An Act To Establish Hospital Administrative District No. 5, a Regional Hospital Administrative District in Lincoln County
Maine Legislature, Session 126, LD 1127
Committee: State and Local Government
Sponsors: MacDONALD, JOHNSON, DEVIN

Legislative Document 
No. 1127 
H.P. 799 
House of Representatives, March 21, 2013 
An Act To Establish Hospital Administrative District No. 5, a 
Regional Hospital Administrative District in Lincoln County 
(EMERGENCY) 
Reference to the Committee on State and Local Government suggested and ordered printed. 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative MacDONALD of Boothbay. 
Cosponsored by Senator JOHNSON of Lincoln and 
Representative: DEVIN of Newcastle. 
Mandate preamble. This measure requires one or more local units of government 
to expand or modify activities so as to necessitate additional expenditures from local 
revenues but does not provide funding for at least 90% of those expenditures.  Pursuant to 
the Constitution of Maine, Article IX, Section 21, 2/3 of all of the members elected to 
each House have determined it necessary to enact this measure. 
Emergency preamble. Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and 
Whereas, a regional hospital located in Lincoln County is vitally necessary at the 
earliest possible time to serve the needs of the people of the area; and 
Whereas, in the judgment of the Legislature, these facts create an emergency within 
the meaning of the Constitution of Maine and require the following legislation as 
immediately necessary for the preservation of the public peace, health and safety; now, 
therefore, 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  Incorporation; purposes.  The inhabitants of the territory within the 
towns of Boothbay, Boothbay Harbor, Edgecomb and Southport in the County of Lincoln 
or a combination of the towns are constituted and confirmed a body politic and corporate 
to be known as "Hospital Administrative District No. 5" in order to provide for the health, 
welfare and public benefit of the inhabitants of the district and any persons outside the 
district who may seek or require medical care.  The district shall acquire or construct, 
extend and improve a regional general hospital system, including, but not limited to, 
acute care facilities, extended care facilities, intermediate care facilities, freestanding 
satellite facilities and facilities designed for use as offices by physicians, to be located in 
a place or places either within the district or elsewhere for the care of the inhabitants of 
the district and those persons outside the district who may seek or require medical care, 
for the purposes of maintaining and operating a hospital system, including, but not 
limited to, acute care facilities, extended care facilities, freestanding satellite facilities and 
facilities designed for use as offices by physicians, and generally providing for the health 
and medical needs of the inhabitants of the district and any persons outside the district 
who may seek or require medical care.  Without limiting the generality of this section, the 
district may also establish affiliated organizations, either alone or with others and either 
within the district or elsewhere, including medical centers, health care centers, nursing 
centers, laboratories, clinics and other medical, surgical or dental facilities, facilities to 
provide health-related shared services and such other organizations or entities, on a for-
profit or nonprofit basis, as the district may determine necessary or desirable from time to 
time, in order to provide, alone or with others, for the health and medical needs of the 
inhabitants of the district and any persons outside the district who may seek or require 
medical care.  The district may enter into joint ventures with providers or professionals 
offering health care services either within the district or elsewhere for the purpose of 
offering health care services to persons either within the district or elsewhere. 
In effectuating any of the purposes of this section or any of the other purposes 
permitted to be engaged in by the district, the district may, subject to the provisions of 
this Act, as amended and supplemented from time to time, acquire real or personal 
property or any interest in real or personal property either within the district or elsewhere, 
on either a temporary or long-term basis by gift, purchase, transfer, foreclosure, lease or 
otherwise, including rights of easements; hold, manage, operate, sell, assign, lease, 
encumber, mortgage or otherwise dispose of any real or personal property or any interest 
in real or personal property or mortgage interest owned by it under its control or custody 
or in its possession and release or relinquish any right, title, claim, lien, interest, easement 
or demand however acquired; apply for and accept from any source grants, loans, 
advances and contributions of money, property, labor or other things of value, to be held, 
used and applied for permitted purposes; and lease or rent any lands, buildings, structures, 
facilities or equipment from private parties to effectuate the purposes permitted to be 
engaged in by the district, including construction agreements, purchase or acquisition 
agreements, partnership agreements, including limited partnership agreements, limited 
liability company agreements, joint ventures, participation agreements and agreements 
with leasing corporations or other financial intermediaries. 
