102620 Rural Health Care loan public hearingOctober 26, 2020 — Public Hearing
The Randolph County Board of Commissioners met in special session at 6:00 p.m. in the 1909
Randolph County Historic Courthouse Meeting Room, 145 Worth Street, Asheboro, NC.
Chairman Darrell Frye, Vice -Chairman David Allen, Commissioner Kenny Kidd, Commissioner
Maxton McDowell, and Commissioner Hope Haywood were present. Also present were County
Manager Hal Johnson, Finance Officer Will Massie, Deputy Clerk to the Board Sarah Pack, and
Clerk to the Board Dana Crisco. County Attorney Ben Morgan was absent. Representatives from
the City of Asheboro were Mayor David Smith and City Manager John Ogburn. Those present
representing Randolph Health were CEO Angie Orth, Senior Director of Public Relations &
Development April Thornton, and Board Chairman Mac Pugh. Attending the meeting via Zoom
conference call were Mike Sarian of American Healthcare Systems, LLC, Attorney for American
Healthcare Systems Faisal Gill of Gill Law Firm, Randolph Health Attorney Bob Wilson of Nelson
Mullins, Consultants Daniel Carter and Dawn Carter, Managing Director of Houlihan Lokey's
Financial Restructuring Group Andrew Turnbull, and Ankura Senior Managing Partner Louis
Robichaux. Required social distancing was maintained throughout the meeting due to the COVID-
19 pandemic.
Chairman Frye called the meeting to order at 6:00 p.m. He welcomed and thanked State Senator
Dave Craven and Representatives Pat Hurley and Allen McNeill, who were present in the
audience, for the work they had done on the legislation.
In November 2019, there was a Public Hearing to consider if application should be made for
the Rural Healthcare Stabilization Act (RHSA). This was followed by a Public Hearing in August
2020 regarding applying for the funds for the benefit of Dava/Java organization to purchase the
assets of Randolph Health and operate the hospital moving forward. However, this acquisition
was not completed. In the last two months, many things have changed. Chairman Frye introduced
Andrew Turnbull and asked him to explain what had occurred since the August 2020 hearing.
Mr. Turnbull thanked the Board. He explained that when Dava Foundation/Java submitted a
bid to move forward, the County proceeded with the Public Hearing. However, the Bankruptcy
Court requires that the seller search for other bidders who may be willing to offer a better
transaction to compete with the bid on the table. Mr. Turnbull's firm received bids from six parties.
Bids through the auction process were evaluated on three things: the ability to continue services,
the certainty of being able to close the transaction, and the value of the transaction to constituents.
American Healthcare Systems, LLC met all three qualifications and was the high bidder.
Mr. Turnbull said he and Mike Sarian had worked together previously on a transaction
involving a hospital system. They spent six months working together. He was pleased with the
experience Mr. Sarian has in turning hospitals around.
Chairman Frye thanked Mr. Turnbull and recognized Randolph Health CEO Angie Orth to
speak. Ms. Orth thanked the Board for the extensive effort they have made in securing local
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healthcare. Mr. Sarian currently works with American Healthcare Systems, LLC and has an
extensive thirty-year healthcare focused career. He has been involved in transitioning financially
distressed hospitals. His career includes numerous accolades and accomplishments. Ms. Orth is
excited about what Mr. Sarian will bring to Randolph County. She introduced Mike Sarian,
Founder and CEO of American Healthcare Systems, LLC.
Mr. Sarian said he is pleased to be working with people who are so interested in the success of
the hospital. He studied why the hospital is where it is to identify the problem. The problems the
hospital has are fixable. There is a good team ready to handle the transition. He commended Ms.
Orth's work. The hospital is a needed service in the community. There are about 100 people who
visit the Emergency Room (ER) on a daily basis. There is a great physician network who are
active in the community. With these two components, the hospital can be very successful. With
American Healthcare Systems, LLC's expertise and Ms. Orth's leadership, he is very confident
that the issues at hand can be addressed. There is a bright future ahead for Randolph Health. He
is thankful for the support and competent leadership of the Board of Commissioners.
