A consultant aiding in the proposed lease of West Jefferson Medical Center to LCMC Health was switched from a flat fee to an hourly rate for his work on the deal during a Jefferson Parish Council meeting Thursday, bringing the contract in line with a recommendation from the parish’s inspector general. The change was not without controversy, however, with some council members voting against the change and even those who supported it arguing they had already been working on altering the contract when Inspector General David McClintock spoke out against it last week.
The change to Pennsylvania-based financial consultant Josh Nemzoff’s contract was approved 4-2, with council members who have been skeptical of LCMC’s bid supplying the votes necessary to pass it.
Nemzoff will be paid $650 per hour under the amended contract. That means he will have to work about 77 hours per month to get the full $50,000 a month he was guaranteed in the original contract.
The changes to the contract also appear to eliminate a provision that would have capped Nemzoff’s total compensation for his work at $625,000.
Councilmen Elton Lagasse and Ricky Templet, who both objected to Nemzoff’s original selection, voted against the new contract Thursday. Lagasse, Templet and Councilman Chris Roberts, who did not attend Thursday’s meeting, all have been staunch supporters of LCMC’s bid to take over the hospital and have argued that Nemzoff is biased against the nonprofit hospital company.
Templet said Thursday that he has always felt that hiring Nemzoff was unnecessary because Hogan Lovells, the Washington, D.C.-based law firm also aiding in the lease negotiations, has the resources to handle the financial analysis as well.
“I don’t support the whole process,” Templet said. “I didn’t feel he deserved $650 an hour.”
Lagasse echoed concerns that Nemzoff’s hiring represented a duplication of services.
Lovells has two contracts related to the lease negotiations: one for services related to mergers and acquisitions and the other for providing advice on antitrust issues. A total of seven people from the firm will be working on the contract for rates that range from $423 an hour to $885 an hour. That contract also allows Lovells to charge for other expenses related to the contract.
Council members Paul Johnston, Cynthia Lee-Sheng, Mark Spears and Ben Zahn, who have been critical of LCMC and pushed for Nemzoff to be included in the negotiating team, voted in favor of the contract changes.
“Everybody should be good with this amendment because this was suggested by the inspector general,” Zahn said.
Zahn and Spears also expressed dismay that McClintock criticized the original contract, saying they believed he had given it his stamp of approval before it was originally ratified.
The Parish Council met last week to consider the agreement and, after a lengthy closed-door session with McClintock, approved it on a 4-3 vote. Shortly after that meeting, Zahn said, Johnston asked Parish Attorney Deborah Foshee to look into whether the contract could be changed to an hourly rate. Those negotiations resulted in the modified contract approved Thursday.
“We voted on a contract, but we were under the impression that the amendment was going to take place,” Spears said.
The decision to move forward with the agreement last week was made so that it would not hinder the process of leasing West Jefferson. Both Spears and Zahn said they hoped the negotiations would wrap up quickly.
They noted that the council still hopes to find a partner for the parish’s other public hospital, East Jefferson General Hospital.
Both councilmen said that while the contract was improved by the amendment, the original version was not improper.
McClintock declined to discuss what had occurred during the executive session. However, he defended his original critique and said that the proper time to address the issues in the contract would have been before it was signed.
“I don’t think anyone believes that the proper course of conduct is to pass legislation creating a contractual obligation on Wednesday and then go ahead and begin the process of amending it on Thursday,” McClintock said.
Follow Jeff Adelson on Twitter, @jadelson.