PAG officials recommend Novant deal, but questions about hospital sale proceeds remain

Partnership Advisory Group Co-Chair Spence Broadhurst voicing support for the sale of NHRMC to Novant during Monday’s public hearing. (Port City Daily photo / Johanna F. Still)

WILMINGTON — During Monday night’s final public hearing, many critics treated the NHRMC sale as a done deal. Still, the process requires a formal (but non-binding) recommendation from the PAG and approval from the hospital’s Board of Trustees. Tuesday night saw the former, with the latter slated for Thursday.

Related: At last chance for public comment on NHRMC sale, support mixed with skepticism

On Tuesday night, the Partnership Advisory Group wrapped up a year of meetings with a unanimous recommendation in favor of selling New Hanover Regional Medical Center to Novant Health (the main stakeholders have recently dropped their avoidance of the words ‘sale’ and ‘sell,’ and are now using the words interchangeably with ‘agreement’ and ‘partnership.’)


The vote represents the final ‘deliverable,’ the last official step laid out by the charter which created the PAG as a hybrid committee under both the hospital’s Board of Trustees and the county Board of Commissioners.

Through the process, the PAG has been constrained to focus solely on finding the best deal for NHRMC and the county. Attempts to go outside of that focus, including looking at possible adjustments to NHRMC’s stragetic plan or considering what will become of sale proceeds, have been hemmed in by County Manager Chris Coudriet.

Suitably, on Tuesday night, PAG Co-Chair Barb Biehner focused on having done the best job possible of delivering the best deal possible to support NHRMC’s long-term plan for delivering healthcare to the community.

“The agreement represents a once-in-a-lifetime opportunity for NHRMC to get the resources and support it needs to grow and fulfill its mission to lead our community to outstanding health,” Biehner was quoted as saying in the joint release from the county and NHRMC.

The PAG process has been painstaking, methodical, and in the view of most stakeholders extremely transparent (a website created to represent the process included links to meeting minutes and hours of audio, presentations, documents, and more).

However, despite having a year to explore and then fine-tune the options, the deal with Novant was not quite done this week when the public had its final chance to voice opinions and the PAG voted to approve it. One key missing piece: details on how, exactly, the $1.25 billion community foundation tasked with managing the majority of the sale proceeds will be set up and operated.

According to PAG Co-Chair Spence Broadhurst, despite some “high-level” conversations — some in closed session — about the use of proceeds, in general the issue was outside the PAG’s scope.

“The PAG has had only high level, directional discussions regarding the proposed community foundation since the use of any proceeds was not included in our charter responsibilities. We made no recommendations nor took any action regarding the proposed foundation since the use of the proceeds is outside of our responsibility,” Broadhurst said on Monday.

At Tuesday’s meeting, Broadhurst seemed relieved that questions from the media and public had shifted away from the PAG’s mission off finding a good ‘partner’ for NHRMC — a mission Broadhurst said he was confident the PAG had accomplished. As reported by WECT, Broadhurst said he was pleased the focus would now be on New Hanover County.

Thus, while the PAG was tasked with finding the best deal for the community, details on how that will happen — that is, how the $1.25 billion in public funds will be managed — falls to the county.

The county, importantly, does not consider this a ‘loose end.’

“The PAG will vote and make a final recommendation at this meeting regarding the asset purchase agreement and whether it is reflective of the objectives they outlined and the goals of the PAG. The agreement meets industry standards in terms of the level of details at this juncture, and there are no loose ends but rather standard things that follow an agreement’s execution and must be in place for closing at a later date,” County spokesperson Jessica Loeper wrote in response to questions on Tuesday afternoon.

As of Tuesday morning, count staff were still crafting a new draft of the foundation documents. In part, staff aimed to respond to the findings of the Local Government Commission, an oversight body under the state Treasury Department. According to the LGC, the county’s current draft of the foundation’s creation documents would not sufficiently remove it from the county to prevent it from falling under government regulations on investing public money.

Related: LGC disputes county’s assertion that $1.25 billion foundation would be a private, non-government entity

While the LGC did not investigate or comment on whether the foundation would also fall under state Open Meetings law, the two issues would clearly overlap to some extent.

Related: Should the new community foundation — managing $1.25 billion of the public’s money — be subject to public records laws?

Last week, a majority of commissioners — with the vocal exception of Commissioner Rob Zapple — made it clear that they agreed with outside counsel Don Munford; Munford, who was contracted for up to $25,000 on his work drafting foundational documents, told commissioners making the foundation public would be disastrous. Munford, a former one-term state representative, expressed his disdain for sunshine laws, claiming they didn’t work in the legislature, and said they would only serve to inject politics into the foundation.

Commissioner Jonathan Barfield, Jr. offered the folksy sentiment that people are generally good as a rebuff to the concern about a lack of public oversight, and Chair Julia Olsen-Boseman, while not specifically addressing Zapple or other critics, noted that she resented “innuendos” about the process, now or in the future, would be corrupt.

The final version of the community foundation, along with nominations for the board — including six names expected from the NHRMC Board on Thursday, and five from the county — and other details, are expected to be in place as exhibits to the overall Asset Purchase Agreement. The document is set for a vote on Monday, October 5, two weeks earlier than the deadline set by the county earlier this year.


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