By Seth Richardson
The wisdom or necessity of the sale of city-owned Memorial Hospital to a private for-profit entity is a local issue subject to local democratic debate and decision making, as is the question of how Colorado Springs can spend the proceeds it might collect from such a sale. Neither are legitimate subjects for regulation or oversight by the state Legislature, according to the Colorado Constitution.
Much of the rhetoric being heard recently about the potential sale is focused on the requirements of the Colorado Hospital Transfer Act (CHTA), a state law enacted in 1998. This law says that the state Attorney General is empowered, among other things, to “ensure that any proceeds of the transaction are dedicated to… charitable purposes,” and he can require that the “proceeds… be set aside in an amount equal to the fair market value of the hospital assets being transferred.” Thus, the CHTA regulates how such money can be spent.
But the CHTA was never intended to interfere with home rule powers of municipalities, says former state Representative and Colorado Springs resident Andy McElhany, who was serving in the Legislature at the time. McElhany says of the CHTA, “Our intent was not to hinder the sale of municipally owned hospitals; the last thing we wanted was to prevent cash-strapped local governments from putting publicly owned assets like Memorial to their best and highest use for their citizen-owners. Rather, the thinking behind the 1998 legislation was to ensure that the sale of any private, nonprofit hospital which, in a sense, belongs to no one did not betray its charitable mission.”
Because the law fails to distinguish between publicly-owned and privately-owned hospitals in imposing this mandate, the law conflicts with the city’s constitutional home rule powers. Colorado Springs is a home rule city, and the decisions of the City Council on purely local matters are not subject to interference by the Legislature. Article XX, Section 6 of the state Constitution says:
“Such charter and the ordinances made pursuant thereto in such matters shall supersede within the territorial limits and other jurisdiction of said city or town any law of the state in conflict therewith… It is the intention of this article to grant and confirm to the people of all municipalities … the full right of self-government in both local and municipal matters.”
One of the most fundamental powers of a municipality under home rule, one that is inherent and inseparable from the power to collect revenue, is the power to determine how those revenues are spent, subject only to the rules of the municipality itself. The power to dispose of city assets is solely vested in the City Council or in the residents of the city, and if the voters of the city decide that it is no longer necessary or desirable to have a city-0wned hospital, that decision is final. Likewise, if the City Council chooses to spend the revenues collected from a sale of the hospital on fixing bridges or potholes, that decision too is not subject to interference by the Attorney General or the Legislature.
While the state Legislature certainly has the power to regulate private hospitals and at least arguably the Attorney General, pursuant to the CHTA, can make regulations and set conditions on how private state-licensed hospitals operate that will protect the public interest in affordable health care, both the decision to sell and the allocation of the proceeds of the sale of hospitals owned by home rule cities is beyond its authority to regulate, and squarely conflicts with the city’s constitutional home rule powers.
The state Supreme Court has said that, “the legislature cannot prohibit the exercise of constitutional home rule powers, regardless of the state interests which may be implicated by the exercise of those powers.”
The violation of the sovereign home rule powers of the City of Colorado Springs found in the Colorado Hospital Transfer Act is something entirely aside from the local question of whether Memorial Hospital should be sold to a private for-profit entity. The City Council must challenge the state’s authority to tell Colorado Springs how to spend it’s own money, if for no other reason than in order preserve the city’s sovereign constitutional powers.
© 2011 Altnews