An $11.7 million federal grant to build a new clinic for the Lexington-Fayette County Health Department appears to be back on track if money can be found to buy land for the project.
"We are making progress," said Dr. Rice Leach, the health commissioner. "Unless something unforeseen happens, this transaction is going to happen."
The grant will be used to build a new medical and dental clinic for the department's Primary Care Center, which serves 17,000 mostly poor citizens annually.
"We are packed in here like sardines," Leach said of the current clinic at 650 Newtown Pike.
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However, the grant cannot be used to purchase property on which to build.
William North, executive director of the Primary Care Center, said there is an ongoing search for land and donors to fund its purchase. He said he would like to buy land by the end of April. The grant requires that all the work be completed by September 2012.
A December site visit by the federal Health Resource and Services Administration, which gives the grant, pointed out several major obstacles the health department needed to overcome.
Federal officials made it clear that a plan for the department to partner with the Bluegrass Mental Health and Retardation Board to get the grant would not be allowed because other agencies can't provide services in the Primary Care Center.
When the deal fell through, the health department lost the $2.4 million in land the mental health board was offering as part of the partnership.
HRSA also required the Primary Care Center, which operates under the umbrella of the health department, to become independent and have full control of its own budget.
Those questions of "governance" had been in dispute for years. Leach retired as executive director of the Primary Care Center last year in part because of the inability to get that issue resolved. He became head of the department after Dr. Melinda Rowe resigned in early March.
North said he is working with Leach to fine tune the Primary Care Center's independence.
Federal officials also questioned how city tax dollars are allocated by the Board of Health to the Primary Care Center.
The health department has received roughly $37 million in property tax money since the city began collecting the tax specified for the department in 2005. In 2010, it received $7.1 million in tax revenues, with $1 million going to the Primary Care Center.
The Board of Health, which determined the allocation, didn't finalize the number until the end of the year, and any money the Primary Care Center made was deducted from the allocation.
That meant the Primary Care Center "is not able to track their finances based on a fluctuating tax allocation" and "operates in a deficit situation," HRSA officials wrote in their review.
A motion approved at the March meeting of the Board of Health should resolve that issue by estimating an annual allocation based on previous years' needs, North said.
Leach and North agreed that the issues raised after the December visit are not new. But because of the strained economy, they both said, federal officials are looking at grant allocations with a new level of scrutiny.
Months of turmoil
The site visit by HRSA was followed by several months of turmoil and a management shake-up at the health department, which has a $28 million annual budget and 360 employees.
North was suspended by Rowe, the former health commissioner, then reinstated, although the reason for his suspension was never made public.
That management tussle prompted a series of emergency meetings of the health board, at which health department employees complained of a hostile and chaotic work environment. Rowe and Rodger Amon, the chief operating officer, resigned.
Rowe asked to stay on with the department in the newly created position of public health physician. However, Leach has yet to decide whether she will be allowed to do that.
The decision on the position was originally supposed to be made in early March. Rowe is on leave from the department.
In addition, the state Office of the Inspector General and the Kentucky Board of Pharmacy are investigating the Primary Care Center, and two employees have been reassigned from their normal duties because of that probe.
North, who has headed the center since September, said he is looking forward, not back.
"That is all history to us," said North, adding that the focus now is to address the concerns made clear by HRSA.
Leach said he wants a facility to serve more of the 30,000 people living in Fayette County who don't have insurance, as well as drawing others who now use private physicians.
Leach said the medical care provided by the center matches any in the county.
A new building could help improve the Primary Care Center's image and attract new patients, he said.
"If done properly, it gives us a chance to access another population," he said.