Hospital asks city to waive fees for new transformer

Staff reporter

Upgrading hospital equipment comes at an expense to the hospital and to the city.

So, who should pay?

Joe Pickett of St. Luke Hospital & Living Center, asked Marion City Council Monday evening to make an exception to a city ordinance that requires businesses to share expenses for utility upgrades because of equipment improvements.

The hospital's X-ray department has spent $1.2 million to upgrade equipment. A power audit was conducted by the company that sold the equipment to the hospital and found the electrical service to be inadequate.

"The equipment is very, very sensitive to fluxuation of power," Pickett said.

Currently there is a city 225 kVA transformer being used by the hospital's X-ray department which needs to be upgraded to a 500 kVA.

"I've been told that if two or more of the X-ray units are operating at the same time, there isn't enough power to accommodate them and it could damage the equipment," Pickett said.

Pickett said when he asked city public works director Harvey Sanders what the cost would be to the hospital to upgrade the electricity, he was told there would be no cost.

Recently when Sanders was notified that the last system was being installed and it would be a good time to replace the transformer, Pickett said he was told that the hospital would have to pay $6,200 which is half the cost of the transformer.

"I didn't budget for this because I understood there wasn't going to be a charge," Pickett said.

"You are in the business of providing power to use. We're in the business of using it but I don't think it's right for us to be charged," he said. Pickett continued that he believed it was the city's cost of doing business. He reminded the council that the hospital is a large electricity user.

"We're not very happy about having to pay for this," Pickett said.

The issue recently came to light when MRI services changed from Saturdays to Tuesdays.

Councilman Steven Smith asked if any other businesses had the same electrical requirements. City administrator David Mayfield said that would be a question for Sanders to answer who had already left the meeting. Mayfield said the city did order additional transformers for Cooperative Grain & Supply when the new elevator was built, the school for its new buildings, and the courthouse.

City attorney Dan Baldwin said maybe when Sanders answered the hospital's question the ordinance wasn't yet in place. The ordinance was passed Feb. 12, 2007.

Councilman Stacey Collett said he sympathized with the hospital but as an ATMOS Energy employee, his company charges for upgrades.

"If we didn't charge for upgrades, every rate payer would have to pay for it," he said.

Councilman Gene Winkler asked about future improvements at the hospital that could require additional services. Hospital administrator Jeremy Armstrong responded if the hospital was to build and expand, the costs would be budgeted.

"That's what the problem was with this. We hadn't budgeted for this," he said.

In the end, the council agreed that the ordinance was in place and would be followed. However, the hospital could wait to pay for the transformer when the 2009 budget begins Oct. 1.

"We have the money to pay for it but it's not a budgeted expense," Armstrong said in response to the suggestion of the hospital making monthly payments to the city.