By Josh Mitchell
Corinth Today News Editor
Corinth Today on Wednesday requested the salary amounts of 16 Magnolia Regional Health Center administration-level employees.
The publicly owned hospital, through its attorney, declined to provide the salary information, citing a state statute, which says such information is exempt from disclosure.
“The salary information you requested is confidential in nature, and protected from disclosure,” the hospital’s attorney, Brad Dillard, said in an email to Corinth Today on Thursday. “MRHC does not produce that information.”
Corinth Today requested the salary information in the wake of recent financial concerns at the 200-bed hospital, which is jointly owned by the city of Corinth and Alcorn County.
The hospital’s bond rating was recently downgraded by global credit rating firm Moody’s.
MRHC officials have said they are working to “improve operations.”
MRHC has also filed a lawsuit against Regions Bank to prevent a possible default on millions of dollars in bonds issued seven years ago.
The Alcorn County Chancery Court has granted a preliminary injunction in favor of MRHC to prevent the hospital from having to hire a consultant. Hospital officials estimated the cost of a consultant at $300,000.
In his order granting the injunction, Chancellor Stephen Bailey stated that, “expenditure of these funds on a consultant would prevent such funds from being used to provide additional needed medical care to residents of the service area.”
The concerns cited by the chancery court over the cost of a consultant factored into Corinth Today’s decision to request hospital administration salary amounts.
Hospital officials are concerned that a new accounting standard in regard to reporting unfunded pension liability could negatively impact MRHC’s financial statements.
MRHC officials say that the hospital has met all of its pension contribution requirements and has never missed a bond payment. But they say the new accounting rule requires the hospital report on its statements a proportional share of the state retirement system’s unfunded liability.
This has resulted in the hospital’s financial statements appearing less healthy than they actually are, according to MRHC officials.
Moreover, hospital officials are concerned that reporting the unfunded liability could cause income/debt ratios to drop below certain levels required by the bond covenants. This could trigger an “event of default” on the bonds.
The hospital’s lawsuit against Regions Bank has asked the Alcorn County Chancery Court to rule that the unfunded pension liability should not be considered when determining income/debt ratios required by the bond covenants.
The preliminary injunction says that the hospital does not have to hire a consultant if it falls below certain income/debt ratios as a result of the new pension reporting rules.
The lawsuit is ongoing, and Regions has said that the hospital needs to name the actual bondholders in the lawsuit as well.