In effectuating the purposes of this Act, the district shall initially operate a hospital 
and provide health care services from the existing St. Andrews Hospital and Healthcare 
Center campus in the Town of Boothbay Harbor as may be agreed upon between the 
district's board of directors and Maine Health, the owner of the St. Andrews Hospital and 
Healthcare Center. 
Sec. 2.  Directors; powers and duties; limitations.  The district is governed by 
a board of directors composed of 3 members from the Town of Boothbay, 2 members 
from the Town of Boothbay Harbor and one member each from the Town of Edgecomb 
and the Town of Southport. The members must be elected by popular vote at the annual 
meeting in each town.  Except as provided in this section, a member's term of office is 3 
years.  In the first year of organization, elections may be held at the annual or special 
meeting at which the towns elect to join the district.  At the first meeting of the board of 
directors, 2 directors must be assigned to one-year terms, 2 directors must be assigned to 
2-year terms and 3 directors must be assigned to 3-year terms.  The terms must be 
decided by the drawing of lots by the board members, and the clerk of each town must be 
advised as to the result. 
The board of directors constitutes the governing body of the district and is 
responsible for providing, in whole or in part, physical facilities for a hospital system and, 
where necessary or desirable, physical facilities for affiliated organizations either within 
the district or elsewhere, which must be equipped and staffed to meet needed health care 
services for the inhabitants of the district and any persons outside the district who may 
seek or require medical care.  The board of directors shall adopt bylaws in accordance 
with legal requirements.  It may provide for an executive committee from its 
membership, which may exercise all the powers of the board of directors between regular 
meetings of the board.  The board of directos shall meet at regular, stated intervals; 
appoint committees for special purposes as needed; establish a formal means of liaison 
with the hospital medical staff by a joint conference committee; and appoint members of 
the medical staff and a qualified hospital administrator. 
A vacancy on the board of directors occurring because of resignation or other loss of 
a member must be filled by appointment by the municipal officers of the town involved, 
to be effective until the next town meeting. 
Each year the board of directors shall appoint a hospital administrator and elect a 
president, vice-president, treasurer and secretary.  The hospital administrator serves as 
secretary ex officio for the board. 
Each director may be paid $100 for each official meeting of the board that the 
director attends, and a director may not be employed by the district.  The treasurer may, 
in addition, be paid an annual salary, the stipend to be determined by the board. 
Sec. 3.  How financed.  The board of directors shall adopt a financial plan to 
operate the district and provide such other services as the board determines, as provided 
and limited in this Act.  The financial plan must call for services to be offered, with 
payment accepted from private and public sources, from self-pay patients, insured 
patients and other 3rd-party payors.  The financial plan must include fund-raising in the 
communities served by the district, including acceptance of gifts and charitable 
donations.  The financial plan must include services provided to low-income patients for 
reduced prices and charity care as required by law and determined by the board of 
directors to be consistent with the mission of the district and the financial plan. To 
procure funds to carry out the purposes of this Act, the district may, when necessary for 
the operation of the district and consistent with the mission of the district, through its 
board of directors, borrow money and issue bonds and notes to an indebtedness not to 
exceed 2% of the total state valuation of all towns that are members of the district. Bonds 
bear interest at such rates as the board of directors may determine, payable annually or 
semiannually and subject to other provisions as determined by the board of directors.  
Bonds and notes may be issued to mature serially or to run for such periods as the board 
of directors determines.  If bonds or notes are issued to mature serially, the first principal 
payment on the bonds or notes must be made not later than 3 years from their date of 
issue.  All bonds may, at the discretion of the board of directors, be made callable, and 
the amount of premium to be paid on call and the period for which the callable bonds 
may not be redeemable must be left to the discretion of the board of directors, as 
manifested by a vote of a majority of the board of directors. 
All bonds and notes issued by the district must be signed by the treasurer and 
countersigned by the president of the district, and, if coupon bonds are issued, each 
coupon must be attested by the facsimile signatures of the president and treasurer printed 
on the coupon.  The bonds and notes are legal obligations of the district and are legal 
investments for savings banks. 
