What happens to the Hospital $86 million?

The jumping off discussion area for the rest of the Deck. All things Lakewood.
Please check out our other sections. As we refile many discussions from the past into
their proper sections please check them out and offer suggestions.

Moderators: Jim DeVito, Dan Alaimo

Stan Austin
Contributor
Posts: 2462
Joined: Tue Mar 15, 2005 12:02 pm
Contact:

Re: What happens to the Hospital $86 million?

Postby Stan Austin » Sat Dec 09, 2017 4:13 pm

Here's another ethereal hyperbolic kind of question--- these sums of money, values, how would they appear in reality? Do they show up in a Brinks Truck? Are these credits on Lakewood's ledgers? Is it Bitcoin?


User avatar
Jim O'Bryan
Posts: 14103
Joined: Thu Mar 10, 2005 10:12 pm
Location: Lakewood
Contact:

Re: What happens to the Hospital $86 million?

Postby Jim O'Bryan » Sat Dec 09, 2017 6:21 pm

Stan Austin wrote:Here's another ethereal hyperbolic kind of question--- these sums of money, values, how would they appear in reality? Do they show up in a Brinks Truck? Are these credits on Lakewood's ledgers? Is it Bitcoin?



Brian can answer far better than I, but I believe it has always been help by CCF, you know it's yours :wink: :wink: As long as you don;t ask for it.

Had it been in bitcoin, we would have gone up 800%, if not more.

Hell had it been put into the LO proposed community currency "grinders," it would be worth 250% more.

The worst way to invest it was the way the last two mayors decided to do it.

.


Jim O'Bryan
Lakewood Resident

"The very act of observing disturbs the system."
Werner Heisenberg

"If anything I've said seems useful to you, I'm glad.
If not, don't worry. Just forget about it."
His Holiness The Dalai Lama
Mark Kindt
Posts: 2637
Joined: Sat Dec 03, 2016 11:06 am

Re: What happens to the Hospital $86 million?

Postby Mark Kindt » Sun Dec 10, 2017 10:05 am

Stan Austin wrote:Here's another ethereal hyperbolic kind of question--- these sums of money, values, how would they appear in reality? Do they show up in a Brinks Truck? Are these credits on Lakewood's ledgers? Is it Bitcoin?


Mr. Austin, the best way to track the movement of these funds to the City of Lakewood under the Master Agreement is to monitor the annual reports that the City issues. Because some of the payments have not occurred yet, we won't see them reported until 2018, 2019, 2020 etc.

Tracking distributions under the Master Agreement to other parties is indeed more challenging.

The city administration had no independent appraisal of the hospital prior to its liquidation. The city administration cannot document (or produce documents) that would show the value of the wind-down costs related to that liquidation.

But, I do want to echo Mr. O'Bryan's earlier point, the Lakewood Observer reported extensively on the financial aspects of the hospital debacle right from the start.

This would all be old news, except that the city administration has made such a vigorous effort to prevent the timely disclosure of public documents about the hospital transaction.


Brian Essi
Posts: 2421
Joined: Thu May 07, 2015 11:46 am

Re: What happens to the Hospital $86 million?

Postby Brian Essi » Mon Dec 11, 2017 8:57 am

Mr. Call,

Here are some old post that are responsive

viewtopic.php?f=7&t=22730&p=164680#p164680


Brian Essi wrote:Here is another WHOPPER:

1. On page E2 of the Plain Dealer dated 12/13/15, Summers said: "$12 million of the hospital's $78 million in wind down costs would be borne by the Clinic" and on page A2 of the Plain Dealer dated 12/13/15 to wit: "the Clinic could end up spending $12 million toward the $78 million in wind down costs."

2. That same day (12/13/15) I made a public records request asking for: "All public records that are the basis of Mayor Summers' statements as reported on page E2 of the Plain Dealer dated 12/13/15 to wit "$12 million of the hospital's $78 million in wind down costs would be borne by the Clinic" and on page A2 of the Plain Dealer dated 12/13/15 to wit: "the Clinic could end up spending $12 million toward the $78 million in wind down costs."  I also made three other requests for any and all public records of estimated wind down expenses.

3. On February 3, 2016, Mr. Butler Responded responded to all four records requests as follows:"The city bears no written record of the Cleveland Clinic’s or LHA’s wind-down costs, although much information was exchanged during the parties’ negotiation of the master agreement."

