Apr 19, 2011|
Garland talks with State Treasure, John Kennedy. What happens if we don't get funding for the University Medical Complex and we build it anyway?
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Automatically Generated Transcript (may not be 100% accurate)
Miller WWL first news. The station that keeps you in touch all day every day the big news talk in sports leader. The big 871053. WWL have a well -- come. Sports leader. Bridge -- seventy WW. WWL -- -- and 1053. I should go to climb inside Garland thing. Or 260187. Or 66889. -- seventy. It's Garland. Or maybe if you miss it I think we have pretty good completion for the first couple hours. -- -- We've we keep hearing over and over gas prices coupon -- very quickly come numbers slowly. We're posting an Associated Press story. The -- search by a couple of months for a couple months under energy writer. Jonathan -- In the article was from mortuary for this year. In my head Jonathan on the show. To corroborate my understanding of what you've written pretty complicated. But. If I can understand you can understand it. The bottom line is we -- two hours. And saw no room suggested. Evidence whatsoever. To change my way of thinking. That changed when I read -- Associated Press article. That we're not being ripped off. It's not the oil company. And they all our primary. Mom and pop gas stations. And no holds sailors being willing. Circle K the owner on the wounds -- have franchise's all over the country. And there are valid reason. Why the -- screws -- very quickly ended Dutch. And it takes a while to come down. So. Room -- moments and we'll move on tour around. -- subject for this hour. And it is via academic medical complex. University medical center. To be due to New Orleans one point two billion dollar. And price tag gone. And I got to -- in the beginning. That I I won't happen that's what I have to. I'm not -- -- is a good idea. When I look at the concerns over the financing. Because I I don't understand that kind of stuff. So we've talked to John Kennedy state treasurer who are police who understands the money. And the bond side haven't. We've requested that the -- joining us and you couldn't. And we've requested. -- somebody that would obviously be. I'm very much in favor of this project the chairman of the board. Robert Bob you Barbara. He was cited today you couldn't. Meet with the only here by a phone for city like try to literally we'll certainly do that. Let me tell you why I think I'm in favor. But -- -- on this when it's ready to be changed because it's complicated. And I don't think I have very. A good handle on exactly what it all means. Got a lot of respect for -- income Michael Hecht. This is an organization that can be used to be. -- -- really sure what they do it. But it changes Michael Hecht and you know -- people. Ever elicited out of the legislature. These companies that have been instrumental in bringing here. Been very impressed with and he. Thinks this is a great project and should go port so. Based on that -- board but. With the big big qualifier -- I don't have the how we -- bones. Will lose one point two billion. Will that be -- Or will be like the doom. Like the convention sooner than it cost a lot more than what we initially thought. All of that grew into coming to a conclusion. -- bring in John Kennedy and take your calls you can text. -- -- -- -- -- -- Academic medical system -- -- And conflicts rather. University medical center think they're calling it you wouldn't see. Proposed to rebuild. Pro -- one point two billion dollars of 444. Bed hospital here in downtown New Orleans moves through via. Playing who's been expropriated. In houses and buildings in -- newly labeled political level rather. In preparation for the construction. And we've requested. The merriment. Mitch Lander to commend you glued to do -- you do do it. We requests to be chairman of the board of UNC and Robert Bobby your -- commune. Who do too busy you try to -- later they're. So also -- talk about them financially and of the bonding and government. Because right now we don't have enough money to do our -- bill proving your opinion poll. Ask your question the state claims they can build one point two billion dollar teaching hospital in New Orleans without having all the money. Isn't worth the gamble. 54% of you say yes. A 40% 46% no good John Kennedy where there -- state treasurer John thank you for joining me. Thank you tread on me off I just got the basic questions. From me from. Blue collar Menem's free. -- point of view and I don't have the expertise and going to pitch is scooter bet on my quiet for June election. So I'm I'm. I'm tending towards okay sounds like a good idea on the other side and I'm told that we have. Not enough money and we got to go back to hugged. In order to get it or. Formed some bonds. And we may not be able to do that. A nurtured from correct on that and haven't. But -- so that gives me pause as to whether -- we should should do. Give me an idea of where we are with this project. The will you see it right now. There is consensus. That we need a teaching hospital. In new mortgage. There is not a consensus. At least in the capital market. About the facts. The governor has proposed