What Happened to Community?

By Jim Ferris

The following facts and events are the result of a large volume of research done by many people.  The information is as complete as possible with nothing materially or consciously held back to fit a particular narrative.  This is not the Roundup.  My analysis and opinions are just that; but follow me on this and see if you don’t agree that there may have been things done, and still currently being done, that are unethical at best.  Even if you don’t agree, I prefer we have clarity over agreement.

First, a little history of the Payson Hospital.  It was back in the early 50’s when a women’s group decided it would be a good idea for Payson to have a quality medical facility.  Thereafter, the entire community came together, and for over six decades contributed to this growing facility (generically, the Payson Hospital).  Individual citizens, civic organizations, individual bequeaths, volunteer hours, sweat, tears, and personal donations all contributed to creating a hospital that served Payson and its citizens well. The Payson hospital was a community asset that was used by the entire community.  From the late 50’s, the Mogollon Health Alliance, Inc. (MHA, Inc.) oversaw the Hospital.  One of the last major management decisions of the MHA, Inc. was in 1997 when they leased the hospital to Community Health Systems (CHS).  CHS paid approximately $17M upfront to lease the hospital for 18 years.  This wiped out approximately $15M in debt that the hospital had incurred.  Note, this was all done in 1997.  CHS’ 18-year lease was scheduled to expire in July of 2015 unless they renewed the lease, or the hospital was sold.  If a sale was to take place CHS held a first right of refusal as part of the lease terms.

As the lease to CHS was still six years out, the MHA, Inc. had already begun maneuvering so that it would be in a position to sell the hospital.  It appears discussions for the sale/transfer to Banner also began very early on.  Prior newspaper articles indicate that CHS had made significant investments into the hospital which made sense as they were first in line to purchase the hospital.  Dignity Health was associated with CHS; and to avoid selling the hospital to Dignity Health the MHA, Inc. merged with Banner Health so that it was not an official sale (that way they got around not taking Dignity Health’s offer and complying with the lease terms) but simply a merger of two entities.  The merger apparently came with an agreement that Banner would donate $40M to the newly created MHA Foundation (MHAF).

A Roundup article dated July 17, 2015 by Alexis Bechman reported the following: 

“Evans said many exciting things are coming to the area’s only hospital with $25 million in capital improvements over the next 7 years…”

“The MHA Foundation decided not to renew with CHS because they were too focused on profits and not healthcare, Evans said”

“Under Community Health Systems management, the Payson Regional Medical Center grew to a 44-bed facility with services that included diagnostic, imaging, medical, surgical and emergency care. Thomson Reuters also named the hospital one of the nation’s Top 100 Hospitals.

After failed negotiations with Community Health Systems, the MHA Foundation began looking for another operator and last autumn opened talks with Dignity Health, Banner and several others.

Although it received an offer $21 million over what Banner offered, the foundation went with Banner.

Evans said the foundation board liked Banner’s corporate philosophy, the work it is doing with the University of Arizona, the willingness to improve the Payson facility and let the MHA continue to have voice in hospital operations.  He said the MHA Foundation plans to meet with hospital officials monthly.

Banner also gave the Foundation $40 million.” ^[8]  

From this I can only assume that we left $21M on the table.

RCEA-SLE and MHA Foundation Board member, Jennifer Smith, claimed when the RCEA-SLE was created the citizens of Payson were polled and 93% wanted a four-year university in Payson – Wanted a four-year university as opposed to what?  What other options were offered?  Had the citizens of Payson been made aware of all their options, I think the outcome of the survey may have been much different; if in fact there was a legitimate survey.  If one option was to accept the $40M donation from Banner and spend millions on the purchase of the forest service land and related efforts in hopes of convincing a college to come to Payson; or accept Dignity Health’s offer with an extra $21M attached and using the additional $21M to build a very nice community center, aquatic center, cover the event center AND still have 40M+ in the foundation where the investment income would cover any operating shortfall of the new facilities in perpetuity.  Which would you have chosen?  Those were two very real options facing the MHA, Inc. Officers and Directors.  But unfortunately, the citizens of Payson have not presented these possible options.  Had they been clearly presented with these two options, I’m confident which one they would have chosen.  Think about it; right now, we could be enjoying the use of all these facilities I described at no cost to the citizens of Payson or the Town of Payson.  These facilities would have encouraged and enhanced economic development in Payson translating to additional sales and property tax revenues to the Town.  It appears that the community’s investment in the hospital was commandeered to pursue the desires and possible benefit of a select few.  By the MHA, Inc. and the MHA Foundation handling the sale of the hospital and steering the Foundation assets in this manner, they maintained complete control of the assets that rightfully belong to you – the people of Payson.