Sec. 4.  Sinking fund; refunding bonds.  In case any bonds or notes at any time 
issued are made to run for a period of years, as distinguished from serial maturity, the 
board of directors shall establish a sinking fund for the purpose of redeeming the bonds or 
notes when they become due.  The amount to be paid annually into the sinking fund may 
not be less than 2% of the total principal amount of the bonds or notes originally issued 
and payments must commence not later than 3 years following the date of issue of the 
bonds or notes.  In addition to the annual sinking fund payment, the board of directors 
may from time to time add to a sinking fund any funds of the district not required for 
other purposes.  Funds in a sinking fund may be deposited in any national bank, savings 
bank or trust company within the State or may be invested in whole or in part in any 
bonds of the United States or of the State of Maine or any political subdivision thereof, as 
the board of directors may determine.  Interest received on any funds so invested must be 
added to the sinking fund.  If the amount accumulated in a sinking fund, together with 
interest received or to be received on that amount, is sufficient to pay at maturity or, at 
the option of the board of directors, to redeem the bonds or notes for the benefit of which 
the sinking fund was established, all further payments to the sinking fund must cease. 
Whenever bonds or notes issued by the district become due or can be purchased or 
called for redemption by the district on favorable terms, the board of directors, if 
sufficient funds have accumulated in the sinking fund provided for those bonds or notes, 
may pay, purchase or redeem the bonds or notes from the sinking fund and cancel them.  
In no case may bonds or notes so paid, purchased or redeemed and cancelled be reissued. 
In case the amount in a sinking fund is not sufficient to pay the total amount, when 
due, of the bonds and notes for which the sinking fund was provided, or in case it 
becomes desirable in the opinion of the board of directors to call for redemption any 
outstanding bonds or notes and to issue new bonds or notes in their stead, the board of 
directors may refund so many of the original bonds or notes as cannot be paid or 
redeemed from the sinking fund, if any, but in no case may the new bonds or notes 
mature more than 50 years from the original date of issue of the original bonds or notes 
so refunded. 
When an issue of bonds or notes has been authorized, the board of directors may 
issue or authorize the treasurer, with the approval of the president, to issue temporary 
notes in anticipation of the proceeds of the bonds or notes.  Temporary notes may be 
issued for a period not to exceed 5 years and temporary notes issued for a shorter period 
may be renewed from time to time by the issue of other notes, as long as the period from 
the original date of issue to the date of maturity of the last renewal is not more than 5 
years.  The term of temporary notes is not included in the 50-year period provided for in 
this section. 
Sec. 5.  Referendum on bond issues.  When the board of directors authorizes the 
issue of bonds, an attested copy of the vote of the board of directors must be immediately 
filed with the municipal officers of each of the towns within the district and published in 
a newspaper having a circulation in the district not later than 10 days following the date 
on which the vote was adopted by the board of directors, together with a statement 
indicating that the vote will become effective unless before the expiration of 7 days from 
the date on which a copy of the vote was first published the president or the secretary of 
the board of directors receives a petition, signed by at least 10% of the residents in the 
district eligible to vote on the date of the directors' vote was adopted, requesting that the 
question of whether the bonds should be issued by the district be submitted to the voters 
of the district.  The statement must also state the name and address of the president and 
secretary of the board of directors.  A vote of the board of directors authorizing an issue 
of bonds under this Act may not become effective before the expiration of 7 days from 
the date upon which the vote and statement are published.  If within that period a petition, 
signed by at least 10% of the residents in the district eligible to vote on the date that the 
issuance of bonds was adopted by the board of directors as shown by the district's voting 
list, is filed with the president or the secretary of the board of directors asking that the 
question of whether the bonds should be issued be submitted to the voters of the district, 
the vote of the board of directors must be suspended from becoming effective and the 
board of directors shall immediately reconsider the vote.  If the vote is not rescinded by 
the board of directors, the question of whether the bonds should be issued must be 
submitted by the board of directors to the voters of the district at a special meeting of the 
qualified voters in the district to be held in the district within 60 days of the receipt of the 
petition.  The special meeting must be called and held as provided in section 11, except 
that the notice must set forth the vote of the board of directors authorizing the bonds the 
approval or disapproval of the issue of which is to be submitted to the voters of the 
district, together with the proposed form of the ballot to be used at the special meeting.  
