hospital should pay the city for infrastructure assessments in the Patterson Park subdivision.
Another issue is how to handle a portion of a sales tax meant for the hospital that was actually put into the city’s general fund.
The city eventually decided not to require assessment payments and has recently earmarked the compensate use tax funds toward medical center needs.
In fact, two Kansas Attorney General opinions have concluded that local elected officials should not also serve as public hospital trustees, and some Ark City commissioners themselves are talking about stepping back and returning to an appointed hospital board.
The Trego County Board of Commissioners wanted to place a county commissioner on the board of a county-owned hospital.
The county asked for an opinion, and Attorney General Derek Schmidt in 2012 determined that holding both offices was incompatible because of an inherent conflict.
In doing so, he cited two earlier AG opinions on the same issue. One from 1993 involving the City of Wellington dealt directly with whether a city council member could also serve as a city hospital trustee.
Then-AG Robert Stephan said they should not.
“The hospital board is required to file reports with the governing body of the city. Also, the governing body of the city has the authority to modify the size of the hospital board and to fill vacancies occurring on the board,” Stephan wrote. “It is our opinion that the offices of councilperson for a city of the second class and trustee for the city hospital are incompatible.”
The 2012 opinion by Schmidt also cites a Kansas Supreme Court case that determined a public school teacher could not also serve as a school district board member because of inherent conflicts of interest.
Trego County Clerk Lori Augustine said this week that after receiving the AG opinion in 2012, the commission dropped the matter. She said the hospital created an advisory board that included a commissioner.
“I don’t even know if that advisory board still exists,” Augustine said.
In Ark City, the facts are a little different. The entire commission, not just one member, became the medical center board. And an AG spokesman said that previous opinions can’t necessarily be applied to current situations. Subsequent legislation and court opinions would have to be reviewed.
“It is impossible to maintain a constant review of the validity of past opinions,” CJ Grover said.
Ark City Manager Nick Hernandez said he was not aware of the AG opinions when the decision was made for the commission to take over governing the hospital.
Former City Attorney Tamara Niles declined to comment on the issue, citing attorney-client privacy. County Attorney Larry Schwartz said it would not be appropriate for him to comment since he still serves as interim city attorney.
Calls made to SCKMC legal counsel Soule and Giles were not returned.
Hospital CEO Jeff Bowman, who was hired after the change, said he has met with the trustee board and the hospital attorneys to discuss the possibility of potential conflicts.
Bowman suggested that the hospital could adopt a hybrid board that would consist of two commissioners and three members not on the commission.
“That way, if a potential conflict were to arise, the commissioners simply would not vote on that issue,” he said.
Commissioner Duane Oestmann said commissioners never intended to serve in both roles permanently, just until major issues at the medical center were resolved.
“I will not be reluctant to turn over the reins of the job whenever that time comes,” he said.
In fact, one of the five hospital trustees is no longer a commissioner. Dan Jurkovich resigned from the commission this fall, but continues to serve as the medical center board chair.
Oestmann said the trustees should eventually be replaced with non-commissioners, but that one commissioner should continue to remain on the board in some capacity.
Commissioner Kanyon Gingher said when the commission took over, there were many underlying issues of which the public was not aware.
The commissioners had background knowledge from both the city and hospital sides, she added.
“So our attempt at doing what we’re doing is as individuals and it crosses over a bit, but you have to judge what is right and that’s what you do,” she said.
Gingher said Bowman, when he became CEO, asked the board to give him some time to get things together before pulling back as trustees.
Since the commission took over, Gingher said, the hospital now is on a much more solid footing.
“Things have happened in a positive way from attitudes of staff all the way through to the building itself, and the repairs that are being made,” she said.