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Probe ongoing on rates for SMH |
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Friday, 27 March 2009 |
Saline County Prosecuting Attorney Ken Casady said he is continuing to interview people who possibly have knowledge of a special discount Saline Memorial Hospital has been receiving for sewer services for around nine years.
According to information uncovered thus far by city officials, the discount apparently wasn’t authorized by the proper city authorities, nor was it given to other large industrial customers of the city. But as he learns more about the issue, Casady said it does not appear that any criminal act was committed.
“It does appear that the hospital received a discount that the City Council may not have authorized by ordinance, which would have been the proper procedure,” the prosecutor said. However, he isn’t certain that this will merit an Arkansas State Police investigation, which has been considered.
Terry McKinney, general manager of Benton Utilities, told city officials in an agenda meeting Monday night that he had discovered the discounted sewer rate while studying what Saline Memorial’s charges would be if new rates are implemented. During that process, he said he found a notation regarding the hospital’s discount.
“We discovered that a notation was made in the utilities department in 2003 not to charge the hospital for two of its meters,” McKinney said.
The hospital has separate meters for its sprinkler system, cooling towers and central plant.
The discount does not mean the city was treating wastewater for free. Meters that were ignored for billing purposes measure water usage that was not actually wastewater.
Benton businessman John Young, who was serving on the SMH Board of Directors in 2003, does not recall the issue ever coming before the board.
“I remember an electrical thing being discussed once — something about bundling electricity,” he said. “We were going to have to buy special equipment to do it and it was going to cost a lot of money, but it would save money in the end. But I don’t remember anything regarding sewer services.”
After the sewer issue came to light this week, Young said he discussed this with another former board member and the two agreed that it would be “logical not to charge a sewer rate for meters that water the grass or for the cooling towers. You could use an ungodly amount of water that just evaporates without ever having anything to do with sewer.”
Casady said he has determined who made the notation in the hospital account regarding the discount, but has not learned who instructed that individual to do so. The employee who made the notation no longer is employed by the city.
Casady said he has not been able to locate any ordinance or document in which the council authorized the special rate for the hospital.
All of the discussion regarding the sewer rates came up because of an ordinance on the council’s agenda Monday night. That ordinance, which raises the rates, was approved on its first reading by a vote of 6-4.
Benton Mayor Rick Holland, who took office in 2003, said he was unaware of the situation regarding SMH until Monday and did not authorize it.
“There was no Public Utilities Commission in 2003,” City Attorney Brent Houston said. “That wasn’t established until 2005.
The issue about Saline Memorial’s sewer charges came under scrutiny after a representative of the hospital expressed concerns about the additional amount the hospital would be paying if the city imposed higher sewer charges, Houston noted.
“That’s when Terry, add-ressing the concerns of hospital and the amount of sewer rates they would be paying in comparison with other commercial entities, discovered this ... He saw something that was not correct about how they were being billed.”
The directive about SMH charges is a “typewritten notation” in the file, Houston said.
Randy Fortner, chief executive officer of Saline Me-morial Hospital, is out of town this week and not available to comment on the issue. Fortner was not administrator of the hospital in 2003.
Roger Feldt was administrator until April of that year, then Steve Jacobson served as interim administrator from June until September. Jack Mitchell became CEO in October, remaining in the post until 2005.
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Razorbacks
