Aransas County commissioners, at their special meeting Thursday, Feb. 11, heard a presentation, report, and update by Long Term Recovery Team (LTRT) members William Whitson and Kim Foutz about the Micro-Hospital/Medical Facilities grant project, and possible proposed amendments to the grant application, and then discussed the matter.

A public hearing then followed to receive public comments regarding the Micro-Hospital/Medical Facilities project and associated possible proposed amendments to the Hurricane Harvey Recovery, Texas Community Development Block Grant-Disaster Recovery (CDBG-DR) Program, Community Development Contract No. 20-065-098-C270 with the Texas General Land Office (GLO).


Whitson said the purpose of the presentation is to try to explain one of the most rewarding, but complicated projects the LTRT has taken on.

He gave a brief overview about how the idea of a micro-hospital came about, what occurred up to and through the November 2020 bond election in which voters approved Proposition C (the issuance of general obligation bonds in the principal amount not to exceed $1,370,000 to construct and equip a county building to be utilized as a micro-hospital in the county), to where the project stands today.

Immediately after Hurricane Harvey the LTRT began damage assessments, and one of the things that rose to the top was lack of healthcare facilities. The storm destroyed the only hospital (located in Aransas Pass), leaving only Code3ER and Allegiance Ambulance as emergency providers.

He noted Section 61 of the Texas Health and Safety Code requires the county to provide basic health care services. The county has an Indigent Health Care Program funded with a ½¢ sales tax, which was approved by voters.

Whitson said the LTRT identified possible grant funds for the micro-hospital.

“What we are going to talk about tonight began in 2019,” said Whitson. “The process has been lengthy and complex.”

A feasibility study for a micro-hospital was initiated in June 2019, and completed two months later.

The county immediately applied for a CDBG-DR grant, which was due in August of that year.

“We tried to work it out to have only one site on the application, but ended up with two,” said Whitson.

That had to be done because neither site could be secured prior to the grant deadline.

The first site was where Code3ER was located. The second site was the Little Bay Primary building.

Since the county applied for the grant, Code3ER shut down in April 2020, and the county learned in October 2020 it was awarded a $10.4 million grant for the micro-hospital, which required no matching funds, and Corpus Christi Medical Center (CCMC) announced in October 2020 plans for a freestanding emergency center in Rockport, where Code3ER had been located.

CCMC opened its new facility Jan. 5 of this year.

“Our approach has been to remain flexible to address changing community conditions,” said Whitson.

After the county learned it had been awarded the grant, and CCMC finalized its lease with Aransas County Medical Services, Inc. (ACMSI), the LTRT started to explore many options, consulting with experts in the medical field.

The ACMSI owns the buildings and surrounding property that houses CCMC’s ER 24/7 Rockport, Allegiance EMS, and a number of doctors’ offices, and medical services.

“We now have a nucleus of medical facilities in one place, and the opportunity to enhance (medical services) with this $10.4 million (no match) grant,” said Whitson.

The LTRT and ACMSI have been working on a draft Memorandum of Understanding (MOU) to address any new construction/operations on ACMSI property.

“We have a grant with a lot of federal strings attached,” said Whitson. “We are trying to match everything up with ACMSI, local conditions, and federal requirements.

“As with any grant, we need to make sure everything matches up so there are no issues with funding.

“Kim (Foutz) and I have met multiple times with attorneys coming up with this MOU.”

Foutz then continued the presentation, noting the ACMSI and county will cooperate in issuing a Request for Proposal (RFP) for a medical facility to be located on ACMSI property (400 Enterprise Blvd., corner of Enterprise and FM 2165).

An “inclusive” committee will review the RFPs, select an operator, and make its recommendation to Aransas County commissioners.

The operator can be a non-profit or for profit organization.

The RFP will ask operators to consider what the local market will support. They will also have to remain within budget, or fund the difference.

They are to consider everything from a micro-hospital and surgical/procedure center, to a healthcare center or clinic.

The parties will mutually determine the size and configuration of the facility during the design process, considering the local market, medical industry best practices, provider/operator proposals, and available budget.

The county will handle the procurement to bid and build the facility because it is a federal grant, given to the county.

Upon issuance of the Certificate of Occupancy, the county will convey the structure to the ACMSI to own and manage, or will lease the facility to the ACMSI if conveyance isn’t allowed by the General Land Office (GLO).

A separate Operating/Management Agreement may be established between one or more of the parties and the operator that outlines the relationship between them regarding provision of healthcare services (i.e. – an agreement between Aransas County, ACMSI, and operator might be required).

