Colorado Springs to study new ownership for hospital.

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Author: Preston, Darrell

DALLAS -- Colorado Springs officials hope to resolve an ongoing debate about the fate of city-owned Memorial Hospital in the coming months when they appoint a group to study whether the bond-financed facility should be run by the city or put into the hands of others.

Mayor Mary Lou Makepeace and hospital trustees chairman Harlan Loomas are expected soon to appoint members of a working group that will study whether ownership of the hospital should change and what oversight would be necessary under the new structure. The city council is expected to receive a report on the matter by March 1.

The results of the study could lead to a much looser affiliation between the hospital and the city, thus taking away city oversight for bond issues while also reducing the city's possible financial exposure.

The question arose this year over concerns about the city's potential liability in the event that the hospital, once the most profitable in the state, should lose money. Margins have declined from a high of $19 million in 1998 to $11.1 million in the current year. Fiscal pressures affecting all hospitals, including efforts to hold the line on Medicare spending, have put many hospitals across the country in fiscal binds this year.

Meanwhile, the city tried to take money out of the hospital to fund its fiscal 2000 budget because growth limitations under the Taxpayer Bill of Rights Amendment to the state Constitution have made it difficult for city revenues to keep pace with growth.

City Manager Jim Mullen proposed in his budget for next year that the hospital repay $21 million in city loans dating back to 1950. Mullen's proposal would have used the money to fund a new fire station and to hire some new employees for planning.

Hospital officials have grown frustrated during the past year not only because the city has sought to use hospital funds for city projects, but because city officials have been reluctant to spend money on proposed capital projects at the hospital.

The working committee is expected to look at several options, including the formation of an authority with its own potential taxing power and the creation of a nonprofit corporation with no taxing power. The hospital's board could be chosen by city council members or elected by residents of the city. Another option would be to sell the hospital to a for-profit company, but there is little interest in that alternative, according to city council aides.

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By Darrell Preston