building a 420. Be at a hospital. One point two billion dollar cash meaning that we would have to borrow. Depending upon the final cost of the project between 500000000 and 800 million dollars. That's what they broke ground born yesterday. I think unbeknownst to. The administration. -- -- somehow the times Picayune got a copy of the administration. Economic analysis of the 444. Bit hospital. The analysis was done. By back Coughlin hall & Associates. And there was an article in the Picayune yesterday and basically the Kaufman hall on associates. Analysis appears to say. That if they be older we build a one point 2000000420. They had four -- hospital won't go broke. And that's certainly not going to help. Beating the finance and port. Coffman direct comedians say 332. Bit hospital which is about a twenty. 20% reduction and -- And the point they make in the in the article. I think senator -- made this point last week currently. We have two point 83 -- ads for every 1000 people in the New Orleans metropolitan area. The national average is two point seven. So right now we have more bids from the national aperture. If we build a 424. -- hospital. And if the forty bed hospital and shall maps is built. Our ratio will rise to repay its. -- 1000 rushed and if we build a hospital by eighty bed hospital. In in New Orleans leash will go even higher. And at the the administration's consultants have raised. The issue and it's a very fair well a question about if we have that -- the extra base is it's. It can be -- Camden new hospital at this sad to be able to pay its debts and they concluded cannot. Hum and -- -- my memory bank superdome. Conventions and I seem to remember superdome in particular starting often when it was 5060 million. And then they're doubling and tripling. And in there was I think the same concern over. Where they know we're gonna get the money and in this thing is gonna breakers. It is that the way the superdome went down. Where do we haven't funded when we came up with that and did we run into -- money problems. Well that would that was a little before my time. Pity you'll always running into. Problems with cost of construction. And that that's why I would recommend it if you say it's gonna cost one point two billion. Figuring in construction inflation and the cost equipping it -- you've got to figure on it coming in higher than that. So I don't assume since you've got built they were able to upload whatever bonds immediately -- desperate. So anything with the conventions and in the end and -- here. Is maybe. They won't be able to sell the -- Everett. That's correct don't -- and that which is why of course that lived in new board is seeking. A federal guarantee and I and my personal opinion is -- no great pleasure in saying mr. But in my personal opinion if you went to the bond market today. Practically after. This new study. Which was ordered by the border directory and the governor. Has come out and said we won't steal or borrow money 424. -- I do not believe you'd be able to borrow the money in an acceptable when interest -- when your own consultants say. You project what Mike. Okay. It wouldn't going when we look at all of that. If what I mean they've they've done -- the -- Schobel already if they started but the construction because they've got what 700 million. Political -- they start with 700 million. It's in and they can't sell the bonds we can't get hug to our guarantee the insurance. Don't they just build a small complex. And how does that work do you you'll just stop construction during. Well. I don't know I know. I can only I can't predict what they will do but I can predict that or make a bold statement about a rational approach. If you do not have the money to build 444. -- edge. And even if you give and the money to build 424 bitch. And your consulting your own consultant questions whether the project. Can be solvent it would seem to made it did you have. Only one option and that he is skewed to build a case sad as that won't catch -- now how do you do that it changed in and I predict to you that's what will happen is that -- the new board they're very very good people. Who were going to be running this thing they're very good business people I predicted they would do -- -- can -- -- their leader Billy smaller hospital. And if it works better than than they consultants say they can handle later or they won't she used to rehab the old -- It changed amazed at those surveyor there are realistically. They're to each question that. What this is election year I understand all that nation's politics involved here but I think we need to be straight with the people wishing and the people who owns and tell him that. The hospital boards don't consultant and I read it says BP build a 444. Bit hospital. It'll go broke. And MRSA in the console controller right -- wrong. I haven't even finished read the report I've just read enough to know what they say that they are the states don't consultants and we. We hired him to give mr. frank advice and you have to mission to the and I can assure you that by now. Given the fact that the -- speaking and got a copy of this report. And they published it cartoonish in I'm not saying they shouldn't have -- -- that pot bat but I