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Greenwood Utilities tables Greenwood Leflore Hospital's request for $100,000 free utilities per month

Tuesday, July 19, 2022, 7:17 pm News Flash Archive

At this afternoon's meeting of the Greenwood Utilities Board of Commissioners, the board considered a request for free utilities it received from Greenwood Leflore Hospital yesterday, but tabled the matter due to various concerns expressed by the commission members, as well as to seek additional information from the hospital, and also city and county officials.

Today's Commission meeting may be viewed here: Greenwood Utilities Commission Meeting, July 19, 2022. The discussion of GLH's request begins at the one hour ten minute mark.

GLH has been spiraling towards insolvency for several years, and is desperately seeking to slash costs while in search of some larger hospital to take over the running of GLH. See our reporting from yesterday for more details: GLH losses for June total $1.65 million; total usable cash now down to $3.69 million

Brian Finnegan serves as CEO of Greenwood Utilities, Blake Magee as CFO, and the three commissioners are Charles Swayze, Jr., Wade Litton, and Roy Brown.

Mr. Finnegan led the discussion regarding the hand-delivered letter GU received yesterday from GLH management, requesting free utilities from Greenwood Utilities.

Finnegan explained that state law does permit the provision of free utility services to hospitals, but does not mandate it. The Commission must determine whether or not to provide the free utilities, and if so, in what amount.

Finnegan stated that Greenwood Utilities presently provides free services to the city, the schools, and various benevolent societies, with the later two categories being subject to a capped amount, after which they must pay for additional services.

Finnegan stated that this was the first time that GLH has requested free utilities from GU.

In the letter, GLH stated that its June utility bills totaled $143,000. But Finnegan explained that GU can only provide free electricity and water service. Although GU bills for sewer and garbage disposal, those utilities are actually provided by the city of Greenwood, and GU cannot forgive those costs to GLH.

Finnegan stated that in the past twelve months, GLH has utilized a total of $1.2 million of electricity and water, but of course, the monthly figures vary depending on the season. Sewer and garbage, on the other hand, are running around $14,000 per month.

Finnegan and the Commissioners all agreed that if GU consented to GLH's request for free utilities, that would have to come to a stop if or when an outside entity took over running the hospital.

Finnegan expressed concerns that providing $100,000 of free utilities per month would increase the rates paid by GU's customers, since GU has to purchase the electricity from the grid whether GLH pays for it or not.

Already, GU is paying the city of Greenwood $60,000 per month in "profit" which GU obtains over and above its costs and reserve for repairs and maintenance.

Finnegan reported that Greenwood Mayor Carolyn McAdams told him this morning that it appears that GLH will run out of cash sometime in October. It has rapidly shrinking cash on hand, now down to $3.69 million, less than 2 weeks' worth of monthly expenses. If the city and county are able to find another larger medical system to take over operations of GLH, that would probably only be in place by November or more likely December of this year.

Mr. Swayze stated that if GU lost $500,000 in revenue, "we can't last long."

IF GU were to provide free water and electricity for five months, it was estimated that would run around $700,000, given the rapidly increasing prices GU has to pay for electric power.

Both Finnegan, and Mr. Brown raised the question of how much the hospital's owners, Greenwood and Leflore County, are going to chip in to help carry the burden to keep GLH afloat. Mr. Brown particularly stated that the city and county should help, because "we [GU] can't tote the whole load."

Another concern expressed by all the Commission members, as well as by Finnegan, is whether free utilities will significantly extend the hospital's lifeline. It would be a shame to provide $500,000 of free services, only to see the hospital run out of money and close anyway. That would just be money down the drain.

Finnegan and the commissioners all expressed the desire to help GLH survive, since the community desperately needs its hospital, but were cautious about what, in the long run, would be an effective way to do so, without harming GU's financial stability.

The Commission voted to table the request, and instructed Finnegan and Magee to speak with the hospital administration, as well as the city and county officials, to obtain more information about how much free utility services they were requesting, and how the city and county could help share the costs.

Finnegan suggested that perhaps the city might want to take some of the $60,000 per month it receives in profit from GU and apply it to GLH's utility costs.

To review our reporting on GLH and its financial woes, please see here: Index of Greenwood Leflore Hospital news articles

John Pittman Hey
The Taxpayers Channel

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