Open letter to the Community February 21, 2019

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1 Open letter to the Community February 21, 2019 After the recent turn of events related to the MMH Board we felt compelled to set the record straight regarding certain statements and/or actions which needed clarification. 1. In the Supervisor s removal letter - The reason for your removal is the failure to improve the financial condition of Massena Memorial and the failure to install a management team capable of leading Massena Memorial without exposing the taxpayers of the Town of Massena to inordinate risk. MMH has been losing money for more years than most of us of have been on the Board. Over the course of the past decade, MMH lost money 8 of 10 years. In fact, according to Healthcare Association of New York State, 44% of NYS hospitals lose money every year. That said, the MMH Board has worked to reduce the overall financial losses by reducing expenses, including the reduction of 29 FTEs. In 2018, cost reductions of nearly $3 million dollars were realized. At the same time, growth of new and existing services were initiated in order to bring in additional revenue, all while ensuring essential services were still available to the community. The MMH Board and Finance committee receive monthly reports of the hospital s financial condition. In those reports is the actual days cash on hand. The Town Supervisor has stated that the hospital is going to run out of money in the near future. The fact is based upon the hospital s 12-month cash flow projections through 2019 there is ample cash. A memo on April 27, 2018 was sent to the MMH CEO directing the hospital to work more on an austerity budget. The memo stated all meals provided by the hospital for events and meetings to stop immediately, any out of town travel should be carefully reviewed by the Board of Managers and it is obvious that there is not enough money for extravagance. The BOM took that charge very seriously. Not one Board member attended the annual Healthcare Association of NYS Trustees Conference; the Board collected money from each Board member to have a flower fund of its own in case a family member of a board member passed away, and took out of its own pocket the money to take former CEO Wolleben out for a farewell dinner. As for the meals, yes, the Board of Managers did have prepared meals provided by the hospital s Food Service staff for meetings, many of those meetings were three to four hours beginning sometimes at 3 pm and running until 7 pm. Much of those additional hours were dedicated to affiliation discussions. The average cost of each meal $21 (9-13 people on average), since they were provided inhouse at a nominal cost.

2 In 2018, the county assessed through the Town of Massena an increase in worker s compensation expense of $700,000 (which is being paid in installments to the Town of Massena for payment to St. Lawrence County), additional compensation expense for interim CEO s including, Ann Gilpin of $100,000 for two months and Chuck Gijanto of $85,000 for four months. That will equate to $500,000 in additional compensation expense for interim CEO s over 12 months of what the MMH Board budgeted. This additional expenditure which was not necessary is the direct result of the Town Supervisor s interference into hospital operations. He hired an interim CEO without MMH Board involvement. He agreed to pay the interim CEO s compensation, but then had to retract that due to the fact by municipal law section 128 (8) it is the responsibility of the MMH s Board to pay this salary out of the funds under their jurisdiction. As a result of that interference the MMH Board requested in writing a commitment from the Town Supervisor that going forward he would allow the MMH Board to manage the operations of MMH as required by General Municipal Law of State of NY. On July 23, 2018 he did give the MMH Board a letter indicating that commitment. He continues to place undue influence over the Board preventing them from carrying out their appointed responsibilities. The MMH Board set aside $2.2 million, which is inclusive of the overall days cash on hand, however use is restricted without the approval of the hospital board s finance committee. Those funds were set aside in 2015 to ensure that the hospital had a small reserve since MMH did not have any lines of credit. The following year, NYS awarded MMH a grant of $5.5 million to pay off its debit of bonds held by the Town of Massena. The Town Supervisor recently was quoted in the Courier-Observer, February 15, 2019, MMH was unable to make the pension contributions for 2018 and Those sums, totaling over $5 million dollars, are currently accruing interest at the rate of 7 percent. The fact is, it is 7 ½ percent and MMH is paying the accrued interest cost of $450,000 for that unpaid balance. Those payments are made directly to the Town of Massena. The MMH Board began its conversion process in It was forecasted based upon a study commissioned by the hospital and conducted by FreedMaxick, CPAs, P.C. that by 2018 MMH, if it stayed the course with status quo as a municipal hospital, it would lose $5.1 million. The MMH Board has been requesting the conversion to not-for-profit status since that time. As the Town Supervisor has indicated numerous times, it is the Town Board that will be making that decision. The lapse in time has worsened the hospital s financial position. We are still waiting. During that time the hospital has paid in excess of $750,000 towards the cost of conversion, paying for all of its own costs to set up the new corporation, as well as the legal costs for the Town of Massena. 2. In an interview by North Country this Week Jan 26-Feb 1, 2019, the Town Supervisor was

