Montgomery Mayor Steven Reed vetoes city council resolution to help Jackson Hospital
Photo from the City of Montgomery
Action 8 News has confirmed that Montgomery Mayor Steven Reed has vetoed a city council resolution aimed at helping Jackson Hospital keep its doors open as it struggles through bankruptcy.
Montgomery City Clerk Brenda Blalock said that she has received the mayor’s veto in her office.
It will now be up to city council whether to override the veto. That is expected to be on the agenda at Tuesday’s Montgomery City Council meeting.
Blalock says it only requires a majority vote to override the mayor’s veto.
READ: Statement from Montgomery Mayor Steven Reed on why he vetoed the city council resolution
The city council had previously voted unanimously to provide help to Jackson Hospital, while calling on other government entities to do the same.
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.