Chairman Frye asked for more information regarding the Maternity, Obstetrics (OB), and
Intensive Care (ICU) units. Mr. Sarian said that to have a successful ER there needs to be an ICU.
The ICU was recently reopened and is seeing patients. An OB unit will be added because of the
success of the maternity ward at the hospital. Another idea is to add psychiatric services. The
community can benefit from this service. Up to forty beds will be earmarked for psych services.
There will be additional psych services to augment the hospital as well. These are services that
are needed and can be met by the hospital. These services will be in addition to current hospital
volume and will create an additional income stream. There will be some changes to the
management structure, but the main group of physicians won't change. Cone Health will be a
program partner that will continue running the Cancer Center with American Healthcare Systems,
LLC. ER doors will be open 24/7 and services will be improved.
Commissioner Haywood asked if Mr. Sarian will elaborate on how he will use the $20 million
from the RHSA. Mr. Sarian said that as part of the purchase agreement, those funds will be used
to purchase needed equipment for the hospital. This equipment is sorely needed and will help to
attract physicians and keep the ones already there. The money will not be used for operations.
Chairman Frye explained that this Public Hearing is different than the August Public Hearing.
Last week, the attorney representing American Healthcare Systems, LLC, Faisal Gill, visited
Asheboro. His career highlights include work with former President George Bush and the
Department of Homeland Security. The hospital will have more beds instead of less like suggested
by the previous partner. The forty psych beds are in addition to current beds and will help to care
for patients with addictions and overdose issues in the county. The Hearing is not about whether
or not to reapply, but rather to change the name on the application from Dava/Java to American
Healthcare Systems, LLC. The verbiage in the application will change to reflect the plans of
American Healthcare Systems, LLC and Mr. Sarian. American Healthcare Systems, LLC is
completing a feasibility study with a local firm. Randolph County representatives will go before
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the Local Government Commission Board at their January 2021 meeting to ask for approval of the
$20 million loan. The County, in conjunction with the City of Asheboro, have had legal
representation by Christy Myatt of Nexsen Pruett throughout this process. Ms. Myatt is drafting
security documents that have been discussed with Mr. Massie and Mr. Gill.
Chairman Frye recognized City of Asheboro Mayor David Smith. Mayor Smith thanked the
Board. Two months ago, he spoke regarding the devastating effects that losing the hospital would
have on the community. At the last hearing, there was overwhelming support from the community
to pursue the legislative funding for the RHSA. He thanked Senator Craven and Representatives
Hurley and McNeill for their work in getting the legislation passed. This journey has been difficult.
He thanked the Board for standing firm and not giving up. The Restructuring Committee at the
hospital has been meeting weekly for years and they have not given up. He thanked Ms. Orth and
her team. On behalf of the City and citizens, he urged the Board to continue to pursue the funding
from the RHSA. The only thing that has changed is the name of the operator and the plan for
growth. The county definitely needs psych services. The citizens support the Board in pursuing
funds for Randolph Health and American Healthcare Systems, LLC.
Chairman Frye said that the RHSA came about through a bill introduced by Senator Phil Berger
and former Senator Jerry Tillman. There were no other applicants for this money. Randolph
County is applying for the full amount available from the State of North Carolina.
Public Hearing
Chairman Frye went over the rules for the Public Hearing. Each speaker will be allotted four
minutes. Names will be drawn randomly. All who wish to speak will be allowed to do so.
Chairman Frye opened the Public Hearing at 6:47 p.m.
John Rogers, 1001 Kildare Road, Asheboro, quoted a verse from the New Testament of the
Bible. The Board has worked diligently to supply a basic need of healthcare to the community.
The journey has been fraught with ups and downs. The service of the Board is just as important
as his as a minister. He thanked the Board for their dedicated leadership. He prays that legislators
will continue looking for the opportunity to make this loan into a forgivable grant. He asked for
everyone to pray for those in Armenia as many people here have ties there.
Mr. Sarian said he is touched by these comments. He said faith is an important part of his life.
