Dartmouth Hitchcock Medical Center and the city of Lebanon are involved in a lengthy and expensive legal battle after the city last year declared DHMC a non-charitable institution and levied a $6 million property tax on the hospital.
The hospital sued the city of Lebanon shortly after the tax was levied because it considered charity to be the basis of its mission, according to Laurie Storey-Maiseau, DHMC spokeswoman.
"Nothing could be further from the truth," Storey-Maiseau said. "We are a charitable organization."
Lebanon anticipates spending more than $300,000 on the lawsuit, and city officials are worried that exorbitant legal fees could lead to the city raising taxes on its citizens to help defray the cost.
Adele Fulton, attorney for the City of Lebanon, said the city supports its Board of Assessors' decision to tax DHMC.
Up until 1997, when DHMC's charitable status was first reviewed, "the assessors didn't know what activities taking place there were charitable," Fulton said.
"It is the City's legal obligation to defend the law and to defend the decision of its Board of Assessors," Fulton said.
Although Fulton said the city is hesitant to raise Lebanon's property taxes to fund the "largest case the city has been involved in," she said the move may be necessary."
"If the city wins the case, the benefit to the city will be better than ever before," Fulton said.
By increasing its total assessed land which now includes the DHMC, Lebanon has reduced its New Hampshire state funding for education.
"They [Lebanon] have many problems. Their legal bills are mounting up. They are stuck," Storey-Maiseau said.
However, Fulton said the money that the value of taxes from DHMC could "far outweigh any money from the state."
Fulton said she was concerned that the DHMC had not disclosed their legal fees when the City had been open about its expenses.
She said she suspected the hospital was spending twice or three times the amount Lebanon is.
Due to the magnitude of the case and the number parties involved, the actual court proceedings have not yet started. The parties are still expecting a decision on their preliminary motions. Although the case was initially anticipated to be tried in January 2000, Fulton predicted it could take longer.
Both sides are also involved in out of court discussions, but Fulton said such meetings occur only on an "intermittent basis."
