The Observation Deck

Intellectually-Sound and Quantitatively-Defensible

For Mr. O'Bryan and Mr. Alaimo, here is a Summary Table that estimates just how much the City of Lakewood lost when it liquidated, closed and demolished Lakewood Hospital.

The Range of Loss is between $175,000,000 and $200,000,000.

Thanks, Mark.
That's a nice number to have around when discussing the deal with people complicit with the City Hall account. And as the next local election approaches. Your work and diligence is greatly appreciated by all, including those who don't know about it yet.

Attention City Council: are $175-200 million in unexplained losses enough to request an investigation?

Next I'd like to know where the $175-200 million went, and not just which intermediary laundered it, but that won't be in any documents and I'm sure there's not much appetite for that knowledge.

Dan Alaimo wrote:Thanks, Mark.
Attention City Council: are $175-200 million in unexplained losses enough to request an investigation?

Dan

Perhaps outside of the City outright lying, misrepresenting, and even intimidating residents in an effort to control and shut down discussion and a very legal attempt to get the facts, the next most disappointing fact is that Lakewood City Council has become a part of the cover-up. At anytime City Council or a couple members could have worked to shed light on the documents, many are city documents they are legally allowed to view in their position. NOTHING

Members of City Council that know the lies and the bullshit behind the scenes from improper hirings, to running election campaigns from the Mayor's office all illegal, NOTHING. Even a change in City Council with 4 members stating they were running on honesty, transparency and accountability, NOTHING. They get sucked into the grand conspiracy, and become complicit with their silence and their complete stance against residents simply having a right to know what City Hall is doing.

With Lakewood worst Mayor, fulfilling his dreams of privatizing over $200 million in public funds to private hands. WE must start to look upon all of this as a dark stain, and low point in Lakewood, and Lakewood politics.

I only know of one, that stood with residents in an effort to break the secret meetings, and try to shed light on what is going on.

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The Christmas Miracle of December 2015

Lawyers and accountants worked their inexplicable Grinch-like magic.

Once again, we witness the serious shortcomings of public fund accounting. The City makes its definitive exit (December 21, 2015) from the business of providing hospital-based healthcare, however, the actual financial value of that business is never reported on its books.

Only the incoming revenue and assets get reported, thus providing a false picture of the true scale of the massive losses ($175M to $200M).

I have now spent two years writing about questionable or improper financial misrepresentations by the city administration. The record is complete.

We have witnessed a legal and accounting sleight-of-hand whereby the business value of the City's own award-winning community hospital completely vanishes in the wind-down accounting of the disappearing Lakewood Hospital Association. Folks, this is accounting for a public hospital, that the public can never see.

As I have written elsewhere, we see the same problem with the $274,000,000 off-book liability for the federal mandate for sewer/storm-water infrastructure upgrade.

On any given day, the financial position of the City of Lakewood might be "off" by a couple of hundred million dollars.

Aren't We Just Borrowing From Peter To Pay Paul?

This table compares the new debt and debt refinancing for the City of Lakewood against the public subsidies to the developer and the lost hospital revenues through 2026.

We can see that the so-called "investment" with the developer is funded via lost assets and lost revenues that taxpayers will cover with future bonded indebtedness.

I compiled these from the City Council agenda materials for last night's meeting that also included a major 5-year increase in water/sewer rates.

"We can see that the so-called "investment" with the developer is funded via lost assets and lost revenues that taxpayers will cover with future bonded indebtedness."

Obviously, this future bonded indebtedness has other purposes than the One Lakewood Place redevelopment project, but the table makes clear that lost revenues and lost assets could have been used in ways that would not have required the City to take on as much debt.

Can anyone report on the gross value of the water/sewer rate increases? How much is being raised in total?

This week's Lakewood Observer reports that the cost estimated for the City of Lakewood's unfunded federal mandate for sewer/storm-water infrastructure upgrades is $300,000,000.

As noted by Huron Business Advisory, the City of Lakewood could have used an independent brokerage to sell Lakewood Hospital.

Instead civic leaders blew-up a $200,000,000 business and dissipated all of its value to others, leaving the City of Lakewood with spare change--enough to demolish its own asset.

A Few More Public Documents To Consider

The next two documents will illustrate how Lakewood Hospital Foundation (and its funds) were separated from supporting our public and community hospital.

They also demonstrate the planning that not only would separate these funds from the support of the hospital, but also the planning for the future transfer of other assets (funds) from the transaction to close the hospital into that foundation.

Yes, the plan was for Lakewood Hospital Foundation to control the new wellness foundation.

The Hospital Foundation Funds Have Now Been Regionalized

The Lakewood Hospital Foundation reorganized itself as the Three Arches Foundation and in their mission statement (attached) we can see that it now has a more regional focus.

Had it been successful in its efforts to absorb the funding for the new Healthy Lakewood Foundation it is likely that those funds would have been dedicated to broader purposes beyond the Lakewood community.

An Interesting (and rather ironic) question is how well it has served its "neighbors" in the recent past. (see below, "Respect").

Just drive by Detroit and Belle for the answer to that question. Rather abysmally in my opinion.