4. The December 21, 2015 Master Agreement terms gave CCF $70M of the Hospital’s value (cash, accounts receivable, $27M investment portfolio, bed licenses, equipment, fixtures, a non-compete covenant, discounted buildings and land, etc.) in exchange for the “risk” that CCF might have to pay some wind down expenses. Healthcare and legals experts have estimated that CCF will get all that stuff free and pocket at least $20M of LHA's investment portfolio in the wind down.

5. So our City gave $70M of value to CCF based upon a conversation about $78M in alleged costs---no written record of those expenses exist---no documents were exchanged and no notes were ever taken by anyone--not Butler, not Thompson Hine, not Summers.

I learned a simple rule 32 years ago when I began my career in handling business transactions: “If it ain’t in black and white, it ain’t.”

Folks this isn't right. It is very very wrong.

So here is the simplest way to see through this obviously fraudulent claim by Summers and City Hall:

If the hospital was actually losing $1M per month last year (which it was not), and they quickly shut it down cutting their costs to nearly nothing in less than 2 months after signing the agreement, how much money did it cost to wind down the hospital?

"Folks this is not rocket surgery" JOB


It took less than $2M of losses to close the hospital in Feb 2016.

2 years ago this week, Summers made his false claims about how it would $78 million to wind down a going concern worth about $70M (not including the LHA $50M investment portfolio and $33M of LHF investment) Note: the $27M portfolio figure I referred to in Feb 2016 was a net figure after deducting the NPV of the New Fake Foundation funding and the demolition payments.

So, they gave Mr. Call's $86M away as a "Dissolution Distribution" based upon a fabricated wind down "risks"--they paid twice from taxpayers funds for things wind down expenses and risks that did not exist.

viewtopic.php?f=7&t=24083&p=177640&hilit=paid+twice#p177640


David Anderson has no legitimate answers
Brian Essi
Posts: 2421
Joined: Thu May 07, 2015 11:46 am

Re: What happens to the Hospital $86 million?

Postby Brian Essi » Mon Dec 11, 2017 9:19 am

Below is a records request I made to the City on September 20, 2016, Lakewood's response on March 8, 2017 saying it did not understand the request and could not find any spreadsheets and then (in Yellow) only record ever produced that was supposedly responsive to PRR 285---produced on October 25, 2017 when Summers retrieved the record during a brief break at his deposition.

PRR285 All records, emails, notes, and communications – electronic or otherwise – including spreadsheets or calculations that estimate or establish the economic and/or financial value of the Letter of Intent or the Master Agreement.

Please Note: The Fuzzy Math used by Summers and that Summers' $78M in wind down costs somehow was reduced to $29M in wind down costs--still not substantiated

Also Note: Summers testified that this record was a "spreadsheet" and created in "the Fall of 2016"--nearly a year after the Master Agreement analysis.

scan0344.jpg
scan0344.jpg (787.18 KiB) Viewed 2796 times


From: Butler, Kevin
Sent: Wednesday, March 8, 2017 9:53 AM
To: 'Brian Essi'
Cc: Petrus, Jeannine
Subject: RE: PRR 226-323 and Amended PRR 313 - 314

Mr. Essi:

In Nos. 233, 234, 252, 265, 266, 267, 268, 269, 270, 285, 286, 287, 288, 289, 290, 291, 292, 293, 294, 295 and 296 of your Sept. 20, 2016 public records request, you ask for the following:

