Dissolution dispute — Commissioners move toward dissolution as hospital district challenges state authority
Weston County commissioners are moving forward with plans to initiate dissolution of the Weston County Hospital District, operating as Weston County Health Services, even as the district’s attorney argues that the state lacks legal authority to require such action. The discussion took place during the commission’s March 24 meeting.
During a recent meeting, commissioners confirmed that state law, as interpreted by the Wyoming Department of Audit, requires the commission to initiate dissolution proceedings after the district failed to meet reporting deadlines.
“The way we understand statute …, you will need to follow through with the dissolution,” said Brian Wilson, a representative from the Department of Audit specifically working with state and local government. He explained that commissioners must vacate the current board and appoint a new one tasked specifically with dissolving the district.
Commissioner Marty Ertman said that the action applies only to the hospital district, not the hospital itself.
“There’s been a rumor out there that we’re dissolving the hospital, and we are not doing that,” she said. “It is only the hospital district.”
According to the discussion, the county must pass a resolution initiating dissolution and appoint a board to carry out that process. That board would exist solely to wind down the district, while hospital operations could continue under a separate governing structure.
Ann Slagle, chair of the hospital board, told the News Letter Journal that dissolving the district would directly impact operations at the hospital. She said that licensing and other legalities are through the district and not Weston County Health Services as its own entity.
The hospital district’s attorney, Allison Gee, told the board on March 26 during its regular meeting that the issue is more complicated than the discussion at the commission meeting alluded to.
As previously reported, the Department of Audit notified the county in November of last year that multiple districts, including Weston County Health Services, failed to file required annual financial reports, triggering a statutory process that can lead to dissolution if compliance is not achieved.
Audit officials said the April 1 deadline marks the end of the statutory “curing period,” and because the hospital district remains out of compliance, commissioners are required to act.
“The county commissioners shall initiate dissolution of the district,” Wilson said, noting that the requirement is mandated by statute.
However, in a March 24 email to County Attorney Micheal Stulken and again during the district’s March 26 meeting, Gee disputed that interpretation, arguing that the statutes cited by the Department of Audit do not apply to hospital districts.
“The Wyoming Department of Audit’s position that 9-1-507 applies to Hospital Districts is wrong and unsupported by statute,” Gee wrote.
She said on March 26 that she absolutely disagrees with the interpretation of the law. Gee also suggested that if the process moves forward, the district should file suit.
Gee argued that Wyoming Statute 9-1-507 — which outlines reporting requirements and potential dissolution for noncompliant entities — applies only to specific entities, including certain special districts listed in state law, and does not include hospital districts.
She further noted that legislative changes in 2016 and 2022 narrowed the definition of “special districts” subject to those requirements, removing hospital districts from that category.
“There are no provisions of 9-1-507 that apply to Hospital Districts,” Gee said, adding that the county therefore lacks authority to withhold funds or pursue dissolution under that statute.
Gee also pointed to Wyoming Statute 16-4-121(f), which requires hospital districts to conduct annual audits but does not require those audits to be filed with the Department of Audit.
“Nothing in 16-4-121(f) requires the Hospital District to file the audit with the Department of Audit,” she wrote.
Despite that legal challenge, state audit officials told commissioners they must proceed based on their interpretation of the law.
Slagle told the board that significant progress has been made toward compliance, although final reports are still pending. She noted that the 2024 audit was expected to be submitted soon with the 2025 audit shortly behind it.
Wilson indicated that the timeline is too late to halt the process.
“I’m pretty confident that 24 and 25 will not happen in the next week,” he said, adding that the county is expected to proceed with dissolution.
Commissioners also discussed logistical questions with the process, including whether they may need to serve as the initial dissolution board themselves if a new board cannot be appointed before the deadline.
Wilson noted that tax revenues tied to the district will continue to be collected and held by the county treasurer during the process. Those funds would be released if the district returns to compliance or potentially refunded if dissolution is completed.
“That money will sit there with the treasurer until this is resolved,” Wilson said.
While acknowledging the legal requirements, both commissioners and hospital officials expressed concern about the impact of dissolution on recent progress.
“The shame of it is that this whole dissolution thing will upend the progress that we’ve actually made,” Slagle said.
Commissioners indicated they plan to consider a resolution to initiate dissolution at an upcoming meeting while continuing discussions with both the Department of Audit and the district’s legal counsel.