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State blocks Noble Hospital's finance plan

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GOUVERNEUR — The state attorney general's office has opposed E.J. Noble Hospital's plan to use restricted funds in its endowment as collateral for a line of credit, which worsens the hospital's already delicate financial position.

“We're a very small, fragile, rural community. Right now, things are going very badly,” E.J. Noble Hospital board Chairman Timothy J. Monroe said. “We're going to be very short of operational funds.”

The state Health Department shut down the hospital's lab because of deficiencies Sept. 28. The closure forced the shutdown of many of the hospital's functions, including the emergency room, obstetrics and surgeries.

After a plan of correction was filed and reviewed, the Health Department allowed a partial reopening of the hospital Oct. 29, but its blood bank remains closed. While the hospital has a few admitted patients and its emergency room is open, the obstetrical unit remains closed and most surgeries are off limits.

About 70 employees were laid off when the hospital closed and most have not been called back.

“We don't have the business to need them. Our doctors are upset this institution could close and they're looking at other places. I feel bad for the employees,” said Dr. Monroe, a veterinarian. “We're really trying to re-establish the function of the blood bank.”

Dr. Monroe said the state wanted more detail in the plan of correction before it would allow the blood bank to reopen. State Department of Health spokesman Bill Schwarz had no immediate comment on the status of the hospital's blood bank or whether emergency funds were available for the hospital.

E.J. Noble was financially weak before the shutdown. It lost $650,000 last year and its affiliated nursing home lost $115,000.

The hospital had sought in state Supreme Court to use three restricted gifts as collateral for two lines of credit that it would use for operating expenses.

That did not sit well with the attorney general's office.

“While we cannot comment on ongoing litigation, the attorney general's office has a duty to ensure that restricted gifts are protected and serve the stated intent of the donor,” Michelle Hook, deputy press secretary, said in an email.

However, Dr. Monroe said the endowment funds were meant to benefit the hospital, but that administrative fees and low interest rates have not allowed the fulfillment of that goal.

“It eats up more money than it generates,” he said. “The intent was to support the hospital through the interest and it's no longer doing that.”

Dr. Monroe said that he, Administrator Charles P. Conole and representatives of Samaritan Medical Center, which is supervising the lab, are to meet today to discuss services the Watertown hospital might provide.

“There's no particular agenda,” Dr. Monroe said.

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