think it was a surprise to everybody. I can assure you that the capital markets are people who loaned the money to institutional investors. They have already gotten a copy to report Brett. Did this a question that was asked me yesterday by. One of the employees here. As she should get a Garland YouTube you -- decision every day via uptown you'll see the blight. It's still there after secures. She's done from the direction she confront. And she's set I just look at this and I say you don't. Why not Alabama why not -- and why can't we. Do what they do. Even look back Kennedy had tons peculiar sort of beckoned September. And the the people who are behind this project the board members were saying that. You know it's even going to be better and Alabama can do better than Houston because the technology. We're gonna employee is much better than what they've got their fallen behind. Why is it that we can't seem to. Do what it takes to compete. In particular would -- those who -- mobile Houston. I think we can. I think we can't. But you have to do that by building a viable project. And and what I'm suggesting to you we just that he pure consultants say. 424. Bits more work you can only cash or what with 332. Bit edged. That you have to notion that the worst thing we can do if we wanna build a world class academic medical center is built something bit. Cash flow that we can't -- -- and then will go broke. That would set us even -- Baja. My feeling is if he's -- do it in Birmingham can do it we can do that. But the numbers of the numbers. You have to be realistic. This is taxpayer money we're spending. And we have to be realistic and be careful to build something. That we can painful. Here's John. I've talked to have to so many people here with studies and polls are not always seem to know so many conflicting ones. How to unknown which -- write -- they always filming will follow the money when -- symptom of the seventeenth 2010. University medical center board lose ground work for bond sales here's what JPMorgan their consultants said. A charity hospital. Strong position to -- federal government. Backing borrowed money a battery of consultants and studies said fairly likely the project can win approval. They suggested that -- the board should borrow additional money. Operating reserves when the outspoken person opens. They said they could submit an application as early as February 15 the rear ended by saying our conclusion is. If you build it -- welcome. No we've got another one that says. Or control there well brutal -- years that the guy on the street believe. I am not actually give you my personal opinion normally when you deal project like this -- -- hospital or toll rude or. Our conditions and are martian program. While believe you do is go out and had the very best -- you can't do a market analysis. And and tell you what you can afford to build an application quote. -- they are they always right now can they predict the future no they clairvoyant you know eight. Do they usually tell you what we're here because you -- Only keep if you get to -- the right one they tell you the truth and that's what you pay for you don't pay. For somebody to tell -- which won't hear. You pay for the trip. Now. This recent the recent change of all this is that the entity that the state is paying forward doubles the truth. The cost on call & Associates firm sense. Apparently to me anyway may be other treated differently. That a 424. Bed hospital will go broke up. You need a 3-D need to start with a 332. Bit harsh but. I know that is news that some do not want to hear. But it's also vision in my opinion. On that did it on behalf of taxpayers and and the stage if you can't ignore. John got to take a break from news can hold you -- mormons -- -- one more question chirp. Coming right back John Kennedy's state treasurer. On the line we're debating the city claims they can build a one point two billion -- teaching hospital in New Orleans without having all the money in hand. Is it worth the gamble we'll tell you what you say Iraq and it took -- This talk and sports leader the big 871053. WW LF and WWL. Dot com. Welcome back. We're still debating the medical complex legislated. To come here in new Orleans city dug through the first Schobel. Yesterday in the opening of the project. It's 420. Plus -- hospital center one point two million a billion dollars. And they don't have all the money they could be anywhere from 500 million to 800 million short. And we're being told the governor and I think the mayor agrees. Not to worry we're -- and shorted and we won't get a phone Motorola board do whatever it takes. To get the money -- got John Kennedy will meet state treasurer. Just ask him about the financial side of it John that's part of one more to make sure understood. Unsolicited abortive UNC. Which they really do have the power do they not it's not -- shoots not and two and in -- mode -- okay and but their relatively new. Right. Okay. If they say you were gonna go -- should start and they get -- halfway through recorded through whatever and they see. The bonds only going to be sold economy gets words whatever it is they could stop at 300 beds or whatever. Still have a viable unit and still go -- can do