Oskaloosa’s City Officials on MHP’s Urban Renewal Vote

City Hall - Oskaloosa, Iowa

I would like to thank Mayor Krutzfeldt and Oskaloosa City Manager Michael Schrock for taking the time to respond to some questions I had on the recent Mahaska County Supervisor vote on Mahaska Health Partnership’s Urban Renewal vote.

I asked Mayor Krutzfeldt on the subject. He responded, “For what it’s worth, I believe the county supervisors had a similar decision to make back when the last expansion was done. I had dinner with Albert Stewart a couple weeks ago and he mentioned that they had the same decision when he was a Supervisor. They opted to commit county support to the hospital.”

Krutzfeldt continued, “At that time there wasn’t the consideration of putting it out to a vote. The Supervisors believed that they had been entrusted by the voters to make the decision. So they did.”

I posed 3 questions to Mayor Dave Krutzfeldt and City Manager Michael Schrock on the subject recently, and they were most willing to explain the City’s position on the matter.

What are your opinions on their vote, and do you believe this will come before the Supervisors again?

Mayor Krutzfeldt responded, “I was disappointed in their vote. The hospital has given compelling arguments for the expansion, so in my mind the question was how much to pay for it. When someone as talented as Jay Christensen comes up with a way to cut the cost by $14 million, through utilization of the county’s excess debt capacity, the answer seems obvious. As for whether it will come up again, I believe it will. From what I understand it will require going through another process of official proceedings.”

City Manager Michael Schrock also responded, “We are disappointed in the outcome of the recent County Supervisor vote on the Mahaska Health Partnership (MHP) expansion project and Urban Renewal Designation request. We thought a compelling presentation was made by MHP demonstrating that, with the County’s help, MHP could have saved approximately $14 million of unnecessary interest costs. It appears the majority of the Board of Supervisors have chosen not to help save millions of dollars on this project, and would rather see local funding be unnecessarily spent with lenders from out of state through higher interest rates on the Revenue Bonds MHP will have to seek as an alternative to G.O. Bonds issued by the County and paid for by MHP revenues.”

“We were very surprised by the two “no” votes since the decision was made on the heels of the public hearing held by the County in which the Board of Supervisors heard from a room full of individuals in support or who encouraged the Board of Supervisors to work with MHP to complete the expansion project and Urban Renewal Designation request.”

“We hope MHP will be able to revisit this item with the Board of Supervisors because access to quality healthcare is important to our
community and the region’s future growth and prosperity. MHP needs to stay competitive especially when other area hospitals are moving forward with their own expansion and modernization projects that draw away our local and regional patients, and their dollars, elsewhere.”

Will the City of Oskaloosa be able to help the hospital with its funding?

“I don’t see how. Obviously we support the application for funding to various other entities but we don’t have the debt capacity to
fund the expansion.” said Krutzfeldt.

Schrocks answer was, “The City of Oskaloosa as a government entity will not be able to help MHP fund the project, but a majority of MHP’s users and clients are Oskaloosa AND MAHASKA COUNTY taxpayers and residents. We all will help with the funding by living in this county and paying our taxes, service charges at the hospital or insurance premiums when we use MHP’s services.

What actions can the City do to help MHP at this point?

“Mostly what we’ve already done. We are still talking with taxpayers and to anyone who will listen to us that this funding method is a good idea.” answered Krutzfeldt.

Schrock stated, “The city adopted a resolution of support, but that did not appear to have much influence with the Supervisors that voted “no” to helping MHP. I believe it is in the city’s best interest to inform residents about the merits of this project and implore them to contact the Board of Supervisors to help them feel empowered to make decisions on the electorate’s behalf. Not every tough or potentially controversial item can or should be kicked to the electorate for decisions in a special election, but that is each governing bodies prerogative. Special elections cost taxpayers a lot of money each time and slows decision making down. If there is public sentiment that “government moves slowly,” calling for regular decision making by special election would exponentially increase the likelihood that it would come to a grinding halt. The City Council has encouraged the Board of Supervisors to be leaders who are elected by the people to make a decision on this project for the people in the affirmative and help MHP, our community, and this region.”

“The Hospital Board of Trustees have made an aggressive business decision they believe will increase the long term viability of MHP and improve patient care in many ways. MHP, a County and taxpayer owned hospital, has asked the Board of Supervisors for help, not in the form of cash but in the form of backing debt that would be issued in a way that MHP receives a much better interest rate on Bonds they need to issue. MHP has pledged to pay for the debt and has provided financial analysis stating they can make those debt payments. If County and MHP can work together, the end result will be approximately $14 million dollars in savings from not having to pay higher and unnecessary interest costs to outside lenders. That means everyone who is a user, client or taxpayer will save money.”