Gold Cross lays out case
FAIRMONT – Gold Cross defended its relationship with Fairmont in a presentation Monday evening at City Hall.
Since 2002, Gold Cross has been leasing space in Fairmont’s fire hall for $1 per year, an arrangement that began when Mayo was planning to add an ambulance bay to its Fairmont site. No ambulance bay has been built, and the City Council recently began discussing a rent hike, with suggestions ranging from $1,500 to $3,100 per month.
“For 10 years, they’ve had a free ride,” Councilman Terry Anderson said at the April 8 council meeting. “It was supposed to be short-term. I think it’s time to fish or cut bait.”
On Monday, the council directed City Administrator Mike Humpal to negotiate a new lease with Gold Cross, after hearing from Paul Anderson, chief operating officer for Gold Cross, who requested the lease remain as is.
Paul Anderson maintained it has not been a “free ride,” as he described the past 10 years from his point of view. During that time, he said Gold Cross provided direct and in-kind contributions worth $93,000 to the city of Fairmont in the following ways:
o Free training and public safety support to the Fairmont Fire Department worth $16,200.
o Upgrades and ongoing maintenance of the fire hall, worth about $19,000.
o At least 300 hours of uncompensated stand-by service at community events, for which they could have charged an estimated $51,400.
o Donations of $7,500.
Paul Anderson also clarified some points of confusion, one of which was the misstatement by Terry Anderson that Gold Cross is a for-profit company, which it is not.
“We have never had a positive net operating income here,” Paul Anderson said. “We have lost money every year we’ve operated in Fairmont.”
The reason cited for the loss is the high number of Medicare patients in Fairmont, who receive a mandated discount.
“Gold Cross collects about 40 cents on every dollar,” for Medicare patients, Paul Anderson explained.
Because of the many federal mandates Gold Cross faces, he said the partnership with the city has been essential in helping the organization continue to provide top-quality service.
“Without new revenue streams, Gold Cross cannot increase its expenses,” he said, but he later added that he did understand “the financial pressures that impact us all.”
Following his presentation, the council had a few more questions, including how Gold Cross can continue to function if it is losing money in Fairmont. According to Paul Anderson, the profits made in other communities help offset the local losses.
Councilman Terry Anderson thanked the chief operating officer for “dispelling the myth that whether or not you pay rent, you are here to stay,” since there was concern that forcing a higher rent on Gold Cross might force the organization out of town.
“They’re not going to walk away from this. It’s too lucrative for them in the long run. … They need this to feed a regional center that was going to be in Fairmont and is now in Mankato,” said Terry Anderson, referring to Mayo Clinic Health System in Mankato.
The councilman also accused Police Chief Greg Brolsma and Humpal of having a conflict of interest, since Brolsma is on Mayo Clinic Health System-Fairmont board and Humpal’s wife works at the hospital. Both men expressed reluctance earlier this month when Terry Anderson wanted to force a lease on Gold Cross without any negotiations.
“I gain financially zero from my wife working at the hospital. I just don’t see the connection there, so I believe there is no conflict of interest,” Humpal said. “I gain nothing by the decision you make. You hired me to make the best professional decision I can, and my opinion was that you ought to allow me to negotiate a new lease.”
The council discussed calling for an open hearing at its next meeting, to encourage the public to give its input on the topic, but they were reluctant to drag things out any longer.
“We can get more public opinion; I have no problem if we want to do that,” said Councilman Joe Kallemeyn. “If it was just my decision alone, which it isn’t, I would like to continue working out those dollar figures and I’d like to see in the lease agreement … Mayo explore building an ambulance bay, so maybe some sunset on the lease. I know our fire department could use the space, if they could come up with other arrangements in the next few years. I know it would not happen overnight.”
Other council members agreed three years would be an adequate sunset, though Terry Anderson wanted to give just 18 months.
Mayor Randy Quiring encouraged the council to let the city administrator “negotiate, look at the sunsets and dollar amounts and come back to us. Let Mike continue his negotiations and come up with something that’s fair and equitable to everyone.”