He is pleased to serve the community. His ancestors' land is under attack and he appreciates the
kind sentiments of Dr. Rogers.
Chairman Frye said Mr. Sarian is a widowed father with a ten -year-old daughter. That has
restricted his ability to travel due to COVID. That tells you about his character. He has a great
reputation in his community. He is the kind of person that cares for every patient that walks
through the door.
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Carol Matney, 2423 Waterside Dr., Asheboro, thanked the Board for their leadership.
Randolph Health has always been here for the community. It never occurred to her that it might
not be there. The presence of the hospital has given her family comfort. The compassionate staff
have cared for her parents. Randolph County needs the jobs and positive economic impact of the
hospital. Her husband has volunteered at the hospital and knows the dedication of the staff first
hand. When her son was born he arrived very quickly. They might not have had a pleasant birth
experience if they had to drive elsewhere for healthcare. She urged commissioners to amend the
application to include the American Healthcare Systems, LLC plan. Local healthcare access is
needed in the community.
Dr. Cindy Schroeder, 2623 Brassie Ct., Asheboro, is the Chair of Randolph Health Foundation
and a Randolph Community College (RCC) Trustee. She requested the Board amend their
application to reflect the change to American Healthcare Systems, LLC. She is very hopeful for
the future of the hospital. She is excited about the prospect of psychiatry and other new services.
She appreciates the support and partnership of the Board and Randolph Health towards keeping
quality healthcare here. Citizens deserve no less; healthcare is essential to the community. Local
healthcare affects the economy and quality of the life of citizens. If jobs were lost, families would
move away and schools would be affected. There would be consequences for RCC. Recruiting
for new business and industry with no local healthcare would be difficult. Even a forty -minute
drive for healthcare is difficult. Some citizens will choose not to pursue life-saving treatments if
they are facing challenges of transportation. She thanked Ms. Orth, the leadership, and the
employees of Randolph Health for keeping the quality of services for citizens. She thanked the
Board for their consideration.
Dr. David Jones, 1699 Sylvan Way, Asheboro, said it has been a heartfelt and heartbreaking
effort to maintain local healthcare. He hopes the community recognizes the effort put forth. He
is the former Zoo Director. The Zoo would have hit one million visitors this year had it not been
for COVID. There could be 10-15 thousand people at the zoo on any given day. A forty -minute
trip to Greensboro to treat a wasp sting does not bode well for visitors. Young people are important
for the economy and may not choose Randolph County without a hospital. The older, retired
generations need local healthcare to live in Randolph County. Without the younger and older
generations in Randolph County, property values will decrease. He asked the Board to pursue the
$20 million loan as aggressively as they can.
Mark Hensley, 1326 Middleton Circle, Asheboro, is Executive Director of Randolph Senior
Adults Association. He supports the modifications to the application. This is his third time
speaking in support of the hospital. He has already thanked Randolph Health. He now wants to
thank the Board for their exceptional work and diligence in securing healthcare for the county. He
welcomed Mr. Sarian and said that he will come to appreciate the connections to the community.
Healthcare is of critical importance to senior adults. This is the fastest growing demographic. The
Association has served 65,000 meals to seniors since the closure due to COVID. Without local
healthcare, many will go without due to the challenges of accessing healthcare. We are "inside
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the red zone and ready to win the game." This is about life, livelihoods of citizens, and the life of
the community. He asked the Board to push this initiative for retaining local healthcare.
Kelly Heath, 1030 Westmont Drive, Asheboro, Board Chair of Asheboro/Randolph Chamber
of Commerce. She has attended three Public Hearings to show support. This has been a journey
and she and others will keep coming back. She urged the Board to vote to amend the application
to reflect the American Healthcare Systems, LLC plan. Businesses need and want local healthcare.
The Randolph County economy relies on those businesses. She thanked the Board for their time
and effort.
