Group brings in law firm to address board appointment

Attorney letter states appointee may be seated

MANISTIQUE – Schoolcraft Memorial Hospital may soon have a full slate of trustees for its board. The Pioneer Tribune has learned that the Schoolcraft County Board of Commissioners’ recent failure to approve an appointment to the SMH Board of Trustees – on two separate occasions – prompted action by a group of concerned citizens and businesses.

The appointment of Russell Poole to the SMH Board of Trustees first failed to move forward at the Dec. 27, 2018 commissioner meeting. Then-commissioners Chris Rantanen and Larry Mersnick voted in favor of Poole’s appointment, while commissioners Allan Ott and Craig Reiter voted against his appointment. With the abstention of Dan Hoholik, who works for SMH, the appointment failed to be either confirmed or denied.

Then, at the commissioners Jan. 24, 2019 meeting, newly seated Commissioner John Shiner voted to appoint Poole to the SMH Board of Trustees. However, Corey Barr (also newly seated, Ott, and Reiter, voted against the appointment. Hoholik again abstained.

As a result of the two failed appointments, a group of concerned citizens and businesses retained the services of Honigman LLP, a law firm out of Lansing, Mich., who, in turn, issued the following letter to the Schoolcraft County Board of Commissioners. The letter, which challenges the commissioners’ actions on Dec. 27, 2018, also advises the SMH Board of Trustees to seat Pool immediately.

“Dear commissioners: Our firm has been retained by a group of concerned citizens and businesses with the purpose to continually ensure all local government entities operate within appropriate, legal process and temperament in terms of their statutory fiduciary oversight. One example of such a situation is the Schoolcraft County Board of Commissioners (‘the Board’) authority to disapprove of candidates to the Schoolcraft Memorial Hospital Board of Trustees (‘the

Trustees’). Our client is deeply concerned that petty politics are depriving the Schoolcraft Memorial Hospital of a highly qualified individual to serve on its Board of Trustees.

As you may be aware, Schoolcraft Memorial Hospital is governed by the ‘Municipal Health Facilities Corporations Act’, Public Act 230 of 1987, hereinafter, ‘the Act’. In 2011, the Legislature amended the Act allowing a hospital board to be a self-appointing board ‘with the advice and consent of the county board of commissioners’. The Act does not create a new power of ‘advice and consent’ for the exclusive use of the Act. The phrase ‘advice and consent’ is not defined in the Act. Therefore, the most common use of this power under Michigan law controls. Under Article V, Section 6 of the Michigan Constitution of 1963, the phrase ‘advice and consent’ is welldefined and the process of advice and consent is used on a routine basis.

The manner in which ‘advice and consent’ is used in Michigan is fundamentally different from the process used in the United States Constitution. Under Michigan’s Constitution, ‘advice and consent’ is used only to disapprove an appointment. An affirmative vote of approval is not required; rather, only a majority vote of disapproval can reject an appointee.

The Schoolcraft County Board of Commissioners fulfilled its statutory obligation on Dec. 27, 2018, when the Board met and held a vote on three appointees. The Board did not vote to reject Mr. Russell Poole’s appointment to the Schoolcraft Memorial Hospital Board of Trustees. The Board’s vote was two in favor of appointment; two in favor of rejection and one abstention. The Board required three votes in favor of rejection in order to disapprove of the appointment.

As a result of the Board’s action, it fulfilled its duties and obligations under the Act, Mr. Poole’s appointment was not rejected and therefore he is eligible to be seated as a member of the Trustees immediately.

A county board is not allowed multiple opportunities to provide advice and consent. The Board was not required to act within a certain time frame, but it chose to satisfy its statutory obligation at the Dec. 27, 2018 meeting. To allow a board to continuously subject appointees to the process of advice and consent completely contradicts the independent nature and function of the Trustees. No doubt any court in Michigan would find such action by the Board as ultra vires [acting beyond one’s legal power or authority].

However, if the Board is not satisfied with the performance of any member of the Trustees, the Act provides both the Board and the Trustees the ability to remove a member from office for ‘cause’, which is broadly defined under the Act. Should the Board determine it is warranted to remove Mr. Poole, it may follow the simple procedures under the Act and vote to remove him. The Board may not, however, attempt to provide its advice and consent on subsequent occasions until it receives the political result it is seeking.

Mr. Poole meets the statutory qualifications to serve; has been properly appointed by the Trustees; and has been properly subject to advice and consent of the Board. Therefore, he is eligible to be a member of the Trustees. For the fiscal integrity of this important community and critical access hospital, we advise the hospital to seat him immediately. It is then left to the Board to determine if they will seek to remove him under the Act.”

The letter is signed by Peter B. Ruddell of Honigman LLP.

According to Don Perigo, president of the SMH Board of Trustees, “The letter expressed a concern raised by another group. We continue to fully support our appointee and will comply with the law.”

When contacted by the Pioneer Tribune to provide a comment regarding the letter, commissioners Hoholik, Shiner, and Reiter stated that they had no comment.

Commissioners Barr and Ott did not respond to the request for a comment.

After voting against appointing Poole during the January meeting, Reiter told the Pioneer Tribune that his vote had been based on the fact that he had observed Poole on “several occasions” and thought that he would be “problematic” serving on the SMH Board of Trustees.

Ott said at the time that he based his disapproval of Poole’s appointment on Reiter’s “personal observation”, while Barr said he voted for what he believed was in the “best interest of Schoolcraft County.”

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