Mark Kindt wrote:The Hospital Foundation Funds Have Now Been Regionalized

The Lakewood Hospital Foundation reorganized itself as the Three Arches Foundation and in their mission statement (attached) we can see that it now has a more regional focus.

Had it been successful in its efforts to absorb the funding for the new Healthy Lakewood Foundation it is likely that those funds would have been dedicated to broader purposes beyond the Lakewood community.

An Interesting (and rather ironic) question is how well it has served its "neighbors" in the recent past. (see below, "Respect").

Just drive by Detroit and Belle for the answer to that question. Rather abysmally in my opinion.

Vision, Mission and Values — Three Arches Foundation 2.jpg

Mark

They have been upfront about this from before they announced the hospital closing.

The playerzzzzzz, openly pondered about a "Cleveland Foundation for Lakewood and surrounding areas..." as far vack as 2008. When I spoke with Ken Haber he made it clear the new foundation would have a regional agenda.

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Jim O'Bryan wrote:

Mark Kindt wrote:The Hospital Foundation Funds Have Now Been Regionalized

The Lakewood Hospital Foundation reorganized itself as the Three Arches Foundation and in their mission statement (attached) we can see that it now has a more regional focus.

Had it been successful in its efforts to absorb the funding for the new Healthy Lakewood Foundation it is likely that those funds would have been dedicated to broader purposes beyond the Lakewood community.

An Interesting (and rather ironic) question is how well it has served its "neighbors" in the recent past. (see below, "Respect").

Just drive by Detroit and Belle for the answer to that question. Rather abysmally in my opinion.

Vision, Mission and Values — Three Arches Foundation 2.jpg

Mark
They have been upfront about this from before they announced the hospital closing. The playerzzzzzz, openly pondered about a "Cleveland Foundation for Lakewood and surrounding areas..." as far back as 2008. When I spoke with Ken Haber he made it clear the new foundation would have a regional agenda.

Because Ken Haber? Who dat? What is his motive, and how is he the decider?

Regionalization is Only Dilution For Lakewood

For Lakewood, the civic leadership selected regionalization for acute hospital care, charitable uses of former LHF funds, and high-quality/quantity jobs in healthcare.

GEE! Thanks for that.

All sold with the myth that we would become "the healthiest city in America" under "a new model of healthcare".

In the context of my previous essay "The Road Not Taken", Lakewood Hospital Foundation had enough funds in 2014 to support the major upgrades proposed by Metro Health System that would have maintained a renovated Lakewood Hospital. That Foundation elected to abandon its mission and support the closing of the hospital under a proposal that had "no material benefit to the community."

The charity care and economic stimulus from retaining our hospital vastly outweighs anything that Three Arches Foundation can ever do for the surrounding community.

See also, my short posts here on the moral consequences of economic development.

Bad Government, Terrible Government, No Government

Here we see the epitome of what is wrong with the city administration and why Lakewood is ripe for municipal reform with a new ethics commission.

In this document, we see Subsidium (the consultant for the Lakewood Hospital Association) advising the lawyers for the City of Lakewood that the plan under consideration is to move proceeds from the liquidation of Lakewood Hospital to the Lakewood Hospital Foundation in a second deal after the hospital is closed.

These funds are from the dissolution/liquidation of the City's publicly-owned hospital. These proceeds are public assets/funds being guided by private hands into other private hands in a conflict-ridden process that was conducted outside the norms of Ohio public contract law.

None of which has any transparency to the public footing the bill and suffering the loss in revenue, charity-care, acute-care hospital services, highly-skilled jobs, and all of the other economic and financial benefits from having a hospital in our City.

But now, for some reason, the City needs $40,000,000 in new debt to function (in addition to the new water/sewer 5-year rate increases.)

Two Teams of Attorneys and Two Years of Litigation

It took two years of litigation, two teams of attorneys, and two court orders just so that the public could see this little comment box that reveals so much.

It also took the dogged persistence of lawyer Brian Essi. Despite the City's delusive claims of victory, the litigation still drags on.

The city administration made the strategic decision not to comply with the Ohio public records law, because they understood that the public documents would show almost endless conflicts-of-interest and a completely flawed process that would more than justify public interest litigation.

Sometime between the announcement of the Letter of Intent (January 2015) and Subsidium's April 6, 2015 email, the wheels had begun to fall off the wagon as the public began to ask the hard questions and the board members of the Lakewood Hospital Foundation understood that their participation was not viable or was otherwise problematic.

They Had Secret Plans Under Their Secret Plans

"We will likely establish a new community wellness foundation separate from LHF (and then potentially merge them sometime after this initial transaction)."

Folks, here we can see that the planning was even "scummier" than we ever thought possible.

The leadership of Lakewood Hospital Foundation was instrumental in the plan to close and liquidate the funds from Lakewood Hospital and, on top of that, they had plans to walk-off with millions-upon-millions of dollars in those liquidated funds in a second deal after the hospital closed.

Keep in mind that Lakewood Hospital Foundation successfully bowed-out of the Master Agreement consistent with this planning and, subsequently, as the Three Arches Foundation proposed to the Foundation Planning Task Force that the New Foundation be merged with it.

Only time will tell.