Idaho Attorney General Raúl Labrador will be asked to review the legality of a relationship between St. Luke’s Health System and the McCall Memorial Hospital District.
A citizen group known as Give Us A Vote! (GUV) announced Sunday that it plans to file a complaint with Labrador’s office in early July to determine if the hospital district’s allocations of taxpayer funding to St. Luke’s are in conflict with state law and the district’s bylaws.
“Since 2016, 100% of the district’s revenue (less its operation expenses) has been given to St. Luke’s Health Systems,” the group said in a draft letter to Labrador. “We believe this to be an abuse of the district’s charter and a violation of the Idaho Constitution.”
The letter is signed by Faye Thompson, a McCall resident who represents District 8 in the Idaho House of Representatives, McCall physician Curt Meske, and Tomi Grote, who formerly co-published The Star-News for 40 years.
The group is currently collecting a list of petition signatures to attach to the letter to Labrador. The petition is open until June 22 for anyone who owns property in the hospital district, which includes most of northern Valley County.
The complaint follows requests by GUV for the hospital district board to hold an advisory vote on dissolution of the taxing district, which predates St. Luke’s taking control of the administration and operation of the hospital in 2010.
The complaint does not ask Labrador to dissolve the district, but rather to weigh in on the legality of its practices and relationship with St. Luke’s. A copy of the complaint can be downloaded from Grote’s blog, Letters to the Valley County Electorate.
Board favors slow approach to advisory vote
In February, the board responded to GUV’s request for an advisory vote by assembling a task force to consider dissolution. It also made plans for a public education campaign to demonstrate the value the district provides to taxpayers.
Last month, the task force, which is composed of hospital district board members Mike Vineyard, Travis Leonard, and Steve Clements, recommended that the board move forward with putting an advisory vote on the ballot as soon as Nov. 4.
The rest of the seven-member board, however, favored a slower approach and directed the task force to do more research on the implications of dissolution.
Vineyard explained that the advisory vote results would be non-binding, thus giving the district time to process the results and determine its next steps—no matter the outcome of the vote.
“I agree that that work needs to be done,” he said. “I don’t know that we need to do that prior to having a temperature check.”
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“I would just feel better if I knew there was an acceptable, reasonable course of action,” replied Andy Laidlaw, who chairs the hospital district board.
GUV ‘underwhelmed’ by board’s response
The slow approach favored by the hospital district prompted GUV to escalate its grievances over the district’s practices to the attorney general’s office.
“The reaction of the board to our request has been underwhelming, to say the least,” Meske said. “Our next best alternative to resolve this is to ask the attorney general to investigate.”
A draft complaint released by GUV lists several allegations centered on what the group says is improper use of millions in taxpayer funding, of which the district’s levy collects about $1.5 million each year from residents in the areas of McCall and Donnelly.
The allocations have helped build an ambulance shelter at St. Luke’s McCall, purchase a new ambulance, and open an urgent care clinic on the hospital campus, among other things.
In recent years, most of the funding has been dedicated to building housing for hospital employees. That includes about $3 million already allocated, with the district set to consider allocating another $1.4 million to the project in August.
The complaint argues that the allocations are a public subsidy to St. Luke’s, a private healthcare conglomerate, at the expense of taxpayers.
“This is precisely the type of transaction that the Idaho Constitution’s gift clause is intended to prohibit: private business expenses shifted onto taxpayers without adequate public return,” the complaint said.
Laidlaw told Valley Lookout on Tuesday that all of the district’s funding allocations comply with state law and Wasden’s 2016 revision of the district’s joinder agreement with St. Luke’s.
“The goal of MMHD is to improve the healthcare in our community,” he said. “Every expenditure is to improve or benefit property owned by the district or to support programs to enhance or expand local healthcare.”
‘Partnership’ a problem
The complaint also says the hospital district and St. Luke’s are operating in a “partnership” despite a 2016 directive from then-Attorney General Lawrence Wasden that the two entities must remain separate to be constitutional.
Since then, the hospital district’s funding allocations have all gone to projects related to St. Luke’s McCall, with no solicitations for competitive bids or alternate proposals, according to the complaint.
“Alternative providers could have provided the urgent care clinic and transfer ambulance, but the district never sought them out and St. Luke’s screened out any that came directly to them,” Meske said.
Emails obtained by GUV under the Idaho Public Records Act show that, in 2019, St. Luke’s officials declined to share an alternative proposal to its request for taxpayer funds for a new ambulance and a shelter to store it in.
“I believe that utilizing Donnelly and increasing their staffing for ground transfers would be the best possible use of the money, would be a more sustainable solution, and would have the biggest benefit county wide,” then-McCall Fire Chief Garrett de Jong wrote in an email to St. Luke’s McCall Chief Operating Officer Amber Green.
Green replied that she had already presented three options to the district board and indicated she would not present de Jong’s proposal.
“I have concerns about changing the option for the tax district board so late in the game,” Green wrote. “I fear the Tax District Funding Committee will feel that we are unsure of what the best solution would be and would choose not to fund an option.”
Representatives for St. Luke’s did not respond to Valley Lookout’s request for comment.
Taxing district background
The McCall Memorial Hospital opened in 1956 as a city-owned hospital that later became a county-owned facility.
In 1984, the hospital district was created by voters in the McCall-Donnelly area to take control of the hospital from the county.
St. Alphonsus Health System managed the hospital on a contract with the district until 1999, when St. Luke’s signed a contract to manage the hospital.
The hospital became known as St. Luke’s McCall in 2010 following a merger agreement with St. Luke’s Health System.
The initial merger agreement gave the district’s assets, including land, to St. Luke’s and re-routed the district’s annual tax levy to St. Luke’s.
In 2016, however, the state found that agreement unconstitutional and revised it so that the district retained ownership of its land and control over how the tax funding is allocated.
Correction: A previous version of this story incorrectly described the funding structure of the hospital district’s allocations to housing for St. Luke’s McCall employees. The district is funding the housing in partnership with the St. Luke’s McCall foundation and will retain a proportional ownership stake in the housing.
