The city of Troy entered an agreement two years ago knowing it could find itself once again in the hospital business. Tuesday, that’s right where the Troy City Council found itself headed.

And, it’s going with a price that will come straight from the pockets of Troy residents.

The council accepted a proposal Tuesday from Troy Doctors Hospital, LLC. that will put the city in charge of hospital operations, and it approved right along with it a 1-cent sales tax to fund that endeavor.

Effective March 1, the tax will be implemented in addition to the already 2-cent sales tax in the city of Troy. Including state and county sales taxes, Troy residents will pay 9 percent on purchases.

This is the first time since 1978 an additional sales tax has been added for the city.

Troy Mayor Jimmy Lunsford proposed the tax to fund Troy Regional Medical Center operations, but within 12 months from its implementation, he said he’d like to place the decision in the hands of voters.

“My intent is within 12 months to have a referendum that will allow the people to determine if they want to have a 1-cent sales tax and leave as is or dissolve the trust fund and reduce the amount of that tax,” Lunsford said.

The city’s trust fund was established in 1994, with a balance now of around $16 million. If the sales tax was reduced with a vote, the city could draw from this fund to operate TRMC.

Council members accepted the proposal, knowing it’s the only option that will keep the doors of the city’s hospital open.

“I am voting for a 1-cent sales tax because there is no choice,” said District 3 Councilman Jason Reeves. “We have to have money to fund the hospital in the interim, and there is no where to get it from.”

This all comes after Troy Doctors Hospital LLC., composed of 14 local doctors and investor Gil McKenzie, originally made the purchase in January 2008 with the city’s support. Though the doctors group, as its more commonly called, was the owner of TRMC, the city’s agreement was to take over if at any time the doctors were no longer able to operate.

“They have lived up to the promise they made in January 2008,” Lunsford said. “If the city would support their venture in assisting them to acquire the hospital, and if and when they got to a point they could no longer run the hospital, ownership would come to the city.”

McKenzie, owner of Giliard Health Services, which invested in the hospital turnaround, stood before the council Tuesday with high emotions.

“It’s with a great deal of sadness I come before you tonight to say we have not been successful in completing the turnaround of Troy Regional Medical Center,” McKenzie said. “I do believe we have come along way. I know for a fact you have a hospital you can be proud of.”

McKenzie said it wasn’t the fault of any one person or factor that resulted in this end.

“We’ve known it was going to be tight the whole time,” McKenzie said.

Lunsford attested this transition is not any reflection of the hospital’s heath care quality but simply financial matters.

The transition to own the hospital has not officially taken place just yet. Both the city council and the city of Troy’s Health Care Authority, which will take the hospital in its name on behalf of the city, have both approved to make the move.

However, the official move will be effective Friday.

When this does take place, though, the transition will be a fairly simple one since the city already took ownership of the real estate and assets of the hospital late last year.

That was done also at the doctors’ requests, to allow the city to take a loan at a lower interest rate than the doctors alone could acquire, and doctors were set to make payments to the city’s Healthcare Authority. However, if the time came where doctors could not afford to make payments anymore, it was agreed the city would take over operations, as well.

“Hopefully it will be completely seamless. When employees walk in, they will see the same administrators in their offices, the same nurses on shift, the same people, and the quality of care is as good as I’ve ever known it,” Lunsford said. “This is all about dollars and being under capitalized. It is not about the hospital.”

The agreement was signed by 100 percent of the hospital owners and members of the board.

“They are fully supportive of the move to turn operations of Troy Regional Medical Center back over to Troy,” Lunsford said.

While the effort of the doctors turnaround at TRMC was not a successful venture, McKenzie thanked the city for the opportunity.

“We never would have had a chance to even try if the city had not been behind us on the front end,” McKenzie said.

That comes from the one who invested a substantial amount of personal assets into TRMC.

“I’ve never met a more tenacious individual. He’s placed a good bit of his wealth in jeopardy,” Lunsford said. “It’s sad the hospital has continued to get better and better but financial aspects, for whatever reason, were such that could not be completed.”

As the city of Troy accepts this responsibility, Reeves said it will be vital all involved become more accountable than ever.

“It’s been a tough meeting tonight,” Reeves said. “To members of the medical clinic board, what we did tonight was take 1 percent from the residents of the city of Troy. We will need to use that wisely.”