Mayor Steve Bach said he will oppose an agreement to lease Memorial Health System to University of Colorado Health unless there is a plan in place on how to spend the millions in proceeds the city will earn from the deal.

Bach said the lease agreement is a “grand slam home run” for the city, but also that “my support of this lease is subject to my concurrence with City Council on how to segregate and manage the lease proceeds.”

Bach said he wanted to avoid a repeat of the $1.15 million severance agreement given to former Memorial CEO Dr. Larry McEvoy, in which Memorial’s board defied the wishes of City Council in approving the deal. Council then fired the board, but could not undo the severance agreement.

“These proceeds need joint oversight of the mayor and the council, so we can avoid another deal like we just had with the McEvoy million,” Bach said.

Councilman Merv Bennett said he’s spoken to the Mayor throughout the lease negotiations and believes everyone has the same goals in managing the proceeds. He said some form of shared responsibility between council and the Mayor is appropriate.

“His concerns are accurate and ours are the same,” Bennett said. “Finding a reasonable solution to make sure this never happens again, we’re all in agreement on that.”

Council President Pro Tem Jan Martin said how the funds are used and overseen is the important thing.

“This is not about power struggles, this is about the best interests of the community,” she said. “We are really looking to find a solution that is a win-win for everyone.”

How to manage the roughly $74 million up-front and $5.6 million annual payments from the lease is a hot topic. Several City Council members have said that the proceeds need to be used for health care purposes, but who would oversee the funds, how they would be paid out and what exactly “health care” means are all up for debate.

Bach said he wants a separate seven-member foundation board that would make recommendations about spending the lease proceeds. The Mayor proposed that he would appoint the board members, but City Council would confirm or reject the nominations, but said vice-versa would be fine with him, too. And, Bach said, “major” grant and spending recommendations from the foundation board would require approval of both the Mayor and council.