The county would continue to provide indigent care funding, up to specific limits, already funded via it’s ½¢ sales tax revenue.

There has been no MOU finalized or agreed upon by any party, but the ACMSI has expressed agreement with the MOU. The GLO has not reviewed the final draft MOU, and will do so after the county has given its feedback.

Whitson noted the GLO wanted the county to seek the $1.37 million in bonds in the November election because the $10.4 million CDBG-DR grant did not cover equipment.

ACMSI Executive Director Patricia Arnold said many hospital operators prefer having their own equipment, which is a cost they would assume.

“They already have (equipment) contracts,” she said.

The next step in the process, according to Foutz, is to meet with GLO officials and let them know where the county is on the project.

“Once we get feedback from them regarding the MOU, it will be brought back to the ACMSI and Aransas County commissioners,” she said.

Foutz noted an extension is needed to complete the facility, since the clock has been running since last October, when the grant was awarded. The federal funding requires work to be completed within two years.

“We have to see if we can get the extension from the GLO, and the expansion of services approved,” said Foutz.

Commissioner Wendy Laubach asked what the timeline might be for completion of the project.

Whitson said the county is looking for an extension (since the clock starting ticking in October 2020 when the grant was awarded), so the completion should be in two years, or at some point in 2023, depending on the results of the extension request.


Laubach asked Foutz to address “confidentiality” issues surrounding the project.

Foutz said all materials related to the project will be available on the Internet (county’s website), but there are some area’s that are still covered, as outlined by the GLO, by confidentiality.

“Now that we have the site, it changes the equation quite a bit,” said Whitson.

Commissioner Jack Chaney asked what the county’s responsibility will be after the facility is conveyed to the ACMSI.

Foutz said the county will have to ensure operation of the facility remains in compliance with the federal grant. It will also have to allow access to the indigent care funds for qualified recipients being treated at the facility.

Commissioner Bubba Casterline reminded everyone the county already funds indigent health care with sales tax revenues.

“Will the county be required to pay more in indigent health care costs then what it receives (from the ½¢ sales tax)?” asked Chaney.

Whitson answered, “No.”

Chaney also asked about how auditing of the operation will occur.

“Everything will be reported through the county’s normal audit,” said Whitson.

Chaney asked, due to the two-year time frame to complete the project, if the number of beds in a micro-hospital will have to be determined quickly.

Foutz said the number of beds will be determined by the RFPs, which will be based on market conditions.

Public hearing

One woman questioned how the ACMSI, a non-profit organization, can have a for profit client leasing its property.

Whitson noted the county is building a facility on land owned by the ACMSI.

“The GLO allows us to put an operator in that space to deliver services, however, the county nor the ACMSI, can make a profit,” he said.

Local developer Mark Uhr said, “I’m very much in favor of getting more medical services in Aransas County.”

Uhr, noting that it appears a site has already been selected, encouraged commissioners to consider the vacant 12,034-sq.-ft. building next to Ace Hardware that once housed Rockport Urgent Care Center.

“I represent the owner, and am proposing the county consider the purchase of this property. The ambulatory surgical center can be added on the exiting property, and the owner of Ace Hardware is open to a reciprocating parking agreement on his property for the additional parking this facility may require.

“I think you can (provide a facility) for significantly less (than building new, and going through environmental, and other expenses),” said Uhr.

Kathy Kane said she is grateful the county is working with the ACMSI to bring needed healthcare services here.

“I am also pleased to hear this project is embracing the RFP process to solicit a potential partner,” she said.

She recommended the selection committee include local residents, as well as county officials and ACMSI representatives.

“This community involvement will help ensure what is being built is what is needed and within our financial constraints,” said Kane.

She asked the court not to use the bond money approved in Proposition C because voters were not asked to support a bond to build a “to be determined” medical facility.

“If funding is needed beyond the grant, bring the detailed project to the citizens and ask for a bond with full transparency,” said Kane.

Jeff Hutt asked where the county is in the RFP process.

Whitson said work with attorneys continues, and the when completed, after consensus among parties is reached, the final draft RFP will be sent to the GLO for approval.

He noted hopefully that will be next month, but the timing is ultimately up to the GLO.

Laubach said what she is hearing from the public is there is a great need for urgent care services, not just the more expensive emergency services currently available.

(Note: One agenda item, the consideration of a Resolution authorizing the award of a Recovery Grant Program, Management and Administration Services Contract for Aransas County for the Department of Commerce Economic Development Administration (EDA) Program and Workforce Development and Entrepreneurship Center, was taken off the agenda.)

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