County attorney: U of L Hospital pact violated

Metro Council violated a contract with University of Louisville Hospital when it voted to transfer part of an indigent care fund to augment road paving, according to a legal opinion from the Jefferson County Attorney’s Office.

Council President David Yates, D-25th District, said the opinion vindicates his and other members’ view that a bipartisan majority hastily supported an amendment that bypassed the Budget Committee and transferred $2 million out of the Quality and Charity Care Trust.

“When we’re dealing with millions of dollars, I don’t think that’s responsible, and I would hope we would do better in the future,” Yates said in an interview Wednesday.

In a March 21 letter to Yates’ office, the county attorney’s office cites a 2014 trust agreement between the city, state government and U of L Hospital that forbids the council from retrieving any of metro government’s contribution before June 30. The opinion goes on to say that the council has no legal authority to “unilaterally modify that contract” unless permitted by the board of the so-called Quality and Charity Care Trust.

Councilman Kelly Downard, who proposed the budget amendment, said Thursday morning that his road paving plan does not conflict with the trust agreement because it doesn’t call for moving those indigent care funds until June 30.

“It’s a question that’s erroneous, and somebody should have read it,” Downard, R-16th said. “It doesn’t say take money from indigent care, it doesn’t say that at all.”

A review of the proposal shows the amendment requires any “remaining funds” as of June 30 appropriated to the trust be transferred for road paving.

The hospital’s indigent care fund is set up to provide medical services for low-income patients who visit its trauma center. The city put $5 million toward the fund this year, according to hospital officials, and Downard touted an email from KentuckyOne Health officials saying the indigent care fund is projected to have $2.08 million at the end of the fiscal year.

The county attorney opinion addresses that correspondence, saying it did not amend the trust agreement that forbids a transfer unless authorized by the indigent care’s board.

Downard said that was never his proposal’s intention and that if his plan is out of order, then the legal question is if the council has the authority to change the budget mid-year based on new revenue projections, including a $10 million surplus announced by Mayor Greg Fischer’s office in February.

“It’s confusing to me that someone has gone to this extent to get an opinion on something that doesn’t relate to the law that we passed,” Downard said.

Democrats had warned during the last council meeting that the decision to take money out of the indigent care fund was unwise given Gov. Matt Bevin’s commitment to dismantle kynect, the state’s health care exchange.

Downard’s plan puts $2.55 million toward the city’s ailing roads and was supported by the 9-member Republican caucus and Democrats Jessica Green, Mary Woolridge, Cindi Fowler, Dan Johnson and Brent Ackerson. A 2015 report by Public Works showed the city faces a $112 million road deficit, which council members from both parties have bemoaned.

The amendment also pulls $800,000 out of the Public Works budget for salt to treat roads during the winter months. In an email to council members late Wednesday evening, Yates said city CFO Daniel Frockt informed him that the salt budget was left with a $35,000 shortfall.

Yates said he plans to make a motion at Thursday evening’s full council meeting that will reconsider the budget amendment.

“I am glad that we still have the opportunity to correct the mistakes,” Yates told council members Wednesday evening. “As we move forward, I plead that we utilize all resources available and work together in a responsible and diligent manner that better ensures this distinguished body’s decisions are predicated on legitimate information and facts.”

Reporter Phillip M. Bailey can be 502-582-4475 or [email protected]