ACTION 8 UPDATE: Montgomery Mayor Steven Reed explains why he vetoed resolution to help Jackson Hospital

Photo from the City of Montgomery

Action 8 News has received a statement from the Office of Montgomery Mayor Steven Reed to explain why he vetoed a city council resolution offering support for Jackson Hospital.

Here is the mayor’s statement, in its entirety:

“The City of Montgomery remains committed to supporting Jackson Hospital and ensuring that quality healthcare remains accessible for our residents and families.

However, we need the terms of the proposed funding resolution to be amended.

Under the Code of Alabama (§ 22-21-212, § 22-21-293), the responsibility for hospital and indigent care lies with the county. The Montgomery County Commission, under Chairman Doug Singleton, has served as the lead point of contact in this matter. Therefore, we believe it’s appropriate for the County to have the majority stake in any future financing.

For that reason, I am asking that the current terms of the agreement be amended.

The City is prepared to work toward better terms and an amended funding agreement that protects residents and reflects a fair share of responsibility.

Our position is straightforward:

• We are not rejecting support for Jackson Hospital; we are asking that the 60-40 funding split as currently proposed be recalculated to ensure fairness to the citizens of Montgomery and alignment with the County’s statutory responsibilities.
• We are not walking away from the table; we are insisting on a transparent process that clearly defines how public dollars will be used and what services Jackson Hospital will provide in return — including trauma care, indigent care, and other health services.
• We are not ignoring the larger picture. This is both a regional and statewide issue that affects hospitals across central Alabama. A crisis at Jackson would have ripple effects extending to facilities like UAB and other major health systems.

We have been in communication with the Governor’s Office and have not yet seen a written-out commitment from the State regarding any potential state funds to help address this situation. We encourage anyone with questions about the State’s role to contact our local legislative delegation for further clarification.

We will continue discussions with the City Council about what responsible support looks like moving forward.

Our message is clear:

We are not withdrawing support from Jackson Hospital.

We are insisting on accountability, fairness, and partnership — for the good of our residents and the integrity of public resources.”

The city council can override the mayor’s veto with a simple majority vote. The council’s next meeting is Tuesday.

As Action 8 News has reported, a federal bankruptcy judge in Montgomery has approved a loan that officials say will help keep the hospital open through the holiday season. The hospital’s Debtor-In-Possession (DIP) loan was extended from $22 million to $35 million.

Jackson Investment Group announced that it will add an additional $15 million on top of the court approved loan.

The Montgomery County Commission is expected to vote on whether it will contribute money to Jackson Hospital on October 21.

As Action 8 News has reported, the hospital filed for Chapter 11 bankruptcy protection in February. Last year, it missed a $60 million interest payment on bonds. S&P Global said it lowered the hospital’s long-term rating to ‘D’ from ‘CC’ on The Medical Clinic Board of the City of Montgomery’s series 2015 bonds. S&P Global says that it understood that Jackson’s liquidity is very thin and insufficient to meet the bondholders’ demand for full payment.

In February, Jackson Hospital said it experienced significant financial pressures in recent years due to increased labor costs, stagnant reimbursement rates, a challenging payor mix and fallout from COVID-19, among other factors. It said without Medicaid expansion in Alabama, it suffered significant financial losses due to its care for uninsured people. In 2023 alone, the hospital said gross charges related to the care of uninsured patients exceeded $45 million.

Jackson Hospital is licensed for 344 beds, serving Montgomery and the River Region as a community not-for-profit facility. It  opened in 1946 with 37 beds and five doctors.