At the special meeting a vote on the question of whether the bonds should be issued must 
be voted on by ballot, the form of which must be substantially as follows: 
OFFICIAL BALLOT 
HOSPITAL ADMINISTRATIVE DISTRICT NO. 5 
Shall bonds of Hospital Administrative District No. 5 be issued in the amount of $           , 
bearing interest not to exceed              percent for the purpose of procuring funds for the 
following purposes, viz.:  (Insert brief description of purpose for which bonds are to be 
sold)? 
If in favor of the bond issue, make a cross or check mark in the square below the word     
"YES" 
If opposed to the bond issue, make a cross or check mark in the square below the word  
"NO" 
If a majority of the qualified voters voting at the meeting approve the issue of the 
bonds, the vote of the board of directors authorizing the bonds becomes effective; if not 
so approved, the vote is void.  The voters qualified to vote at the special meeting must be 
determined by use of the district voting list. 
Sec. 6.  District voting list.  The board of directors shall appoint a resident of the 
district to make and keep a voting list of all residents in the district eligible to vote.  This 
person is known as the registration clerk.  The registration clerk shall compile a voting 
list from the voting lists of the municipalities within the district.  At least 2 days before 
any meeting at which the inhabitants of the district are called upon to vote, the 
registration clerk shall bring this voting list up to date by comparing the voting list with 
those voting lists found in the towns of the district by making such additions and 
deletions as the registration clerk finds necessary.  No additions or deletions may be made 
in the 2-day period prior to the meeting. 
Sec. 7.  Authority to issue temporary notes in anticipation of revenues.  In 
any fiscal year, in anticipation of revenues for that year, the board of directors may, by a 
vote of a majority of its members, authorize the borrowing of money by the issuance and 
sale of temporary notes of the district. 
The board of directors may, by vote of a majority of its members, authorize the 
borrowing of money by the issuance and sale of temporary notes of the district in 
anticipation of revenues.  Such notes issued during the district's first 12 months of 
operation may not mature later than 3 years after issuance and may not exceed, in the 
aggregate, the sum of $100,000.  In any subsequent year, the board of directors may, by 
vote of a majority of its members, authorize the borrowing of money by the issuance and 
sale of temporary notes of the district in anticipation of revenues in an amount not to 
exceed the total amount of revenues expected by the board of directors to be received 
within one year from their date of issue, less the amount of any notes in anticipation of 
revenues.  Such notes in anticipation of revenues may be renewed from time to time as 
long as the period during which the notes might have been outstanding is not extended.  
Notes in anticipation of revenues, or renewals of the notes, that are not paid at the end of 
years from the original issuance may be renewed for an additional period not exceeding 
one year, but there must be included in the budget for that year an amount sufficient to 
pay the notes. 
Sec. 8.  Agreement for financial assistance authorized.  The district is 
authorized, by vote of at least a majority of the board of directors, to enter into an 
agreement with the State or Federal Government or any agency thereof or of any 
corporation or board authorized by the Federal Government or the State to loan money to 
or to otherwise assist in the financing of projects the district is authorized to finance by 
the issue of bonds as may be necessary or desirable.  The right to enter into such an 
agreement is subject to the right of referendum reserved to the voters in section 5, if the 
district incurs liability under the agreement, and the provisions of sections 5 and 11 apply 
so far as appropriate to a special meeting called and held for the purpose of such a 
referendum. 
Sec. 9.  Hospital rates; sinking fund.  The board of directors shall require all 
persons hospitalized or treated in any hospital or hospitals or other facility of the district 
to pay to the treasurer the rates established from time to time by the board of directors for 
hospital and related medical or surgical care.  The board of directors may set rates that are 
lower for inhabitants of the district than for those hospitalized or treated persons who 
reside outside the district and the board may provide the level of uncompensated 
hospitalization and services as it determines to be in the best interests of the inhabitants of 
the district.  Rates must be established, subject to other provisions of this Act, to provide 
revenue to: 
1.  Expenses.  Pay the current expenses of operating and maintaining the hospital 
system owned by the district and to provide for any necessary equipment or facilities and 
for additions or renewals of equipment or facilities.  The board of directors, in its 
discretion, may establish depreciation reserves as well; 
2.  Interest.  Provide for the payment of the interest on the indebtedness created or 
assumed by the district; and 
3.  Principal.  Provide each year a sum equal to pay the principal payable in that year 
on any outstanding obligations issued by the district or to pay the principal obligations 
payable in that year under any agreement entered into pursuant to section 8. 
