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Agency pursues suit against St. Marys
ST. MARYS -- A lawyer representing the St. Marys Hospital Authority says a lawsuit filed Monday against city officials will not be withdrawn despite city council agreeing to a resolution of support later in the day.

Jim Stein said the resolution of support approved by a unanimous vote Monday merely confirms what city officials have said in the past -- that they support the authority spending money from the sale of a nursing home on senior citizen programs.

Stein filed the lawsuit in Camden County Superior Court asking the court to compel the city to sign an agreement supporting the way the authority spends proceeds from the nursing home sale on senior citizen programs.

Stein said he hopes city officials voluntarily agree to petition the court to modify an agreement with the state that would allow the authority to continue spending proceeds from the sale to support senior programs. With no firm commitment, Stein said the lawsuit will remain.

In the lawsuit, Stein says he asked state officials in 2007 for clarification on how the money should be spent because the proceeds came from the sale of a nursing home, not a hospital.

"There was no resolution given by any agency of the state," said Stein in the complaint. "Plaintiff was advised that the attorney general favored opinion of local counsel in the matters of an authority established by local legislation by a political subdivision."

City council members approved a resolution in 2009 in support of the authority's purchase of the property where the city's senior center is located, and later entered into a lease agreement.

According to the lawsuit, city officials were aware state law requires proceeds from the sale of a hospital to be spent on indigent health care, but they entered into a novation, an agreement which established the senior center. Stein said novations are amendments to agreements that can be changed easily.

State Rep. Jason Spencer, who raised the issue with state officials, said he believes he is correct in his interpretation of the law. He believes the $3.6 million in the St. Marys Hospital Authority's bank account should be spent on indigent health care.

Spencer, R-Woodbine, believes state law says the money should be given back to the city, making elected officials responsible for determining who receives the money to pay for medical procedures they cannot afford.

If city officials don't want the responsibility, Spencer said the city council could appoint a new authority to make the decisions about who qualifies for financial aid.

"Everyone wants to speculate about what happens to the money," Spencer said. "The trust would be under the city council. They would still have to follow what the trust says."

Stein said he received an email from city attorney Gary Moore Wednesday saying he will discuss the issue with city officials before making a recommendation.

* Reporter Gordon Jackson writes about Camden County and other local topics. Contact him at or at 464-7655.

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