New Alabaster board will own Shelby Baptist
Published 12:40 pm Tuesday, October 27, 2015
By NEAL WAGNER / Managing Editor
ALABASTER – A new three-person board formed by the Alabaster City Council during its Oct. 26 meeting soon will own Shelby Baptist Medical Center, and will lease the facility back to the hospital’s parent company.
The council voted unanimously during the meeting to form the city’s first Medical Clinic Board and to appoint city Finance Director Kelly Ellison, Municipal Judge Joseph Walden and Shelby County Manager Alex Dudchock to the board.
Ellison’s term will expire on Dec. 1, 2017, Walden’s term will expire on Dec. 1, 2019, and Dudchock’s term will expire on Dec. 1, 2021.
The votes came after several weeks of discussions between Alabaster officials and leaders from Shelby Baptist and its new parent company, Tenet Healthcare.
Baptist Health System, which operates Shelby Baptist, and Tenet Healthcare finalized their merger into a joint company on Oct. 2.
The joint venture includes all Baptist Health System hospitals, including Shelby Baptist, Tenet’s Brookwood Medical Center and each organization’s related businesses. Under the joint venture arrangement, Tenet, which previously was the parent company of Brookwood, will be the majority partner and will manage the network’s operations.
Baptist Health System previously was a non-profit organization, but the new joint company will be a for-profit entity.
Because the new company is a for-profit entity, the city’s Medical Clinic Board will allow the hospital to avoid paying some taxes, including property taxes, sales and use taxes and lease taxes, said Alabaster City Attorney Jeff Brumlow.
The three-member Medical Clinic Board will purchase the hospital from Shelby Baptist, and will lease the facility back to the joint parent company, allowing the hospital the tax benefits. The action will come at no cost to the city.
Although the Medical Clinic Board will allow Tenet to avoid paying some taxes, the hospital has worked out a “payment in lieu of taxes” agreement with the city and county. Through the agreement, the hospital will continue to pay Alabaster and Shelby County the amount it normally would if it was taxed.
“We didn’t’ leave any of our funds, and the county is not leaving any of their funds on the table,” said Alabaster Mayor Marty Handlon. “All we are doing is saving them from paying the state.”