If a surplus remains at the end of the year, it may be transferred to an account for the 
purposes of paying the principal or interest on any outstanding obligation or it may be set 
aside in a surplus account for use by the district for any activity in which the district may 
engage. 
Sec. 10.  Annual reports and budget.  The fiscal year of the district runs from 
July 1st to June 30th.  At the close of the fiscal year and not later than October 31st each 
year, the board of directors shall make a report of its doings showing the financial 
condition of the district and other matters pertaining to the district in order to show the 
inhabitants of the district how the board of directors is fulfilling its duties and obligations.  
The report must also include the amount of income from patients and other sources 
during that fiscal year and the sum required each year to meet the bonds or notes falling 
due and what further sum is necessary to meet the interest on the bonds or notes or other 
obligations of the district and all other expenses necessary for the operation of the district, 
including temporary loans.  Copies of the report must be filed with the municipal officers 
of each town within the district and may be distributed to the voters of the district by the 
respective towns in the same manner as is provided for town reports.  The cost of printing 
the reports must be included in the operating budget of the district. 
To the extent that the board of directors may decide that the district cannot operate 
within its income according to the hospital rates set by it, the board of directors shall 
determine what sum of money should be raised for (a) payment of principal payable in 
that year on outstanding bonds or notes or other obligations of the district; (b) payment of 
interest on the indebtedness incurred or assumed by the district; and (c) other specified 
expenses of the district, and, if the sum to be raised exceeds the total of (a) and (b), before 
the first day of May the board of directors shall hold a district budget meeting.  At this 
meeting the budget must be thoroughly explained and the voters of the district must be 
given an opportunity to be heard.  If a budget is presented in any given year, it is deemed 
approved except to the extent that it is disapproved by the voters of the district at the 
district budget meeting.  The voters of the district have the right to disapprove all or any 
part of the budget presented by the board of directors, except for provision for the 
payment of interest on or the principal of notes or bonds or other obligations of the 
district.  The amount over and above the estimated income of the district required to meet 
the expenses in the approved budget and the sums included in any budget for the payment 
of interest on or the principal of notes or bonds or other obligations of the district must be 
apportioned to the participating towns in the same ratio that each participating town's 
latest state valuation is to the total state valuation of all participating towns.  The directors 
shall issue warrants in substantially the same form as a warrant of the Treasurer of State 
for each participating town that determines to provide a voluntary contribution to the 
district.  A participating town may use the proceeds from gifts or trust funds allocated for 
hospital or medical purposes to reduce the actual amount of the voluntary contribution of 
the town.  The treasurer of each town shall pay the amount to be paid to the district in 2 
equal installments to the treasurer of the district.  The first installment must be paid on or 
before March 15th and the 2nd installment on or before September 15th. 
Sec. 11.  District budget meeting.  When a district budget meeting is called to 
approve the hospital budget as prepared by the board of directors, the board of directors 
shall cause such a meeting to be held as follows. 
1.  Warrant.  Each district budget meeting must be called by a warrant.  The warrant 
must be signed by a majority of the directors. 
2.  Form of warrant.  The warrant calling for the district budget meeting must be as 
follows. 
A.  It must specify the time and place of the meeting. 
B.  It must set forth the proposed hospital budget in a manner to be decided by the 
board of directors, and no other business may be acted upon. 
C.  It must be directed to any resident of the district by name, ordering that person to 
notify the voters within the district to assemble at the time and place appointed. 
D.  An attested copy of the warrant must be posted by the person to whom it is 
directed in some conspicuous public place in each of the towns within the district, at 
least 7 days before the meeting. 
