Business and community leaders spoke in favor of the proposed Memorial Health System lease to University of Colorado Health – but there were a few questions and negative comments during Tuesday night’s public hearing about the lease.

Chris Jenkins, president of Nor’Wood Development, told the Colorado Springs City Council that he thought the lease was a good one.

“This is a fantastic solution,” he told City Council. “This will elevate health care in the community. I encourage you to listen to the critics, but remember the path you’re on.”

Mayor Steve Bach spoke briefly, calling the plan a “homerun, a grand slam, a blockbuster,” and telling City Council he wanted to work closely with them to set up the governance and legal outlines of the foundation planned with the proceeds of the lease agreement.

And Toby Gannett, executive director and principle at the assisted-living facility Palisades at Broadmoor Park, said his organization was making headlines and winning awards with its association with the University of Colorado.

“We live in a passionate community, but I love to see where we’re going with this partnership,” said Gannett, who also is a board member for the combined Greater Colorado Springs Chamber and EDC. “As you go forward, keep in mind that the business community leaders will be behind the effort.”

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The public hearing was held to get community insight into the $1.9 billion plan for the Denver-based University of Colorado Health – which includes Fort Collins’ Poudre Valley Health Center – to lease Memorial. The plan includes $74 million up-front payment, a $185 payment to deal with retirement pensions with the state’s Public Employees Retirement Association, $1.1 billion in capital improvements and $5.6 million for 30 years in lease payments. It also includes a profit-sharing model that will allow the city to receive surplus profit margins higher than Memorial’s current levels of profit.

But not everyone is enamored of the idea. Karen Rupprecht was worried about PERA benefits and starting over on a new retirement plan after working at Memorial for 18 years. She said there were 243 other employees just like her – vested in PERA with little time to switch and build a new retirement plan.

“We haven’t forgotten you,” Tim Leigh, City Councilman told the audience. “We haven’t forgotten employees in all this. We’ll make sure you get answers about retirement.”

Bruce Schroffel, president and CEO of UCH, said they tried to talk to PERA about keeping some of the long-term employees in the system, but there was no legal way to do it. However, he said he was convinced the benefits package that would be offered to employees would be satisfactory for most Memorial employees.

Dr. David Rosenbaum, a cardiologist with Pikes Peak Cardiology, said he found the lease “incredibly exciting,” and most doctors did as well.

“When it’s talked about … it’s nearly unanimous that we will see significant change,” he said. “One thing that hasn’t come to light in these discussions is national health care reform. Change is coming, and local community hospitals have to be facile, nimble to meet changes. The prospects of creating economy of scale, the knowledge base, the leaders of UCH are critical right now. ”

Rosenbaum said it was difficult to recruit doctors to his practice because of the uncertainty surrounding Memorial’s future – but he believed that will change if the lease is approved by voters.

City Council will review the final lease agreement and vote on it June 26. If approved, the next day, City Attorney Chris Melcher will hand-deliver the plan to Attorney General John Suthers to issue his opinion as required by the state’s Hospital Transfer Act. Suthers has 60 days to respond. The date for the election is Aug. 28.

“We don’t think he’ll take the entire 60 days,” said Melcher. “We’re going to make ourselves available to him, for questions. I’ve read every single one of his opinions on the Hospital Transfer Act, and I believe the city has some flexibility. Ours is a straight-forward arrangement, a lease from a nonprofit to a nonprofit.”


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Amber Baillie
A Colorado native, Amber Baillie graduated from the University of Northern Colorado with a bachelor’s degree in journalism and mass communications. For over three years, she wrote for the Air Force Academy's official base newspaper and has written articles for Your Boulder and the Cheyenne and Woodmen Editions. For the Business Journal, she covers cyber, aerospace and defense, and nonprofit news.