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Colorado Association of Public Employees v. Board of Regents of University of Colorado12/24/1990
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Although the former statute granted the Regents a great degree of flexibility regarding the type of entity they could establish to operate the hospital, the Regents' power to provide for any entity was limited in section 23-21-102(3)(c) which stated, "No such provision shall adversely affect the rights, benefits, and privileges of any existing state personnel system employees of the university of Colorado nor deprive them of their status under the state personnel system." Furthermore, the Regents were required to appoint all employees of the hospital, "pursuant to the provisions of section 13 of article XII of the state constitution" which is the Civil Service Amendment, § 23-21-102(1). Under section 23-21-106.5, the Regents controlled the fees charged for professional services and the way in which such fees, when collected, were spent in the operations of the hospital. This last provision was not substantially changed by the new statute. See § 23-21-410, 9 C.R.S. (1990 Supp.).
The statute before us, consisting primarily of sections 23-21-401 to -410, was enacted in 1989 to enable the reorganization of University Hospital. In the statute, the legislature explains its rationale for this measure:
(1) The general assembly hereby finds and declares that: . . .
(c) The present hospital, known as the university of Colorado university hospital, is unable to become and remain economically viable because it is subject to various kinds of government policy and regulation.
(d) Unless the hospital can become and remain economically viable, it will become ever more dependent upon state subsidies, and the quality of medical service and education will inevitably decline.
(e) The needs of the citizens of the state of Colorado and the university of Colorado health sciences schools will best be served if the hospital is reorganized to operate as a private nonprofit corporation charged with the mission of operating a teaching hospital for the benefit of the health sciences schools and providing care for the medically indigent.
§ 23-21-401. Because the Regents were already authorized under the prior statute to establish the hospital as a private, nonprofit entity, the Regents' authority to "take all steps necessary to create a private nonprofit-nonstock corporation" granted in section 23-21-403(1)(a) grants no new authority to the Regents.
Several of the new provisions do result in changes in the organization of the hospital. Under the new provisions, the Regents transferred the hospital assets and liabilities to the corporation on October 1, 1989, except for the land which was leased to the corporation for a term not to exceed ninety-nine years. § 23-21-403(1)(b). The corporation is required by the statute to award hospital privileges exclusively to the "health care providers who are faculty members of the health sciences schools of the university of Colorado." § 23-21-404(1)(e). The statute specifically states, "The corporation shall not be an agency of state government, nor a department or political subdivision thereof." § 23-21-403(1)(a). Accordingly, this new corporation "shall not be subject to any provisions of law affecting only governmental or public entities." Id. Should the corporation dissolve, the assets of the corporation less amounts owed to creditors will revert to the Regents. § 23-21-404(1)(g).
The corporation is governed by a Board of Directors (the Directors) composed of nine members who are appointed by the Regents and confirmed by the Senate. § 23-21-404(1)(b). The Regents may remove the Directors at any time. Id. The Directors are responsible for operating the hos
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