All records, correspondence, emails and communications – electronic or otherwise – from any City Council member to any other City Council member from March 1, 2015, through December 7, 2015, containing the term “draft definitive agreement.”
All records, correspondence, emails and communications – electronic or otherwise – from any City Council member to any other City Council member from March 1, 2015, through December 7, 2015, containing the term “new definitive agreement”
All records, emails, notes, and communications – electronic or otherwise – of any discussion among Council members, Butler and /or any city employee about the print or online version of the article on page 5 the Lakewood Observer dated September 15, 2015 http://rnedia.lakewoodobserver.com/issue pdfs/Observer Vol 11 Issue 19.pdf and posted as follows: http ://lakewoodobserver.corn/read/2015/09/15/citys-rights-will-be-deterrnined-bythe- court.
All records, emails, notes, and communications – electronic or otherwise - regarding Summers’ resignation as a trustee of Lakewood Hospital Association (“LHA”).
All records, emails, notes, and communications – electronic or otherwise – of Tom Bullock’s resignation or termination as a trustee of LHA.
All records, emails, notes, and communications – electronic or otherwise – of Mary Madigan’s resignation or termination as a trustee of LHA.
All records, emails, notes, and communications – electronic or otherwise - regarding Summers’ Thursday, October 22, 2015. 4:15 PM – 4:45 PM private meeting referred to on his calendar.
All records, emails, notes, and communications – electronic or otherwise – of Summers’ Thursday, October 22, 2015 5:30 PM – 7:00 PM private meeting referred to on his calendar.
All records, emails, notes, minutes and communications of any meeting or discussion of any “communications strategy” by or among members of City Council from March 1, 2015, though the date of your response to this request.
All records, emails, notes, and communications – electronic or otherwise - including spreadsheets or calculations that estimate or establish the economic and/or financial value of the Letter of Intent or the Master Agreement.
All records, emails, notes, and communications – electronic or otherwise - including spreadsheets or calculations created by or provided to any public relations firm that estimate or establish the economic and/or financial value of the Letter of Intent or the Master Agreement.
All records, emails, notes, and communications – electronic or otherwise - including spreadsheets or calculations used by any city employee or elected city official for any purpose that estimate or establish the economic and/or financial value of the Letter of Intent or the Master Agreement.
All records, emails, notes, and communications – electronic or otherwise - including spreadsheets or calculations created by or used by City employees Jenn Pae and/or Colin McEwen for any purpose that estimate or establish the economic and/or financial value of the Letter of Intent or the Master Agreement.
All records, emails, notes, and communications – electronic or otherwise including spreadsheets or calculation created by or used by Colin McEwen or Barbara Paynter for a Press Release issued on January 15, 2015, about Lakewood Hospital that estimate or establish the economic and/or financial value of the Letter of Intent.
All records, emails, notes, and communications – electronic or otherwise – of any communication between any city employee or elected city official that concerns the estimation of the economic and/or financial value of the Letter of Intent or the Master Agreement and any economic development benefits from those transactions.
All records, emails, notes, and communications – electronic or otherwise - including spreadsheets or calculations created or used by any city employee limited to the economic development functions or department of the City that estimate or establish the economic and/or financial value of the Letter of Intent or the Master Agreement and any economic development benefits from such transactions.
All records, emails, notes, and communications – electronic or otherwise - created by or used by any City employee or elected city official that describe, discuss or refer to any matter related to the Ohio Ethics Commission limited to Lakewood Hospital, Lakewood Hospital Association, Lakewood Hospital Foundation, the Letter of Intent, and/or the Master Agreement.
All records, emails, notes, and communications – electronic or otherwise - created by or used by any City employee or elected city official that describe, discuss or refer to any matter related to the Ohio Auditor of State limited to Lakewood Hospital, Lakewood Hospital Association, Lakewood Hospital Foundations, the Letter of Intent, and/or the Master Agreement.
All records, emails, notes, and communications – electronic or otherwise – created by or used by any City employee or elected city official that describe, discuss or refer to any legal complaints, legal process or legal action to be taken or actually taken against any person within the last year. This request is limited to legal actions where the City of Lakewood is not a party.
All records, emails, notes, and communications – electronic or otherwise - created by or used by any City employee or elected city official that describe, discuss or refer to the case of Uldricks v. O’Bryan, Cuyahoga No. CV-16-864146 (Judge Michael P. Donnelly). This request is limited to legal actions where the City of Lakewood is not a party.
All records, emails, notes, and communications – electronic or otherwise -from any city employee or elected city official to any Cuyahoga County employee or Cuyahoga County elected official regarding the Cleveland Clinic, the Lakewood Hospital Foundation or the Lakewood Hospital Foundation from January 1, 2014, through September 16, 2016.

