City may use funds from Landmark fine to buy new fire truck

Medical center paid the city $500K in 2017 for improperly converting to a nonprofit status

WOONSOCKET — The city’s share of a $1 million fine paid by the owners of Landmark Medical Center in 2017 for improperly converting to nonprofit status may help pay the bill for the Woonsocket Fire Department’s next engine.

In a briefing for the City Council on March 3, Mayor Lisa Baldelli-Hunt and Fire Chief Paul Shatraw told the panel they’re exploring a number of options for paying for the vehicle, a 2021 Spartan engine that carries a price tag of $513,000.

In a move that was hotly contested by the city, Prime Healthcare of California – the owners of LMC and the Rehabilitation Hospital of Rhode Island in North Smithfield – abruptly converted the holdings to nonprofit status after promising the Rhode Island Department of Health that they would operate as tax-paying, for-profit healthcare facilities when Prime acquired them in 2013. As a result of the switchover, the city lost about $1.6 million in annual tax revenue.

In 2017, Prime signed a consent accord with RIDOH, accepting a fine of $1 million to be split evenly between the state and the city for converting to nonprofit status without permission.

During the briefing, Baldelli-Hunt said the city still has about half of its share of the fine left that could be put toward the new Spartan. The mayor told the council the city has wide latitude to use the funds “for the greater good of the residents of the city.”

“This would qualify,” she said.

The city is looking at an assortment of other sources to make up the balance, including Community Development Block Grant funds, which have been used to purchase

two new rescue squads since 2018. The CARES Act – the first federal economic stimulus package passed by Congress to provide individuals and state and local governments with pandemic relief funds – is another potential source of revenue for the new truck, Baldelli-Hunt said.

Councilors don’t seem particularly worried about finding some mix of revenue streams to finance the truck, which Shatraw said will take the Brandon, South Dakota manufacturer 1012 months to deliver once it’s ordered. Shatraw said the city is locked into the price so long as it places the order before April 15, at which point the company would seek to renegotiate.

The city wouldn’t have to pay for the vehicle until it’s delivered.

“We wouldn’t be writing a check until probably December,” said Councilman James Cournoyer. “Certainly between now and June we should have some clarity in the budget as to where the funds are coming from.”

Shatraw said the vehicle will replace WFD Engine 8, a 2002 Spartan plagued by rot and weld issues that’s “becoming extremely problematic.” With nearly two decades in service and almost 200,000 miles on the odometer, it’s already exceeded the typical life expectancy of a fire engine by at least four years.

Not long ago, Shatraw said the hanger bracket for the fuel tank broke and the whole assembly had to be replaced. The vehicle is presently classified as a piece of reserve equipment.

“This vehicle is certainly in need of replacement,” Shatraw said. “It’s given 19 years of good service, but it’s time to rotate it out.”

City councilors gave the administration the green light to place the order for the vehicle, but the panel will eventually have to pass a formal measure legislatively.