In June of this year as Kenny Evans was being interviewed by Deborah Rose on her Facebook show, Kenny said, and I’m paraphrasing, “there is a huge cry from a bunch of scallywags about this (MHA, Inc.) being so secret – it’s not secret, it’s just private and people have a right to privacy.”  What?  Did I just hear that right?  Apparently, Kenny Evans feels that a public charitable 501(c)3 corporation that is the custodian of assets which rightfully belong to all the citizens of Payson should be private.  The MHA Foundation is registered as a 501(c)3 and its board has a fiduciary responsibility and a moral obligation to all the rightful owners and contributors of those assets. 

Ask yourself, who was mayor while all of this was taking place?  Who orchestrated, negotiated, voted for, and signed the agreements to authorize the creation of the RCEA-SLE?  The RCEF?  The SLE Intergovernmental Agreement and Governance Agreement? [10] All of which was necessary for the SLE to be formed.  And who controls the purse strings that allows these entities to function?  Follow the money.  All the money they are spending is your money.   How much ‘say’ do you have in how your assets are being used?  How much say should you have?

Also, in a Payson Roundup article by Pete Aleshire dated April 21, 2015, Pete Aleshire writes, “Payson Mayor Kenny Evans said the town launched the rezoning effort (of the 253 acre Forest Service property) to reassure the Forest Service plans will move quickly once it approves the sale.  The rezoning also makes the property less valuable for other uses.”  Note: Kenny Evans is also the President of the MHA, Inc. which created a member organization, the Rim Country Educational Foundation, which pressured the RCEA-SLE to give the RCEF an undivided one-half interest in the 253-acre parcel it was purchased from the Forest Service ^[11] The article states, “The Alliance board approved the shared title arrangement in an effort to restore partnership between the two groups.” [12]

In the same Roundup article, it also quotes Kenny Evans as saying this to the Forest Service, “We’re saying to them, we’re going to zone this for educational use – here’s the evidence.  If you don’t have a purchase agreement, then rezoning will diminish the value of your property.”  Was an elected official using their position as mayor to coerce the Forest Service to come up with a purchase agreement on the property in which he has a personal interest, or did he use his position as mayor to diminish the value of the land and the ultimate sale price?  Also, the article states, “The Foundation was formed to raise money for the project.”   The Foundation was not formed to be a disinterested third-party lender to the RCEA-SLE.  The article also states, “When the Alliance (RCEA-SLE) found it could not raise the money for the land purchase without the Foundation (RCEF), several Alliance board members resigned, and the Payson Town Council decided not to reappoint then-chairwoman Mary Kastner.  The reconstituted Alliance board quickly agreed to share title with the MHA Foundation and consult the MHA-appointed Foundation board on its plan for the university.”      The Roundup article also states that the merger between the MHA, Inc. and Banner would provide the MHA with far more money than it needs to fund the land purchase and do the archaeological work. Why then did the RCEA-SLE take $100,000 out of the raw water-line project to Chaparral Pines and put it towards the archaeological study on the RCEA- SLE property?  The primary question should be: Why did the Town think the RCEA-SLE was an appropriate entity to contact with for a waterline?  The insistence that the RCEF take an undivided one-half interest in the 253-acre parcel shows a direct connection between the MHA/RCEF and the RCEA-SLE. This poses a huge conflict of interest.  Especially considering that as the Mayor he negotiated and signed the IGA between the town and the RCEA-SLE ^[13]  ; and he controls who is appointed on the RCEA-SLE board.

If the SLE can incur debt, it creates potential liabilities for the Town.  If the SLE can do whatever it wishes regarding the SLE property which is adjacent to town residences and town streets, then it can adversely affect those citizens and the town.  If the SLE can discriminate on what commercial entities can operate on SLE property without regard to the effect it may have on existing commercial enterprises in the town, then the SLE can have a negative effect on the Town.  If the SLE can purchase property that the town may have otherwise acquired for the benefit of the citizens of Payson, then the SLE could have an adverse effect on the town.  The citizens of Payson have the privilege of voting for town council members that represent their desires and the policies they agree with; and when council members fail the expectations of the citizens, they can vote those council members out of office at the next election.  When the SLE hand selects its directors that pledge to advance the agenda of the RCEA-SLE/RCEF/MHA board of directors, neither the citizens nor the towns that created the SLE have any say or representation on what actions the RCEA-SLE may take.  And the RCEA-SLE, through the MHA, may do whatever it wants with the financial resources that were and are rightfully owned by all citizens of Payson.  

September 21, 2019, the RCEF quitclaimed their undivided one-half interest in the 253-acre university parcel back to the RCEA-SLE. ^[14]Why?  Is this a maneuver to prevent the Town of Payson and the Town of Star Valley from dissolving the SLE?  All the dots we are able to connect is not a coincidence.  Folks, you can’t make this stuff up.