3 quoted, Never before today (Jan. 21, 2019) at 3 o clock do I remember meeting with the Board of Managers. The fact is there were numerous occasions the Town Supervisor requested meetings either with the executive committee of the Board or the full board in The following are dates which meetings were held: February 7 with the executive committee and entire Town Board; March 14 with the executive committee and entire Town Board and June 7 with the MMH Board and the entire Town Board. The Town Supervisor specifically did not want the CEO or CFO in attendance at those meetings. These are the paid professionals who specifically can address questions related to the hospital s finances. The MMH Board invited the Town Supervisor to participate in our executive sessions with the entire hospital board in 2018 to ask any specific questions he may have for not only the board, but the CEO and CFO as well. The following dates are the meetings he attended in executive session with MMH Board: January 22, June 18, July 23, and November 19 th. He also participated in two affiliation presentations: August 20 th and September 24 th. An ad hoc committee of the MMH Board also met in two different sessions August 17, 2018 and September 25, 2018 with the Town Supervisor and his counsel to work on the Asset Transfer Agreement. 3. In an article in North Country this Week, 12/18/18 the Town Supervisor stated, Town Councilor Sam Carbone and I were there and we never heard anything about it. The Supervisor was referring to the affiliation discussion. The fact is that it was listed as item number 8 of the 12/17/18 executive session agenda. The Town Supervisor nor the liaison are part of the hospital s executive session unless invited. The Town Supervisor, public and press can all stay and wait for the executive session to be complete, as the MMH Board must go back into open session to take any actions. This procedure occurs every month. The MMH Board has been working on affiliation for more than three years. One of the MMH Board s goals in 2018 was to choose a partner by year-end. The Town Supervisor who on more than one occasion said the MMH Board hasn t done anything. So we did act and named a partner to begin official affiliation discussions. 4. Sue Bellor as Chairperson (1/1/19-1/3/19 (effective date of removal before legal hearing) and Carol Fenton, Chairperson (2/6/19-2/13/19) both had their authority usurped by the Town Supervisor with his specific actions of calling special meetings of the hospital board. As noted in the MMH By-laws Special Meetings Special meetings of members, for any purpose, may be called by the Chairperson of the Board, or by a majority of the Board of Managers Note: Members shall be given notice of the time and place of any meeting by mail or telephone. Neither were compliant

4 with the hospital by-laws. The Town Supervisor sent his own communications to MMH Board members. In some instances he didn t include all members. In fact, one of those meeting requests set up by the Town Supervisor was initiated by text and he left out a number of board members as he stated he didn t have their contact numbers. Again, this is not the proper protocol for calling a meeting of the MMH Board of Managers. He continues to make that error. Both Chairs asked for alternative dates for joint meetings after they both learned that the Town Supervisor called these special meetings. On 12/31/18 Sue Bellor offered that the two boards meet before the regularly scheduled board meeting on 1/21/19 in lieu of the 1/3/19 meeting called by the Town Supervisor. He rejected that counteroffer. The Town Supervisor called another meeting for 2/1/19. Then the Supervisor called another meeting for 2/13/19. Carol Fenton then communicated with the Town Supervisor the importance of an agenda and having the CEO and CFO participate. He rejected both. The fact is that these Chairs both were willing to have joint meetings, but needed to have ample time to call a special meeting per the by-laws in order to ensure there was a quorum and that it was called appropriately so all members were notified. 5. The Town Supervisor stated the MMH Board doesn t always follow its own By-laws. He is referring to the 12/21/18 Board meeting, whereby a citation was given to a former board member who resigned. The Town Supervisor stated that board members who resign must send him a copy, as well as the Town Clerk. He is referring to a board member that submitted his resignation letter to the Chair of the Board on 11/27/18 and it was accepted. A resolution was put forward by the Secretary of the Board at the meeting thanking the board member for his service. The Town Supervisor disagreed and said the board member is still on the board. According to the by-laws 2.2 Any Board member resigning should submit a written notice of resignation to the Chairperson or to the Secretary of the Board of Managers. Such resignation may or may not be contingent on formal acceptance. However it shall take effect on the date of receipt or at any later time specified therein. That person is still listed today in the town clerk s records, but not on the official roster of MMH. 6. A number of the Board of Managers were individually spoken to by the Town Supervisor about the direction he wanted them to go. If they didn t, they could resign or be removed. That fact was brought out in the public session of the 12/21/18 board meeting by two members. The press covered that topic. Since that time, three board members have been removed by the Town Supervisor, two have resigned and one not re-appointed. Yes, we are well aware of the statutory authority of the Town Supervisor to appoint and remove board members. That said, it is the entire Town Board who has the final say in

5 the remaining business of the town, including MMH. We are hopeful that the entire governing body of Massena Town Board will work with the current MMH Board to have the joint meeting that was asked for by the most recent Chair of the Board to include, the Town Board, MMH Board and Ad hoc committee of the medical staff. As a MMH Board member at minimal you volunteer 10 hours per month to attend committee meetings, and put anywhere from 6-10 extra hours preparing for and attendance at Board meetings, reading journals and attendance at professional training. If you Chair the Board, you can add an additional 5-10 hours per month. Collectively, signers of this letter have given more than 8,000 hours or 46 years of collective service to ensure that our hospital is available to our community. The Town Supervisor didn t want CEO Wolleben in joint meetings with the MMH Board and Town Board. He didn t want him to lead the hospital and ensured that he didn t. The Town Supervisor doesn t want the current CEO or CFO involved in any joint discussions with the MMH Board and Town Board. The Town Supervisor discussed his desired direction with specific board members and gave them ultimatums. The Town Supervisor didn t re-appoint and or removed three Chairs and a Vice-chair within 44 days. The facts speak for themselves. Sincerely, Susan Bellor Carol Fenton Scott Wilson John Horan Tina Buckley David MacLennan

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