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As a cautionary tale, all of Mississippi should pay close attention to what is transpiring with the Singing River Health System in Jackson County.

For those of you who aren't aware of the saga unfolding regarding this public hospital, its pension plan, mounting debt and declining revenue, allow me to enlighten you. Here's a synopsis of what's known as of today, using Warren Kulo's article on Gulflive Monday afternoon as a guide:

"The defined benefit plan -- which promised employees that they would receive a certain percentage of their annual salaries upon retirement -- required participants to put in 3 percent of their salaries each pay period.

"Due to financial stress, the system stopped contributing to the plan in 2009."


The hospital was to be making employer contributions on top of the employee investment. The fact that the employer portion was not being paid into the plan was not reported to hospital system employees until recent weeks, five years after employer contributions had ceased. Pension statements distributed to the employees during this period showed no signs of concern. The statements even showed employer contributions were being made into the plan.

Kulo's article continues:

"There are 2,389 people in that plan, 623 of which are retired and currently drawing money.

"SRHS leaders announced last week that the plan was "frozen" and that they planned to liquidate it within four months. Today, Singing River Health System Foundation attorney Roy Williams said the plan had been "terminated" during a hearing in chancery court."


Singing River Health System is Jackson County's second largest employer.

The hospital Board of Trustees, which are appointed by the Jackson County Board of Supervisors, and the hospital administration announced town hall meetings to discuss freezing the plan and liquidating it, essentially giving back the funds invested by the employees without the employer portion. This was announced and begun just last week.

But on Monday, after a complaint was filed in chancery court seeking an injunction to the hospital's plan of action, the hospital attorney revealed the Board of Trustees had not just agreed to freeze the pension plan, they went further; they had already voted to terminate the plan which again wasn't communicated with the public even in the midst of this firestorm.

Now we know, per this SunHerald video with Supervisor Troy Ross, that the county Supervisors didn't even know the pension plan had been terminated. {UPDATE: An email obtained by the SunHerald now states that the Supervisors were made aware of the termination.}

When asked how this matter wasn't caught sooner, Jackson County Supervisor John McKay recently said in an interview, "Ignorance isn't an excuse but in this case it is a reason."

The hospital was required to provide an annual financial statement to the county Board of Supervisors. It was received and rubber-stamped with little to no discussion, all while the hospital system and the county continued to increase bond indebtedness (upwards of $106 million), the hospital board and administration increased their footprint by adding and renovating facilities to much fanfare, and the hospital system's revenues sank to under 30 days of operating income to cover expenses, far from what's required.

Yet, when the Supervisors ask questions of the hospital system in public (most discussion has been in executive session under the reason of potential litigation) the Trustees - their appointees - and the administration give veiled, cryptic answers. Even when asked about administration salaries no direct answer is given.

District Attorney Tony Lawrence appeared before the Supervisors in executive session on Monday, the reason for which is still unclear. However, Lawrence recently offered any assistance in investigating the situation as the State Auditor's office begins their review.

SunHerald reporters Karen Nelson, Margaret Baker and Paul Hampton have been diligently seeking answers, trying to connect the dots. Hampton's latest article reveals that neither the hospital Board of Trustees nor the county Supervisors knew of the dire financial straits, or at least that's what they are saying publicly. Either way it borders on gross negligence and incompetence.

The lack of oversight by the county Board of Supervisors is obvious, yet they still have not sought resignations from their hospital Board of Trustees appointments. As a matter of fact, they are singing their appointees' praises.

It's past time for a change of the Board of Trustees, no matter how you slice it. A new board with new financial and legal counsel is needed immediately.

Further, investigations into service contracts and outsourced work needs to be reviewed to ensure all is ethically sound and fiscally responsible. Rumors and questions of hands in the till are rampant and growing. The perception of deception is only getting larger with every passing day.

The public doesn't trust this Board, whether rightly or wrongly. The perception is that they are biding their time, trying to run out the clock until negative public opinion wanes, simply trying to weather the storm. But this isn't going away. They are still making questionable decisions behind closed doors and the Supervisors haven't acted to curtail them in any meaningful way.

Qualifying for county elections are coming. Supervisors best show some resolve and begin publicly asking questions and demanding accountability and cease the closed door discussions or they could face a long campaign year ahead. The Supervisors are seeming blind and deaf to public outrage at this point.

In addition, the state Legislature needs to shed light by ending the public hospital exemption from the Open Meetings law. Requiring public hospitals to maintain more detailed public meeting records is another necessary step. If tax dollars are on the line as they are with public hospitals then the public should be fully aware of what's happening and why at these institutions. State Sen. Brice Wiggins has already expressed his support for such changes.

The Legislature should also require that public hospitals submit annual financial statements to the publicly elected board and that those financials be approved on record, not simply received and acknowledged. Assuming the Supervisors are providing adequate oversight, reading and asking questions, isn't enough to protect the public's interest.

There will likely be more shoes to drop in this saga as the case in chancery court is heard and election pressures mount as we approach 2015. It's worth paying attention to if you're an elected official, health care worker, or just a taxpayer in Mississippi.

Posted December 9, 2014 - 10:02 am

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