WILMINGTON, N.C. (WECT) - The commissioners voted 4-1 in favor of a partnership between New Hanover Regional Medical Center and Novant Health during a meeting Monday afternoon after a unanimous recommendation from the Partnership Advisory Group (PAG) to approve a letter of intent.
Chair Julia Olson-Boseman, Vice Chair Patricia Kusek and Commissioners Woody White and Jonathan Barfield Jr. voted to approve the letter of intent. Commissioner Rob Zapple voted against.
Regarding the PAG, New Hanover County Manager Chris Coudriet said the process was “thoughtful and deliberate,” and despite not all members being in agreement at first, it worked. Olson-Boseman thanked the PAG and said, “We as commissioners have put our trust in this group.”
Leading up to the vote, Olson-Boseman said she wanted any proceeds invested appropriately, and in ways that take it out of the hands of politicians, and she thought the draft structure did that. Barfield was in favor of moving forward so long as the PAG and Trustees fully engaged with citizens.
In the final deliberations, White, who voted for the partnership, said, “This decision is one of which in public life I will be most proud to have played a small role in it.”
Commissioner Rob Zapple, who voted against, said his main concerns were not with a potential deal with Novant in general, but with the specifics as they were laid out in the letter of intent.
Those concerns included details he believes are unclear about the $3.1 billion commitment to fund the strategic plan, as well as how the proceeds will be spent.
“Great idea. It has not been fully thought through,” Zapple said.
He said he received the draft letter on Friday, and didn’t think one weekend was long enough for him or the public to digest it.
The New Hanover County Board of Commissioners has released a draft outline of how to manage the $1.9 billion in proceeds from the possible sale of New Hanover Regional Medical Center.
Note: the following is a draft outline and is subject to change. It can be viewed in its entirety at the bottom of this article.
Most of the funds — $1.25 billion — will be invested in a non-profit community foundation that will be formed that “furthers the county’s strategic priorities of health and social, equity, community development, and community safety,” according to the outline.
The newly-formed foundation would be governed by an 11-member board of directors, with the Novant ownership appointing six members while the county appoints five. Elected officials will not be allowed to serve on the board.
Approximately $300 million will go to an “NHRMC Transition Stabilization Escrow”, of which $200 million would be used to bridge any gap for NHRMC employee benefits (including pensions), and $100 million would be used for wind-down costs and liability escrow.
Another $300 million will go into a reserve fund that the county can use for emergency response, debt relief, and tax and fee stabilization.
And lastly, $50 million will go to a fund that the county can use for mental and behavioral health initiatives.
“The county has worked with Commissioners, NHRMC leadership and Trustees to develop a framework for these funds that ensures stability for the county, the hospital’s employees, and our residents. This is a significant amount of money that must be invested wisely and strategically. As such, the letter of intent outlines that the assets must be managed in a way that is ‘sacred and protected for the community in perpetuity.’ The Board of Commissioners will discuss the draft investment allocations and the community foundation at its meeting today and, if Commissioners vote to move forward with a Letter of Intent with Novant Health, then this framework will become part of a definitive agreement that is negotiated and finalized in the coming months,” said County Manager Chris Coudriet.
Now the county commissioners have approved the Letter of Intent with Novant, the final agreement, including the draft outline of the net proceeds, will be negotiated over the next several months and shared publicly — likely in September or October.
A public hearing will be held prior to a final vote by the NHRMC Board of Trustees and the New Hanover County Board of Commissioners.
Coudriet said the goal is to have everything worked out by Oct. 19, which is the last meeting the board will have before the Oct. 31 deadline set out in the letter of intent.