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Clearwater County Board meets Tuesday to air sale of hospital, clinic in Bagley

Clearwater County's board of commissioners meets Tuesday to discuss the scheduled completion Friday of the sale of the county's hospital and clinic in Bagley, Minn., to a Grand Forks medical services company.

The sale, begun two years ago with a contract for deed with Cocoon Holdings and Monarch Management, is supposed to be paid off Friday with a balloon payment of $2.2 million plus paying off remaining debt that could be from $1.1 million to $1.5 million, said sources familiar with the deal.

Employees of Clearwater Health Service have voiced concern about the deal. In public meetings and newspaper articles, nurses and the former administrator have said they doubt Cocoon Holdings and Monarch have the financial resources to adequately operate CHS.

Cocoon and Monarch are associated with, and apparently owned by principals who started Aurora Medical Park in Grand Forks, mostly Drs. Thomas Peterson and Mark Peterson, brothers who practice at Aurora's medical park on the south end of Grand Forks. Dr. Tom Peterson has not returned several calls to the Herald.

Earlier promises by Monarch and Cocoon to show earnest money to the county this fall were not kept, and county officials should "exercise more due diligence" in determining if CHS is going into good hands, said Jon Brovold, fired this fall by Monarch as manager of CHS after nearly three years on the job, first under Meritcare of Fargo.

County Commissioner Duane Hayes said while there have been questions raised about whether Cocoon will come through, the deadline is Friday, and it would be premature to react before that date.

County Commissioner John Nelson declined to talk to a Herald reporter about the sale. But he wrote a letter to the Herald and sent a similar letter to CHS employees recently, reacting to a recent Herald article about the sale.

During the two years under Monarch Management, under the terms of the contract for deed due Friday, the numbers of health care providers and services have been increased, and some of the debt owed the county has been paid down, Nelson said in his letter to employees.

Brovold said that's true, but news about the financial performance in recent months hasn't been forthcoming, leading him to wonder if the debt is growing again and if Monarch will seek to renegotiate the deal rather than pay up.

Hayes said that whatever happens Friday, CHS doors won't close, and other options will be sought.

Brovold said Sanford Health has notified the county it will do whatever it can to assist the county after Friday if the deal falls through.

Nurses have told the Herald they are concerned about terms of their employment under the new owners, even whether they will have health insurance.

Employees have been told little, they said, except that once the deal is final, every employee will be terminated and will then have to reapply for a job.

The county board will meet at 9 a.m. Tuesday in the courthouse, with a discussion of CHS slated for 11 p.m. At 1 p.m., the board of CHS, which includes all five county commissioners, is slated to meet. After that meeting, the county commission will re-convene to discuss CHS again, a meeting scheduled to begin at 2 p.m., Tuesday.

"The boards are mindful of the employees' concerns, especially in light of these trying economic times," Nelson said in his letter to CHS employees. "However, the county has, in good faith, engaged in contracts, and it is premature to assume those agreements will not be fulfilled in the near future. Additionally, it is the boards' hope to achieve its goals of relieving the county debt and maintain medical services to the citizens of Clearwater County and the surrounding communities."