Walker County not preparing to pay Erlanger

Bebe Heiskell
Bebe Heiskell
photo Erlanger Medical Center is shown in this file photo.

LaFAYETTE, Ga. - Walker County Commissioner Bebe Heiskell does not plan to pay Erlanger Health System, despite a bill for $8.7 million.

During a budget hearing Wednesday morning, Heiskell said she is not setting aside any money in case the court rules the county must pay the hospital. Or rather, if a higher court makes that ruling.

U.S. District Court Judge Harold Murphy has already ordered the county to make the payments. But special counsel to Walker County Stuart James vowed to appeal that ruling, hoping to convince the Georgia Supreme Court that the county shouldn't be on the hook.

photo The Catoosa County Commission is asking Lookout Mountain Judicial Circuit District Attorney Herbert "Buzz" Franklin to look into whether there was any wrongdoing that led to Hutcheson's bankruptcy.

It's not clear when - or even if - James will be allowed to state his case.

"I didn't budget [any payments] this time," Heiskell said. "It will have to be next year for the budget part, because I don't know where we're going with [the case]."

Heiskell will hold another public budget hearing on Sept. 21 before the new fiscal year begins Oct. 1. If the county does have to pay the $8.7 million bill to Erlanger, that would represent about one-third of the county's current slated expenses.

In 2011, Erlanger loaned Hutcheson Medical Center $20 million as part of a management agreement, during which Erlanger's executives would also operate Hutcheson. At the same time, Heiskell promised Hutcheson's board she would cover half of Erlanger's loan - assuming Hutcheson didn't have the money to pay it.

After Hutcheson filed for bankruptcy, Erlanger sued Walker County in 2011, demanding its half of the loan. The total bill due had dropped from $10 million to $8.7 million because Erlanger got a portion of the sale proceeds when another company bought Hutcheson earlier this year.

Walker County argued in court that it didn't actually have to pay Erlanger because it didn't promise Erlanger anything. Walker County merely promised Hutcheson's board. Murphy didn't go for that argument, ruling Walker County still had to make the payments.

But Heiskell thinks Murphy was wrong. She said Erlanger's executives promised Hutcheson's board members they would renovate Hutcheson and bring in more doctors. Heiskell said that didn't happen, and Walker County shouldn't be on the hook.

"It's not fair what happened," she said. "It's not fair. [Erlanger didn't] hold up their end of the bargain, and they want us to pay them. I don't think that's justice."

Murphy also rejected this argument earlier this year, in a separate lawsuit between Hutcheson and Erlanger. Murphy said even though Hutcheson lost money when Erlanger managed the hospital, it actually lost less money than it had in the years before Erlanger took charge.

Landfill argument: Shannon Whitfield, who is running against Heiskell in this November's election, said the current commissioner's budget is too thin. In particular, he said, Heiskell did not provide a line for how much the county would lose on its landfill.

Whitfield said Wednesday the landfill lost more than $500,000 in 2015, referencing a county audit. Heiskell said Whitfield misread the audit: The county only lost $275,000.

"You're disputing the audits," Whitfield said.

"No," Heiskell said. "You are."

"No," Whitfield said. "I think the audits are correct."

"They are correct," Heiskell said. "You -"

Whitfield interjected: "You just indicated that the landfill -"

"Misinterpreting them!" Heiskell said, as the back and forth continued.

"That's difficult to misinterpret," Whitfield said.

"I don't want to argue about it," Heiskell said.

The county audit shows the landfill incurred $535,000 in operating loss in 2015.

Debate: Whitfield and commissioner candidate Perry Lamb both said this week they would like to participate in a debate or forum before the November election.

Asked Wednesday if she would be interested in participating as well, Heiskell said the public budget hearing was not an appropriate time for the question.

"I haven't decided," she said.

Contact staff writer Tyler Jett at 423-757-6476 or tjett@timesfreepress.com. Follow him on Twitter @LetsJett.

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