Posted: 5/8/02

Fairview lease of DMH will remain in place

Cliff Buchan
News Editor

There will be no early out of a lease with Fairview for the old District Memorial Hospital building and grounds in Forest Lake.

The governing board of the Memorial Hospital District Monday night voted 4-0 with two members abstaining to not pursue changing the lease agreement. The decision came after the hospital board in January initiated discussion with Fairview over interest in ending the lease at an earlier date than spelled out in the agreement.

Fairview, through a letter by Daniel Anderson, president of Fairview Lakes Regional Health Care, indicated an interest to acquire the former hospital building and grounds in Forest Lake. The contract calls for the sale at $1.

Fairview now utilizes the old hospital building as its North ambulance base and for behavioral services. The Minnesota State Patrol has its station office in the building, as well.

But after hearing protests from several citizens and wading through a question of conflict of interest, the hospital board this week elected to put the matter on hold.

Fairview has been involved in the local hospital scene for nearly a decade.

The lease and affiliation agreement with Fairview became effective on Jan. 1, 1995. Under the lease, at the end of 2005, Fairview has an option to acquire the Forest Lake property for the nominal fee of $1. Two five-year lease extensions remain as possibilities beyond 2005.

With the Memorial District hospital board having little function beyond overseeing the upkeep of the building and grounds, the board in January opened talks to see if Fairview was interested in ending the lease now.

Such a move would likely result in decertification of the hospital district.

Conflict a question

Mondayís decision also involved a review of possible conflict of interest questions regarding members Yvonne Henrich of Centerville and Donna Carlson of Lino Lakes. The two hospital board members are also members of the Fairview divisional board that operates in the region as specified in the affiliation agreement.

Hugo representative Mike Perrault raised the question of conflict of interest in a letter to Henrich, the current board chair.

Mondayís meeting opened with a review of the conflict question by John Miller, hospital board attorney. Miller said the issue was ìmurky,î but he was unable to deliver a clear cut recommendation on a conflict allegation.

Such a determination would likely need outside review or an opinion from the Minnesota Attorney Generalís office, Miller said.

In terminating the lease at an early date, Perrault said the board was dealing with the ìgreatest of all issues.î With two members of the hospital board also serving on the Fairview board, Perrault said an appearance of conflict existed.

ìI donít think itís appropriate,î Perrault said. ìThe appearance could easily be questioned.î

Member Sam Mattson of Forest Lake said the very impression of a conflict would create a negative feel. ìThe hint of something wrong makes it wrong,î Mattson said.

He applauded Fairviewís efforts in serving the community and defended Carlson and Henrich, but felt the board was best served in not moving forward in changing the agreement.

ìI feel in my heart there is no conflict,î Mattson said to Henrich and Carlson. ìI can see more problems than itís worth.î

Mattson said he could see value in waiting because of the fast-changing medical world and uncertainty of how the property in Forest Lake might be used in several years.

While the motion to halt discussion passed, an earlier motion to restrict involvement by Henrich and Carlson on matters involving the lease failed on a 3-1-2 vote. Members Mattson, Barbara Hvass of Columbus and at-large member Joan Voelk were opposed. Perrault voted for the motion while Henrich and Carlson abstained.

The two Fairview divisional board members agreed during discussion Monday to abstain after Perrault raised his conflict concerns.

Both Carlson and Henrich assured fellow board members the topic of the lease has never come before the Fairview board for discussion.

ìI have never felt conflicted in representing the people of my district,î Henrich said.

Citizen questions

Some of Mondayís comments from the public centered on Fairviewís operation in Forest Lake and what the future may hold.

Questions came from Wilmer Dufresne of Columbus, a former hospital board member; lifetime Wyoming Township resident Norm Tolzmann; and Joe Osterbauer, a business owner and hospital neighbor to the west.

The three citizens all spoke in favor of maintaining the lease.

Dufresne, who spent 18 years on the board, said the original agreement with Fairview should prevail and the current board should continue with its elected duty of protecting the interests of the hospital district.

Henrich said criticism of letting the property go for $1 was futile because the $1 sale price is set in the lease agreement. Any other use of the facility for medical purposes would have to go before Fairview for consideration, she said.

Anderson reminded the visitors the Fairview investment in the hospital region was in truth $40 million plus the $1. When the affiliation agreement was signed, Fairview retired all DMH debt, paid off all leases and equipment obligations and established a self-supporting ambulance system.

The new hospital in Wyoming was a $40 million investment. The expansion last year created a facility licensed for 61 beds, he said.

ìWe will have a long commitment to the area,î Anderson said.

He said the arrival of Fairview has resulted in tax free health care to the entire region.

As a longtime supporter of the Forest Lake facility, Tolzmann said Fairview should have the same commitment here that it does in the former Chisago Lakes Hospital facility.

Osterbauer said he understood what the lease called for in terms of the sale, but cautioned the board the general public may not. When the $1 sale becomes known, Osterbauer said ìpeople will stir the pieî in protest.

ìYou might as well be prepared, because itís coming,î Osterbauer said.

Voelk said the public must face reality the property will be sold for $1 as spelled out in the lease/affiliation agreement. Regarding the possible sale at the end of 2005, Voelk asked: ìWhat will the public be saying then?î

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