Last week, the City of Kilgore terminated its lease agreement with Allegiance Specialty Hospital and resumed management of Laird Memorial Hospital and its tenants.
This week, during their regularly-scheduled meeting Tuesday, Kilgore City Council members unanimously approved setting up a hospital management department at City Hall, including two fulltime employees, a parttimer and a parttime administrative post (a contract position).
That group of four includes staffers who previously worked for ASH, Kilgore City Manager Josh Selleck noted, including the facility’s previous interim chief, Simone Sparks, in the administrative job.
“We have been prepared for this,” Selleck told the council April 24. “Allegiance Specialty Hospital hadn’t seen a patient in a little over a year, and they were battling a licensure issue."
Learning Friday morning of Allegiance’s plans to terminate the lease agreement, Selleck went on-site to work with staffers to close down ASH’s portions of the building and set up monitoring.
“While the Friday timing may have been more rapid than we anticipated, we were able to take action,” utilizing a solid relationship with ASH to ensure a smooth transition for the building, and its subtenants, back to city hands with assistance from current employees there: “We basically selected members of their existing staff who, coincidentally, have been members of our staff previously. All of these are employees who are familiar with the hospital and its operations. We’re not anticipating any lapse in service.”
The change will have no impact on the Christus Good Shepherd Emergency Room and Kilgore College nursing program that sublease space on the grounds.
Becoming landlord again, the city faces staff, maintenance and operations costs at the facility. Council members approved a budget amendment Tuesday at a net expense of about $280,000 for the remainder of Fiscal Year 2018. It’s the total cost after deducting lease revenues from KC and Christus as well $460,360 of cash reserves from City Hall’s hospital maintenance fund.
Thanks to city leaders’ foresight, “Every dollar of rent that y’all have collected there for at least the past four or five years has gone into a reserve,” ensuring the current expenses don’t yet touch tax dollars. “We have ample resources to cover both the capital side and the net operating loss of the facility. The decision to put those revenues aside, that makes this a lot easier.”
The operating revenues do not offset operating expenses, Selleck noted, and the largest revenue generating portions of the facility will be vacant until the city finds other tenants.
“We can go on like this for quite some time, but we’re hopeful we don’t have to,” he added. “We are interfacing with a number of future tenants for the facility.
“We’re sad to lose Allegiance as a partner but very excited about the possibilities this facility, as a blank canvas, creates for us.”
Meanwhile, it’s business as usual for Christus and in Kilgore College’s training space.
“We don’t believe this will in any way impact the operation of the emergency room,” Selleck concluded, likewise praising KC’s nursing program: “We’re excited about the future.”