and what do you plan on doing if and -- the bond market. The financial institutions. Give more healthy and MMR wrong did I misunderstand that. No I think that could be done I'm not a contract urban architect born architect put but TT didn't get too far into the project. It's seems to me that you could be changed or person changed scope. Can you think of the new projects around the state. That have started out like this were it was a pretty big ticket item. They had an Oakland gets sorted perhaps get. A good and and and good we good part of the way through it. But not enough to finish off but. They were able to get the money in the project -- It's not one of -- but it's not unusual or just started projects like starting a home and end. And you know assuming you don't don't get too far on the you BP you know you wanna have. This feature that they turn that feature and and UT can't afford it so you get to cut back on the amount attached. On the is this something that have to be approved by Indian Ocean or anybody else in the city where there is at least they chance. -- inducing -- gonna crumble. Did have to get it through taxes through rush right. No it is and that's part of the the issue that this project. If they bought the money they meaning the board -- the money to full faith and credit to the state will not leave behind -- -- can't be good. Because of our debt limit so technically. -- -- plate in the credit to the states not they -- in the state wouldn't have to pay at the -- -- now practically. Is sustainable widget and I don't know now it's. It's teaching hospital to default on -- bonds of course not. He raised supporter unit is an excellent point eat eat eat I'll be happy -- these consultants you know who do you believe and who do -- not -- there's one way. To determine. What we ought to do the and that history to listen to the markets. And if the board. Goes out and says okay we're gonna go forward and we're gonna bill 424. -- and it will work. We want you to -- and we want to loan us the money and they issued that they try to sell the bonds these institutional investors they'll give an answer very quickly. The market well we'll tell you the -- the bonds leave yourself but they won't show -- Even know JPMorgan. Back last year in September of last year. When they say they thought they could win approval they also pointed out that only about a quarter of the institutions that even apply. For the side programs and end who owns one approval is that correct. Yes the FHA to 42 programs what you're talking about it's a loan guarantee by the federal government. If we get that loan guarantee we can sell these box. Because people won't use the money you know -- our project doesn't work. They can turn to the federal taxpayers the federal government and and they'll pay -- off. But the real test of the viability of -- 424. Bit hospital used to go into the market with your business plan. Without any guarantee each inside of a market where we think we got a good project. Do you agree and will you loan us the money. You get an answer very quickly Italy to be yes -- not. A couple of questions I have been reading reading about the reading this report fear -- called -- whole report and served at a slower population growth in the surrounding region. Is being projected. They do say though that Louisiana positions can steer. 615680. New ensure patients commercial or Medicare. Rather than the 2200 the university project has projected. And Kaufman points out this. Would require a cultural change what does that mean do you have any idea. Well -- looked as good as it as act can't speak for cost money and Bennett a former. And resident of new war one should you know -- proud resident who launched a missile city currently. I think what they mean he has that in order for the new hospital to cash flow the -- Faculty members who have private practices have to convince. They're page managed to go to the new hospital. Are there the rehab hospital whatever he won't call as opposed to going to other hospitals in the area and I think part of the way. That does the state financial cash -- this is by getting the faculty members. The right now or not apparently are not referring to patients to referred him to a into the new hospital. That's not the only. -- but that is one of the what's. And I think there's a cultural they're talking about is this cultural hub of not sending your patience to charities are supposed to Toro or Asia upper west ship rock. When when they mentioned again in the Saudi basing this on not basing this rather on the health care changes that are not gonna click into what 2014. And thirteen. You've got Paul Ryan I had a Budget Committee and in congress. Saying. That would their new brand could trillion from the budget they wanna give a voucher to the states for Medicaid and -- which is lump sum of money here though this is that if you wanna spend more have vetted but that's all you're getting. If we built the hospital. And was actually working would mean that kind of slam the finances. Also. -- I assume what what. Chairman -- is proposing. He doesn't say this but I assume that they're planning on saving money that bad doing -- -- they're gonna give -- Medicaid money to the states. And