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March 1, 2019

Mayo Regional Hospital board votes to tax member communities to cover debt service

Courtesy / Mayo Regional Hospital
Courtesy / Mayo Regional Hospital
Mayo Regional Hospital Executive Director Marie Vienneau describes a proposed merger with Northern Light Health as "the best possible scenario for the people we serve." In addition to giving the go-ahead for a potential merger with Northern Light Health, the board that oversees Mayo Regional Hospital voted 14-2 on Wednesday night to tax the 13 communities served by the hospital should it need additional revenue to balance the hospital’s debt service.

About Mayo Regional Hospital

Mayo Regional Hospital is a 25-bed critical access hospital and health system in Dover-Foxcroft, Maine. Mayo has five rural health clinics throughout the region, provides EMS for all of Piscataquis County, psychiatry and counseling services, and various surgical specialities.

In addition to giving the go-ahead for a potential merger with Northern Light Health, the board that oversees Mayo Regional Hospital voted 14-2 on Wednesday night to tax the 13 communities served by the hospital should it need additional revenue to balance the hospital's debt service.

Two board members abstained and one board member was absent.

Because Mayo Regional Hospital is owned and operated as a Hospital Administrative District, its board is made up of members who are elected by the communities served by the hospital. Hospital Administrative District 4 is the only one left in Maine and is a quasi-governmental agency with taxing power. Tax bills cannot be issued until after Oct. 1, and the board said it is hopeful this will not come to reality.

"However, the towns are currently doing their budgets for next year and need to know potential obligations," the board stated in its news release.

"This was an extraordinarily difficult decision to reach," said Mayo Regional Hospital President and CEO Marie Vienneau. "Money is tight for everyone and the last thing we wanted to do was place an additional tax burden on the people in these communities. But this hospital is a small, rural hospital faced with rising costs and increased challenges. In order for us to survive, changes must be made. While we are tightening our belt as much as possible, we still must ensure quality care. These additional taxes will ensure that quality care for people living here."

Each of the 13 member communities will be responsible for a particular amount of money approved by the Hospital Administrative District 4 board Wednesday night. The total amount of the tax in 2019 would be a little more than $1 million.

As reported in Mainebiz on Thursday, also on Wednesday night, the board voted 15-3 to proceed with a potential merger with Northern Light Health.

Several steps must still be undertaken for the merger to be permitted, including a change in the state charter for Hospital Administrative District 4, approval by the Northern Light Health Board, and a state review of the merger through a formal "certificate of need" application and analysis process.

If the merger were to pass, it would transform Hospital Administrative District 4 into a Maine charitable tax-exempt nonprofit corporation that would have a community-based board, but not taxing authority. This would relieve the towns in the district from potential liability for the certain indebtedness of the hospital.

"Health care is changing," said Vienneau. "Being a hospital administrative district 40 years ago gave rural hospitals certain opportunities. But things have evolved to the point where that model has become very expensive for the communities we serve. We are working hard and taking important steps to find a better solution to sustain quality care in this region."

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