Councilman Tim Leigh had prepared a statement for yesterday’s special City Council meeting in which he was going to call for the immediate removal of the Memorial board and canceling the $1.15 million separation package for CEO Dr. Larry McEvoy.
Leigh said he conveyed the gist of his message in closed executive session and “did not feel compelled to kick the horse as it laid in its dung.”
Nevertheless, he sent the statement out in his electronic newsletter.
What follows is an explanation and then the statement.
The following is the message I was prepared to deliver during the public session of the Specially-called City Council Meeting to discuss the management of Memorial Hospital. I conveyed the gist of this message in the closed session and therefore, did not feel compelled to kick the horse as it laid in its dung. That being said, I wish to congratulate the Council for doing the right thing.
– We removed the Memorial Hospital Board of Trustees with a unanimous vote.
– We stalled the McEvoy pay-out until it can be fully scrutinized by the city attorney’s office for its legality.
– We (the City Council and citizen’s of Colorado Springs) affirmed the high value we place on the Enterprise and its employees.
It’s now time to remove acrimony from the conversation and focus on the job at hand – caring for the sick and needy, and the smooth transition of the Enterprise by way of lease to the University of Colorado Health (UCH).
As you discuss this issue around the water cooler over the next few days and weeks, please convey that I fully endorse the transfer and please, when called upon to do so, endorse and support the transition with your vote and messaging to your friends.
With Warm Regards,
I stand firmly against the McEvoy Exit Bonus proposed by the Memorial Hospital Board.
Furthermore, I have no confidence in the Memorial Board’s ability to make any unbiased decisions which are not favorable to the discarded McEvoy plan and its’ proponents. You may recall the McEvoy plan was the proposed 100% leveraged buy-out of the hospital with no personal financial guarantees, which has been correctly usurped by the hoped-for lease with UCH.
I have 2 calls for action today:
1) I’m calling for a cancellation of the agreement to pay Dr. McEvoy’s Exit Bonus, but, with a willingness to honor the agreement we, (Council), were told was signed when he was hired; that being a 6 month’s salary-severance-package.
However, I’m not sure severance is an issue, because according to what we’ve been told, Dr. McEvoy did not quit, and was not fired. That being said, this appears to be a mere case of a hen feathering his nest.
The threat has been made that if we cancel the questionable salary-severance-package with Dr. McEvoy, we open ourselves to a lawsuit. I say, bring-it-on. I’d love to try this action in El Paso County, in front of a jury of peers.
2) I’m calling for the immediate removal of the Memorial Hospital Board of Trustees.
When the McEvoy plan was the topic of community conversation, we were told we, (the citizens), couldn’t strip too much cash from the enterprise because it would do irreparable harm. The money crunchers did their analysis and determined that if we, (the city), took $5,000,000 up front plus $1,000,000 a year thereafter we’d be OK; – but barely. [By way of comparison, (on those 2 metrics alone), the UCH proposed lease will provide something like $75 million up front plus something like $6 ½ million thereafter, for a generation!]
On the basis of these 2 metrics alone, we would have to question this board’s ability to understand the financial condition of the enterprise. Then, adding this salary fiasco to the brew, we’re certainly within our rights to question this board’s ability to manage the enterprise.
Dr. McEvoy told us last August that by December 2011, we’d be in receivership, with the bond holder’s management company in charge of the hospital. Subsequently, based on Dr. McEvoy’s financial forecast, we were told the Board had implemented substantial cost cutting measures; measures like less photo-copy paper (really?); the elimination of employee appreciation benefits like free ice-tea or plastic silverware, and the elimination of free-holiday dinners for those called away from their families to work Thanksgiving and Christmas.
And most importantly, the elimination of pay increases for any of the line or staff. I’m not aware of any planned pay increases for rank & file employees this year, but as we all know and in spite of these cost saving measures, the CEO’s pay was increased this year by over $100,000.
Yet, now in spite of these claimed draconian times, the Board found sufficient excess within their budget to give away over $1,000,000 to the CEO on his way out the door. I find this odorous and repugnant.
By the way, if not given away, it’s possible that, that, million dollars could be used for some other, better use, like the acquisition of the much anticipated Surgical Robot, a birth center pulse oxometer or more nurses.
We’ve been told that this deal is irreversible. I’m calling the BS card on that. I’ve been involved in business and contracts for over 30 years and a deal, while it may sound like a deal, is never a deal until the check is cashed.
This deal is most likely reversible and I’m calling on my co-councilors to stand up and do the right thing.
We’ve been told that the proposed Exit Bonus is “industry standard”. If that is the case, 1) who said we had to comply with an industry standard; how about complying with a community standard; and 2) when was the industry standard articulated? – Before the crash in 2008? It’s a different world since the crash, and industry standards may no longer be the relevant measure with which to award outrageous exit bonuses.
I was elected to represent the best interests of the citizens; not to promote the bureaucratic infrastructure. To that end, I feel compelled to stand on the principal of fairness and do the right thing. While awarding the outrageous exit bonus may be technically correct, it doesn’t make it the right thing.
In life, you can be technically correct but wrong. This is a glaring example.
Let’s demonstrate to our highly valued Memorial Hospital Employees and nearly 500,000 citizens of Colorado Springs we can make a right decision.
Let’s cancel the proposed McEvoy exit bonus agreement and remove the board showing the public they can trust their elected officials to do the right thing. Now, there’s change I can believe in.