The offer from Rim Country Educational Foundation to partner with the town to run a community center has some town elected officials uneasy.
“I’m asking for transparency,” said Mayor Tom Morrissey during an Aug. 29 appearance on the Rim Country Forum radio show. “If you have total transparency and integrity and you have a level playing field, that takes care of 90 percent of the problems and the concerns of the people of this town.”
Morrissey and Councilor Jim Ferris, during his own radio appearance, have had questions about the three key organizations. The lineup includes:
- The MHA Foundation, with some $40 million raised from the merger of the Payson Regional Medical Center with Banner Health Systems in 2014.
- The Rim Country Educational Foundation, which is the higher educational arm of the organization and which has spent some $14 million that came mostly from the MHA Foundation on the university project.
- The Rim Country Educational Alliance separate legal entity (SLE), which governs the 253-acre property bought for university and educational facilities, which could now also accommodate a site for the community center, parks, an aquatic center, a prep school and an ice arena.
Backers of the MHA Foundation say the group has already spent millions on community projects and is now offering Payson a way to build a community center, park and year-round aquatics center. The town doesn’t have the money to undertake the projects on its own, but by helping cover the operating costs, the town could secure the benefits, say MHA Foundation officials.
However, the complexity of the MHA Foundation’s structure, which oversees a slew of different projects and charities, has left some council members leery of the arrangement.
So MHA Foundation President Kenny Evans sat down with the Roundup to thread together the various entities and their histories.
“It all started in 1954,” he said.
In that year, a group of Payson mothers banded together to raise money for a medical clinic in town after the only doctor retired. The group raised enough to set up a medical clinic in 1957. Fundraising drives ultimately helped build the Payson Regional Medical Center in the 1990s, which was owned for years by a group of doctors.
When the hospital ran into financial troubles, the Mogollon Health Alliance paid off some $15 million in debts the owners had accumulated and assumed ownership of the hospital. The Mogollon Health Alliance brought in a national hospital chain to run the hospital.
That worked well until 2014, when Banner Health acquired the hospital, merging with and absorbing the Mogollon Health Alliance in the deal.
Backers set up the MHA Foundation to take over the non-hospital assets and manage the roughly $40 million paid by Banner when it took over the hospital. The merger agreement required the merged nonprofit to invest tens of millions back into health care in Rim Country. The MHA Foundation says it is dedicated to supporting the health and education of Rim Country.
But what does that involve?
For years, Rim Country had dreamed of building a university campus. Realtors from the 1990s remember telling homebuyers, “A university is coming!”
But no university came.
So the MHA Foundation decided to chase that dream.
They had identified a piece of Forest Service property between Mud Springs Road, Highway 260 and Tyler Parkway. After years of negotiations, the towns of Payson and Star Valley created a separate legal entity to purchase and develop the land for health and education purposes.
The formation of the Rim Country Educational Alliance SLE made it possible for the Forest Service to sell the land based on an appraisal, rather than through competitive bids. Investors could also reap important tax advantages due to the creation of the SLE. Finally, the SLE protected Payson from any liability in case the project failed.
“At that point in time, if we didn’t have the SLE, they would have said, ‘Thank you we’re going to go out on open bid,” said Evans. “We needed a structure to do that.”
So Payson and Star Valley created the SLE, which could then partner with the MHA Foundation to develop the property for a university and health and educational purposes.
Gila County was also asked to participate, but “the southern Gila County contingent said, ‘What do we get out of it?’ which ended discussions,” said Evans. “(But) we never terminated those discussions, we just moved on and started conversations between Payson and Star Valley.”
The Mogollon Health Alliance needed another entity to raise money and pay for studies and plans for the property since their purpose was only health care at that time. So community members who were backing the university in Payson formed a community committee — the Rim Country Educational Foundation (RCEF).
After the MHA Foundation was formed in 2014, it assumed the committee’s functions and created RCEF, LLC.
RCEF now raises money to promote higher education and development of the health and educational facility property. It has also signed the checks for the roughly $14 million invested in the development of the 253-acre university site. The money has come mostly from the MHA Foundation, which invested the money it got from Banner. Investment gains have covered most of the costs incurred so far, said MHA Foundation officials.
With RCEF handling the university project, the community committee members set out to find a way to increase the number and lower the costs for Payson students to go to college. That effort evolved into the Aspire Arizona Foundation, which raises money to cover the tuition for dual-enrollment community college classes for Payson High School students. This provides a path for students to graduate with both a high school diploma and associate degree at the same time.
Payson and Star Valley each appoint members to the Alliance (SLE) board. However, Payson and Star Valley both have to choose their representative from a list approved by the private equity firm supplying the funding for the project, which now is the MHA Foundation.
Morrissey said he’s wary of partnering with some other entity to build a community center and other facilities. He also opposed an earlier proposal for the town to partner with backers of a sports academy boarding school, which wanted to develop a community center, swim center and ice rinks in Rumsey Park.
“I want a community center, of course I do — and I want a year-round pool, of course I do,” said Morrissey. “That’s the ends, though, let’s examine the means — how we get there? If we’re contributing to an entity we don’t own, that’s not under the auspices of the town — OK, well, there’s just so much we have to say about it. As opposed to we go to an entity that we own or we have a lot to say about, which is way better.”
Morrissey also has concerns about the limits of Propositions 401 and 402, which he strongly supported as a way to require a vote before the town partnered with any other group to build major projects.
“They prevent us from committing to anything longer than three years,” he said. “That could bring complications to what I have heard so far regarding an agreement.”
MHA Foundation officials say their main goal is to provide a range of recreation facilities and services to the community, with minimal cost to the town and no need for taxpayer-supported bond issues. However, they say they’ll move forward with a plan to build ballfields and other facilities even if the town decides not to partner.
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