Because these requests seek records “regarding”, “discussing,” “referring to,” “describing,” “estimating,” “establishing” or “containing” another thing, the requests are vague, overly broad and/or ambiguous, and are, to that extent, therefore denied. The Ohio Supreme Court has held that a public records request must describe the records desired with reasonable and sufficient clarity and not be overly broad and ambiguous. State ex rel. Morgan v. New Lexington, 112 Ohio St.3d 33, 2006-Ohio-6365, ¶29, quoting State ex rel. Fant v. Tober, 68 Ohio St.3d 117 (1993). A request for “any and all records relating to a particular person or topic is an inappropriate public records request because it fails to identify the particular records sought.” State ex rel. Dillery v. Icsman, 92 Ohio St. 3d 312, 2001-Ohio-193; accord, Ohio Sunshine Laws: An Open Government Resource Manual 2016, p. 13.

A governmental office has no duty to “seek out and retrieve those records which would contain the information of interest to the requester.” Fant v. Taber, 1993 Ohio App. LEXIS 2591 at *4 (8th Dist. Apr. 28, 1993); aff’d 68 Ohio St.3d 117 (1993). Finally, a public office is under no obligation to search for records containing selected information. State ex rel. Thomas v. Ohio State University, 71 Ohio St.3d 245 (1994). Based on the manner in which the City ordinarily maintains and access the public records it keeps, it was unable to identify records responsive to these requests. State ex rel. Dehler v. Spatny, 127 Ohio St.3d 312, 2010-Ohio-5711; State ex rel. Morgan v. Strickland, 121 Ohio St.3d 600, 2009-Ohio-1901; State ex rel. Zauderer v. Joseph, 62 Ohio App.3d 752 (10th Dist. 1989).

If you wish to provide further clarity with respect to these requests by “identify[ing] the particular records sought,” Dillery, 92 Ohio St. 3d 312, 2001-Ohio-193, please feel free to do so. Otherwise, we are unable to respond to these requests.

Best wishes,

Kevin M. Butler, Director of Law
City of Lakewood | Law Department
(216) 529-6034
kevin.butler@lakewoodoh.net


David Anderson has no legitimate answers
Mark Kindt
Posts: 2637
Joined: Sat Dec 03, 2016 11:06 am

Re: What happens to the Hospital $86 million?

Postby Mark Kindt » Mon Dec 11, 2017 11:43 am

Now let's see whether or not the Finance Director's exhibit tracks the Mayor's exhibit.

Both documents were created in the fall of 2016. Again, we are not making this stuff up. These are actual City of Lakewood documents.

You be the judge.
Attachments
Finance Director Exhibit A.pdf
(62.45 KiB) Downloaded 145 times
Last edited by Mark Kindt on Mon Dec 11, 2017 12:10 pm, edited 1 time in total.


Mark Kindt
Posts: 2637
Joined: Sat Dec 03, 2016 11:06 am

Re: What happens to the Hospital $86 million?

Postby Mark Kindt » Mon Dec 11, 2017 11:55 am

This is all actually rather ridiculous.

There is a $20 million dollar difference in these two documents on an apples-to-apples comparison.

In fact, what is worse is that neither the Mayor's exhibit nor the Finance Director's exhibit corresponds with the Master Agreement or the City of Lakewood's own annual reports.

I return to my analysis set forth in "Honesty in Local Government I" that the City of Lakewood has made numerous material financial misrepresentation in violation of the federal securities laws. The document that Mr. Essi posted is just another example.

I want to make the basic point here that as a citizen, voter and taxpayer in Lakewood, I am tired of being lied to by most of my elected and appointed city officials.


Mark Kindt
Posts: 2637
Joined: Sat Dec 03, 2016 11:06 am

Re: What happens to the Hospital $86 million?

Postby Mark Kindt » Mon Dec 11, 2017 1:25 pm

It would all be rather ridiculous, except that...

These two public documents were used in court proceedings to defend the City of Lakewood from liability.

Lawyers reading this post will understand that, as a lawyer myself, I am concerned that the City of Lakewood has been reckless (or worse) in respect to its obligations to opposing counsel and to the judiciary.

I have already demonstrated elsewhere that the Finance Director's sworn affidavit is a misrepresentation.

A similar analysis would demonstrate that the contents of the Mayor's Exhibit H also constitute a misrepresentation.


Mark Kindt
Posts: 2637
Joined: Sat Dec 03, 2016 11:06 am

Re: What happens to the Hospital $86 million?

Postby Mark Kindt » Mon Dec 11, 2017 4:08 pm

Here is a comparison of the Mayor's Exhibit H and the Finance Director's Exhibit A.

