Proposed manual doesn’t pass muster with Springs council

They may not be doctors, but members of the Colorado Springs City Council are recommending surgery on the first draft of a new governance manual for Memorial Health System.

Memorial unveiled the draft at an informal council meeting Monday, and council members responded with calls for further restrictions on the chief executive officer and board of trustees.

Mayor Lionel Rivera took issue with certain sections of the lengthy policy, designed to replace existing bylaws in place since 2002. He criticized the manual's "broad language" in sections that include competitive bidding processes and the CEO's control over employee compensation.

"I didn't find anything in here that says the CEO is restricted from giving bonuses or severance packages. The city and utilities have restrictions. I'd like a policy consistent with the rest of the city," Rivera said.

Memorial recently has come under fire for a number of actions including awarding large contracts without a competitive bidding process; paying an executive nearly $243,000 to leave a year before he was scheduled to retire so another employee could be promoted; and donating $250,000 from its marketing budget to the U.S. Senior Open.

Vice Mayor Larry Small questioned how the manual would translate into changes in the system.

"There's no restrictions on what the CEO or hospital can or cannot do," he said. "This is more extensive than the bylaws, but the bylaws aren't being followed. Why do I believe that this will get any better performance out of the hospital?"

Memorial's board appointed a task force earlier this year to develop a more comprehensive governance policy that addresses board and CEO duties and responsibilities and establishes ways of monitoring compliance.

Several council members expressed concern over a long-standing conflict: the relationship between the hospital's board and council. By city ordinance, the council appoints the hospital's board members and approves its annual budget, but the board has oversight of the CEO, who is in charge of day-to-day operations.

"The great frustration is that we have all of the responsibility and none of the control," said Councilwoman Margaret Radford. "If something goes wrong with Memorial, it's our hides and we don't have enough control to back-check you for us or the citizens."

The city bought the hospital in 1943. It now encompasses more than a dozen facilities including two hospital campuses, and operates as an enterprise fund of the city.

The question of ownership has been debated for decades. In 1994, voters approved continued city ownership, and a mayoral-appointed committee in 1999 recommended the city keep the system, pointing to a healthy bottom line.

But in light of recent problems, some council members say it's time to revisit the subject.

Council members said they would revisit the proposed manual, which needs their approval, at an annual joint meeting between with Memorial Health System on Aug. 1.

Dr. Larry McEvoy, who took over as Memorial's CEO May 31, said he supports dialogue regarding hospital governance.

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