if we have let's -- quit Medicaid money -- will have fewer people Medicaid and that means they'll be fewer paying patients certainly paying to Medicaid. Going not only -- the new hospital two other hospital. But having said that. There's a way to make this project work and build a world class medical center in new war which. That should be our objective I believe that he is our objective. But before we go down that road we have to make certain. -- properly sash and it will cash flow and stay -- Because of the worst thing we can do for our city and our state is to build a project that goes bankrupt. And we've got a -- That -- -- by. Then that ended when you say you of course -- American default on bonds if it was going bankrupt Gordon when the legislature. Have to too good to have to. Come in and substitute some other phones from broad one kid into prevention. But in my opinion I don't speak for the legislature but in my opinion they would not allow the bonds to a pulp. They would come in and pay off the -- but they would have to spend that money somewhere which would likely come. From. University buildings or roads or bridges or whatever other infrastructure projects -- John Kennedy always a pleasure and always learn something I appreciate the call very much thank you golf John Kennedy largely treasure them right back. Right Beckham's new with the ever get about the key music. Jimmy Buffett's Margaret -- bill what that means news. And WWL AM have -- dot com V news talking sports -- 504260187. To your 866889. Always seventy. All right we're debating. Whether or not to love filled the big medical center here in New Orleans. So on the field we shouldn't from the -- we don't. Both Oregon and event. We spent two hours I thought in pretty good conversation. About doughboy -- pumped with the gas prices -- together on or so why. And these stay there. Pursue a short time -- -- reproduce the -- very quickly takes a long time for income down I think we've answered that. And to make sure that you understand if you want to get him governor bill dot com. Coach -- down on our web site do you see my picture click on the picture. You see a number of blue line it's more of them says. Article wire gas prices so why. -- based on hold -- -- -- owners series too reports there were -- by Associated Press. Energy reported spent a couple of months putting them together and if you would like to get educated on don't mean you can believe it. But I think it gives you information that you probably weren't aware -- now. -- two won't scroll back up the web site WW on the outcome. And I would get on our WOBO. Prodi opinion don't. Bridges. Who's your claims they can build one point two billion dollar teaching school in -- Without having all the money is worth the gamble. 54%. Of you think we should let's go to -- everybody your thoughts. Well -- might be a fly in the ointment but I just thought I'd throw it out there either via years ago. And thought and prior to Katrina. University hospital had and sent. Contract agreement to east -- percent of hospital. And the look cardiology patients that. University hospital couldn't handle. -- know who -- -- war on now Medicaid Medicare. Now you know. -- job they've been having some financial problems. So depending on how this turns out they may have a whole lot more financial problems at this stage gonna take the patient's problem. It's. You know that's that's that's one of the big questions it's. Putting you mentioned that I'm looking for the U and I think two gentlemen sits on the board did -- women try to pundits name. Around me. I shouldn't say this because I'm not totally sure but I think my memory serves me correctly it's David poker. So much of the -- of on the UNC board. What he's says it is. He raised questions about how the consultant can project the effects. Of a federal health care. All I know the federal can of beer or. You know the what they always called obamacare. There won't be fully implemented in -- -- fourteen at purely. He was reacting to projections. Of the new hospital growing patient from other facilities. To torture talking about it. He said it seems he's -- -- saying it seemed like would be robbing Peter payroll all year the boats at auction -- Children's Hospital. -- -- decision oops there -- another patient. They're going to compete. So that's kind of what -- saying. Then there's still going to be competition if you build. A hospital 400 to a report bends. You're. Latest. Consultants. For the board. So they actually. Only this -- only Warren 332. Britons. If -- consultant right. And you've got over a hundred goods served lunch. He's going to be in some heavy competition and I think it's is valid through as a point of do we rob Peter to pay Paul at that point and don't get me wrong I think. I'm in favor of it and that I wanted. Because I'd love to be like. Birmingham Madeleine going to be like Houston accretive to be. A huge growth potential like -- Andrews says probably know the superdome. Or -- convention center. The powers would be those who have the knowledge -- just -- -- -- Can we get the financial backing for it. We need to. Jazz Fest tickets. In the meantime have a great night new member of in my view that I did the thing.