Dale Dowdle, 330 W. Presnell Street, Asheboro, recently moved to the county. When he and
his wife got here, there was discussion of the hospital closing. They had bought a home close to
the hospital to be within walking distance. His wife is a hospital worker with thirty -years of
experience. He has volunteered at the hospital. It was a wonderful experience but he had a sinking
feeling that the hospital would close. Two weeks after the move, his wife had serious healthcare
issues. Her care at the hospital was wonderful. They are very happy to have been in Randolph
County for six months. Saving the hospital validates their move to the county. Without one, they
would have gone elsewhere.
Chairman Frye said previous speakers were community leaders who have been involved in the
county for years. He is happy to hear the unbiased opinion of Mr. Dowdle and appreciates the
comments about what is needed in the community.
Hearing no other comments, Chairman Frye closed the Public Hearing at 7:12 p.m.
Mr. Sarian said participating in the Public Hearing was a wonderful experience. He is
committed to staying in the community and adding services. He is looking forward to meeting the
Board and citizens in person. He heard the speakers loud and clear and is ready to serve the
community.
Commissioner McDowell said that his district is the most rural. He has had several comments
from citizens who expressed similar concerns to those who spoke. He is encouraged with the new
plans for Randolph Health and American Healthcare Systems, LLC. He has heard comments in
favor of the proposed psych unit addition. It is reassuring for many people in the county to know
that psych services will be available. There are options regarding repayment of the loan and that
Is encouraging.
Chairman Frye said there are at least three sources of revenue to repay the loan. The loan must
be repaid in full. One cent on the property tax rate is an option. There are also landfill and sales
tax revenues. So far, budget projections are being met. The financing options are more
encouraging than they were at previous hearings, regardless of the pandemic.
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Commissioner Haywood said when news of the bankruptcy got out, she began hearing that
citizens were frustrated, angry, and concerned. How Randolph Health got to this point no longer
matters. Rather, it is what will be done to advance it that matters. She is pleased that everyone
has worked together to retain a hospital; leaders in legislatures, the City of Asheboro, the County,
churches, and nonprofits. Her late husband had cancer and was treated at the Cancer Center at
Randolph Health. It would have been worth an extra penny on the tax rate for him to be treated
close to home. It was easy as a family for her sons to visit him during treatment and friends to
stop by. That would not have been possible if he had been in another city receiving treatment.
She is grateful for the local treatment options. Most people in that situation would agree that when
it comes to property taxes, we can deal with it. People have realized how important healthcare is
to the county and she feels that citizens will agree.
Commissioner Kidd thanked Mr. Sarian. He thanked all the people who worked to get to this
point. He reiterated Mr. Hensley's point about the red zone. Because of the actions of previous
Boards, the County government is in good financial health even when considering all that the
Board is dealing with. This is not tied to a tax increase; that is a funding decision.
Commissioner Allen addressed the legislators and said that loan forgiveness would be the
easiest option. Previously, he thought this vote would be a tough one. After the August meeting,
it was an easier vote than he thought. Now there is a new entity that will enhance services and
maintain everything the hospital had to this point. The vote is getting easier regardless of funding
options.
Chairman Frye introduced the Resolution Making Required Findings.
On motion of Kidd, seconded by Haywood, the Board voted unanimously (5-0) to approve the
adoption of the Resolution Making Required Findings. This Resolution will follow these minutes
as Attachment A.
Chairman Frye introduced the Resolution Requesting Approval of the Local Government
Commission.
On motion of Kidd, seconded by Allen, the Board voted unanimously (5-0) to approve the
adoption of the Resolution Requesting the Approval of the Local Government Commission. This
Resolution will follow these minutes as Attachment B.
Chairman Frye thanked everyone for their participation and comments. The public will feel
better about the decisions made by the Board. He looks forward to having Mr. Sarian in Randolph
County.
Mac Pugh, Chair of the Randolph Health Board, thanked the Commissioners and the
Legislators for their efforts.
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Adjournment
At 7:29 p.m., on motion of Allen, seconded by Haywood, the Board voted unanimously to
adjourn.
Darrell Frye, Chairman David Allen
Kenny Kidd
Hope Haywood
Maxton McDowell
Dana Crisco, Clerk to the Board
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