the heels are still dug in
Jindal urged to seize control in hospital flap
Broader role called for as LSU, Tulane argue over governance
Saturday, August 15, 2009
By Bill Barrow
Some New Orleans business and political leaders, all of them backers of a planned state teaching hospital in lower Mid-City, say the time has come for Gov. Bobby Jindal to get more directly involved in settling the long-running dispute between Tulane University and the Louisiana State University System over how to run the complex.
The entreaties come as state Health Secretary Alan Levine reopens negotiations after the secretary’s arduous spring effort ended with the LSU Board of Supervisors rejecting a proposed governing document for the planned 424-bed, $1.2 billion hospital.
“This is too important a project to fail,” City Council President Arnie Fielkow said. “It’s time to start making decisions. . . . The governor, behind the scenes, has articulated his support for the new hospital. Given that there has been no agreement, it may be time for a more personal involvement, both on (securing) funding and a governance deal.”
Kurt Weigle, who leads the Downtown Development District, was more explicit. He complimented Levine’s stewardship, but said: “There’s a really important role for the governor to play in bringing the parties together and getting this thing over the goal line. . . . At this point, it would be appropriate for the governor to get directly involved.”
Jim McNamara, who leads the Greater New Orleans Biosciences Economic Development District, concurred. “At some point, the governor has to get involved, and I think at this point it could make a difference,” he said. The district includes the proposed hospital campus.
Jindal, through an aide, declined to be interviewed about the LSU-Tulane quarrel and the details of a potential memorandum of understanding for the medical center. Spokesman Kyle Plotkin released a broadly worded statement about Jindal’s vision for an “independent” board that would run a “world-class academic medical center.”
The statement added nothing to what Jindal has already said publicly, and it offered no clues about what he thinks about the most glaring unresolved details: whether the new hospital’s holding corporation will be legally affiliated with LSU and, if so, how the seats on the corporation’s governing board will be distributed.
Plotkin said that Levine remains the administration’s front man on the issue, both in negotiations and in discussing the matter publicly. Levine said he hoped some resolution could be reached as early as next week.
Like the administration, Tulane and LSU authorities cast the discussions as coming down to Levine, LSU System President John Lombardi and Tulane University President Scott Cowen, even as they said the governor, school board members and several lawyers have talked about the matter.
But unlike Levine, Cowen and LSU Board Chairman-elect Blake Chatelain offered no timeline, and they declined to speculate on whether Jindal could yield progress by increasing his engagement. Cowen and Chatelain praised Levine’s efforts earlier this year and in a 2008 round of negotiations, the first during Jindal’s tenure.
Cowen said he has not talked with Jindal since the last talks ended in June. “I would not presume to advise the governor,” Cowen said. “Our lines of communication with the administration are open, whomever they send.”
LSU System Vice President Charles Zewe said it does not matter, because the policy differences would not change with the faces at the negotiating table. “It’s clear that Secretary Levine is speaking for the governor, and that is fine,” Zewe said. “This is not just lying fallow. . . . It’s not a simple thing. It’s not just a matter of having John Lombardi, Scott Cowen and Bobby Jindal in the same room.”
Yet the two schools remain entrenched, with Cowen and Chatelain agreeing that the next moves will be to react to a new plan the Jindal administration presents. Chatelain said nothing is on the table.
In June, Tulane’s board approved the Levine-brokered plan for an LSU-affiliated corporation with 12 board members: four from LSU, one each from Tulane and Xavier University, one shared by other New Orleans schools, and five “non-permanent” members selected by the permanent members but not tied to any of the campuses.
LSU’s Board of Supervisors rejected that model, with Lombardi arguing that the plan amounted to the state “using our credit card” to issue bond debt for construction without giving LSU adequate power on the board. The school countered with an 11-member board: five LSU members and only three rotating, unaffiliated members. The other schools’ presence would remain the same.
Cowen said this week that Tulane will not yield on its insistence that, whatever the model, the board’s largest voting bloc be the independent trustees. “That’s the only way to have a truly independent board,” he said.
Chatelain said, “I think our vote (in June) still reflects where our board members are.” But he and Zewe left the door open to reconsider LSU’s seat count under a new model the school believes would not be able to hinder its bond ratings. “Somebody has to step in and back that debt,” Zewe said.
Shortly after LSU rejected the deal, Levine floated the idea of setting up a corporation that does not depend on the university system’s bonding authority. But the secretary disputes the claim that the June model actually puts the LSU System on the hook for the debt. Under that draft, the bonds would be sold under the bonding authority already granted to the LSU system, but they would be revenue bonds leveraged against the hospital’s future earnings, not the finances of the university system.
Jindal and Levine have said throughout the process that the corporation must be set up in a way that keeps the bond debt from counting against the state’s constitutional borrowing limit. Levine added in a recent interview, however, that political realities dictate that the Legislature and any sitting governor would always protect the solvency of the hospital. “Every state supports their academic medical centers” regardless of the governance structure and debt sources, he said.
Levine has yet to tip his hand on how the state might structure a corporation to answer LSU’s concerns — or at least take away its argument — while meeting the administration’s conditions about state debt. “We’re waiting for Secretary Levine to put something on the table,” Zewe said. “The timing of that is of his choosing. We’re answering our phones.”
In New Orleans, Weigle maintained that it should be Jindal on the other end of the line. “I see the role of the CEO (in any organization) in many cases as the closer,” Weigle said. “There’s a certain point the lieutenants can take negotiations (to), but then it becomes the time for the boss to come in and wrap up the details.”