Orcas Health Care District: More Answers, More Questions

— by Susan McBain, Orcas Issues Reporter —

The commissioners of the Orcas Health Care District continued “making sausage” at a good clip at their regular weekly meeting on May 22. They made decisions on what short-term funding to pursue for the district’s startup expenses and on what firms to use as legal counsel. They worked through and suggested changes to the first half of the district’s draft bylaws. And they reported on the intense work each commissioner is doing between meetings, gathering information for critical decisions.

Commissioner Patty Miller began the finance committee’s report with rough estimates of funds needed until November, when the long-term bond (loan) to finance startup costs is expected to be in place. Miller and commission chair Richard Fralick met with representatives from UW Medicine (UWM) and the Orcas Medical Foundation (OMF) to explore their financial needs over that period, and they plan to meet with representatives of Orcas Family Health Center (OFHC), soon, to do the same. Miller estimated the needed funds conservatively at slightly over $300,000; however, she suggested seeking a $400,000 loan to be sure unexpected costs can be covered.

The finance committee has narrowed possible sources of immediate funding to two: a line of credit from Islanders Bank, or a loan from San Juan County. Because the County loan would not include a loan fee, prepayment penalty, or bond counsel requirement, the committee was more interested in that option. One hurdle—the three-month wait for another regular meeting of the county finance committee—was removed when the finance committee offered to hold a special meeting to consider the district’s request. A second hurdle is the County’s requirement for a resolution establishing a 2019 budget sufficient to cover the loan repayment, before it can approve the loan. Miller will look into whether this issue could be addressed by establishing an interim budget now, then replacing it with a final budget by the November 30 deadline. The commissioners voted to authorize the committee to move forward in the process of seeking County funding.

One immediate need for UWM is a new x-ray machine, as theirs is not repairable and they are sending patients off island for x rays. Aaimee Johnson, OFHC office manager, was in the audience and said that OFHC would be willing to share its machine. Commissioner Diane Boteler, who has long experience in medical practice management, offered to meet with UWM to talk about the possibility. Commissioner Art Lange noted that he had long thought having two x-ray machines on the island was “silly” and that he would like the two clinics to work together to secure one machine for both.

For the longer-term bond funding, the committee is considering working with either Islanders Bank or Washington Federal. A tax-exempt bond would require the use of a bond attorney to confirm that the bond meets the requirements for tax-exempt status, which would add to costs. So a taxable bond may cost about the same, and the committee will analyze costs for both types. Islanders Bank’s requirements would not include loan fees or prepayment penalties, but its interest rate is currently slightly higher than Washington Federal’s.

The committee noted that the commission’s most important need is to determine what services it wants and what its contracts with providers should require.

The legal committee reported next. Commissioner Pegi Groundwater compared costs and services for the two firms being considered for general counsel, Ogden Murphy Wallace and Foster Pepper. Brad Burg of Foster Pepper is an acknowledged expert, but the firm also represents UW, so he could not represent the district if litigation between the two occurred. The commission voted to establish contracts with Don Black of Ogden Murphy Wallace for general counsel and with K&L Gates for bond counsel.

Another legal issue is whether to accept ownership of the medical center facility from OMF. Committee members will seek information on what the commission should consider before making a decision, including an inspection of the condition of the facility and equipment. The committee is also continuing to gather information on insurance needs for the commission itself, and possibly for property insurance.

The new communications committee is establishing an advisory panel to help it determine good communications methods. The commission voted to add Boteler to the committee to work with Lange.

The staffing committee (Boteler and Groundwater) met with the Lopez district’s former interim superintendent and has plans to meet with the current superintendent and a Lopez district commissioner to help it decide on the need for an interim superintendent for Orcas. Groundwater thinks the Orcas district committees are doing much of the work an interim superintendent might do. An immediate staffing need is for someone to take minutes at commission meetings; Boteler will explore ways to advertise that paid position.

Finally, the technology committee (Boteler and Miller) reported that the district website and emails were now working and that they hope to begin posting documents such as agendas and minutes soon. Boteler suggested the commission look into acquiring a district computer running Microsoft Office, so that documents could be shared for review and that automatic backups for all commission documents could be scheduled.

Finally, the commissioners voted to seek funding from the County’s Public Facilities Financing Assistance Program, perhaps for partial funding of an x-ray machine.

As the meeting ended, Fralick reminded commissioners that their most important task remains determining what services they want. He asked each commissioner to begin formulating thoughts about what should be included in contracts with providers. The topic will be a priority agenda item for the next meeting, which will be on May 29 at 4 p.m. at the Fire Hall.