You be the judge.
Attachments
Comparison of Financial Exhibits.jpg
Comparison of Financial Exhibits.jpg (230.96 KiB) Viewed 2673 times


Mark Kindt
Posts: 2637
Joined: Sat Dec 03, 2016 11:06 am

Re: What happens to the Hospital $86 million?

Postby Mark Kindt » Mon Dec 11, 2017 4:51 pm

Now take a look at this comparison chart and consider the following:

1. Aren't we giving this hospital site to the recommended developer for $1.00?

2. Aren't we planning to use the site demolition funds for the benefit of the recommended developer?

3. Aren't the future lease payments just a wash for other future lease payments (under a different contract)?

4. Aren't there lost income tax revenues that won't be replaced by employment at the Family Health Center?

5. Is there actually a net financial benefit to the City of Lakewood's treasury or is the liquidation of the hospital assets a net loss to the City treasury?

As far as I can tell, the only assets that went (or will go) into the treasury were sale proceeds from 850 Columbia Road property and the Belle/Detroit property.

Whatever asset value or going-concern value of Lakewood Hospital went to other entities. The citizens of Lakewood took an immense bath on this liquidation.

What am I missing here?


cameron karslake
Posts: 645
Joined: Thu Apr 23, 2015 8:35 am

Re: What happens to the Hospital $86 million?

Postby cameron karslake » Mon Dec 11, 2017 7:46 pm

Stan Austin wrote:There seems to be about $120 million missing from all of these calculations


...and that's the utterly sick part!


Bill Call
Posts: 3312
Joined: Mon Jun 06, 2005 1:10 pm

Re: What happens to the Hospital $86 million?

Postby Bill Call » Fri Dec 15, 2017 11:32 am

Here are few comments about the 2016 Cleveland Clinic Financial Statements:

Administrative services:

The Clinic reports that administrative service costs were about 2.7% of total system revenue. The odd thing is that the Clinic was charging Lakewood Hospital 10% of revenue for administrative services in 2009 and 25% of system revenue in 2015.

The really odd thing:

In 2015 Lakewood Hospital revenue was $95.3 million and administrative charges were $24.4 million.

But

In 2014 Lakewood Hospital revenue was $118 million and administrative charges were $24.3 million.

Apparently administrative service fees charged to Lakewood were unrelated to revenue or employment.

Charity care:

In 2016 the Clinic provided $87 million in charity care on revenue of $7.2 billion.

Note 11:

“The City of Lakewood, Ohio (the City) leases real and personal property to Lakewood Hospital Association….” (I quote that for the sake of people who are still saying that the City never owned the hospital.)

The notes state that:

The net present value of future lease payments to the City is $1.6 million.

The system recorded a $6.9 million gain related to changes in the lease terms for Lakewood Hospital.

LHA has approximately $27 million on net assets included in the Systems unrestricted net assets at December 31, 2016, available for use under the terms of the current lease.

The system incurred $17.8 million of accelerated depreciation expense and other costs related to LHA. Depreciation costs were $13.3 million and employee retention costs were $800,000.

Since the Clinic took possession of LHA’s assets we can ignore the accelerated depreciation costs associated with the hospital closure. So the true “cost” to the Clinic is a gain of about $6 million.

No word on the disposition of the $86 million in cash and investments.

Lakewood Hospital Foundation:

The letter of intent stated that the City’s beneficial interest in the Lakewood Hospital Foundation was NOT included. However, the 990 of the Lakewood Hospital Foundation now states that the Foundations assets are included in the Cleveland Clinic Foundations financial statements. A neat trick. Does anyone remember a public discussion about the disposition of the assets of the Lakewood Hospital Foundation? Did the City give up its beneficial interest in the Foundation?

$36 million in the Lakewood Hospital Foundation, $86 million in cash and investments, millions more in lost income tax revenue, lost lease payments and real estate giveaways.

Pretty soon you are talking about real money.
Attachments
Foundation 990.pdf
(1.94 MiB) Downloaded 145 times
audited-consolidated-financial-statements-2016-2015-reissued.pdf
(1.07 MiB) Downloaded 123 times
2015_LHA_FinancialStmt.pdf
(225.06 KiB) Downloaded 119 times



Return to “Lakewood General Discussions”

Who is online

Users browsing this forum: No registered users and 35 guests