Friday, January 24, 2014

Memorial lease: There goes $20 million

Posted By on Fri, Jan 24, 2014 at 5:08 PM

click to enlarge UCH put its label on Memorial in 2012. - FILE PHOTO
  • File photo
  • UCH put its label on Memorial in 2012.
We're sure there's a rational explanation — at least we hope there is — for why the Memorial Health System bank balance was cut in half in one year's time.

According to a memo to City Council from the city's chief financial officer Kara Skinner, the enterprise's balance went from $28.1 million on Jan. 31, 2013, to $14.2 million by Dec. 31, 2013. And that took into account the annual lease payment from the University of Colorado Health of $5.6 million.

During the year, $19.8 million went out the door.

But UCH came out the winner, having received $12.4 million from the city under the lease's terms, twice as much as it paid the city last year.

Voters approved the lease, spearheaded by City Attorney Chris Melcher, who leaves the city next week, overwhelmingly in August 2012, and it became effective on Oct. 1 that year.

Among expenses during 2013:

• Legal fees (in house) $72,592
• Legal fees (outside) $2,226,037
• Severance and RBA payments $1,509,608
• Bond litigation settlement $995,000
• Payment to UCH for "post-closing adjustment" $5 million
• Payment to UCH for "net working capital reconciliation" $7,384,628

Skinner is due to explain the report to City Council on Monday. 

This annual report comes days after former CEO Mike Scialdone, who saw the city-owned hospital through a traumatic time from May 2012 through Jan. 17, unceremoniously "resigned" along with CFO Tracy Narvet to make way for UCH-connected people.
 
If interested, we wrote about the lease back in early August 2012.

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