E.  The person who gives notice of the meeting shall make the return on the warrant 
stating the manner of notice in each municipality and the time when it was given. 
3.  Budget meetings.  The following provisions apply to the district budget meeting. 
A.  Each person whose name appears on the voting list of a municipality of the 
district may attend and vote at the meeting. 
B.  The president of the board of directors shall open the meeting by calling for the 
election of a moderator, receiving votes for a moderator and swearing in the 
moderator. 
C. As soon as the moderator has been elected and sworn, the moderator shall preside 
at the meeting, and the moderator has all the powers granted to the moderator of a 
town meeting under the Maine Revised Statutes. 
D.  The secretary of the board of directors shall record accurately all the votes of the 
meeting. 
E.  A majority vote of the legal voters present and voting is determinative of any vote 
or motion placed before the meeting. 
Sec. 12.  Dissolution.  The district may be dissolved only if all participating towns 
agree to dissolve it by vote at legally constituted town meetings in the towns.  If the 
district has any outstanding indebtedness, it may not be dissolved. 
In the event of dissolution of the district, all property, real, personal or mixed, must 
be marshaled and converted into cash in a manner to be determined by a majority vote of 
the board of directors and distribution must then be made among the respective towns in 
the same ratio that each participating town's latest state valuation is to the total state 
valuation of all the participating towns. 
Sec. 13.  Other towns may join.  A town that does not belong to the district may 
be included in the district if the town votes by a majority vote at a meeting legally called 
and held to join the district and the voters of the district by majority vote at a district 
meeting called and held for that purpose votes to authorize the addition of the requesting 
town.  The provisions of section 11, as appropriate, apply to any such district meeting.  
The town shall assume a proportionate share of any outstanding indebtedness of the 
district then existing. 
Sec. 14.  Acceptance subject to referendum.  This Act takes effect only for the 
purpose of permitting its submission to the legal voters of the Town of Boothbay, the 
Town of Boothbay Harbor, the Town of Edgecomb and the Town of Southport at regular 
or special meetings called for that purpose before June 30, 2013.  The town meetings 
must be called, advertised and conducted according to the law relating to municipal 
elections, except that the registrars of voters are not required to prepare, nor the clerks to 
post, new lists of voters and for the purpose of registration of voters the registrars of 
voters must be in session on the secular day next preceding the regular or special 
meetings. 
The municipal clerks shall reduce the subject matter of this Act to the following 
question: "Shall the Act creating Hospital Administrative District No. 5, passed by the 
126th Legislature, be accepted?"  The voters shall indicate their choice by a cross or 
check mark placed below the word "Yes" or "No." 
This Act takes effect for all purposes immediately upon its acceptance by a vote of at 
least 2/3 of the voters voting in the election in at least 3 of the towns, two of which must 
be the Town of Boothbay and the Town of Boothbay Harbor, as long as the total number 
of votes cast at each accepting town's town meeting equals or exceeds 15% of the total 
votes cast for all candidates for Governor in the town at the preceding gubernatorial 
election.  Failure of approval by the necessary percentage of voters at any meeting does 
not prevent a subsequent meeting or meetings from being held for the same purpose on or 
before June 30, 2013.  The result of the vote must be declared by the municipal officers 
of the towns, and due certification must be filed by the town clerks with the Secretary of 
State. 
If this Act takes effect in accordance with this section and one town fails to accept 
this Act, the district does not include the territory or inhabitants of the town and the town 
has no right to be represented by a director on the board of directors and is not entitled to 
the benefits of membership in the district.  It does, however, have all rights as if it had 
originally accepted this Act if it does accept this Act on or before June 30, 2013. 
Emergency clause.  In view of the emergency cited in the preamble, this 
legislation takes effect when approved. 
SUMMARY 
This bill authorizes the voters of the Town of Boothbay, the Town of Boothbay 
Harbor, the Town of Edgecomb and the Town of Southport to hold a referendum to 
establish Hospital Administrative District No. 5, a regional hospital administrative district 
in Lincoln County.  The vote of the towns must take place at town meetings and the 
Town of Boothbay, the Town of Boothbay Harbor and at least one other town must 
approve the district by June 30, 2013 in order to establish the district.