NATCHEZ — A voter’s referendum could arrest the momentum of the sale of Natchez Regional Medical Center and possibly endanger its ability to operate in the short-term, officials said.

While NRMC has entered into a purchasing contract with Community Health Systems for the county-owned hospital’s properties and assets, state law allows for county voters to file a petition taking the sale to a vote.

The clock for gathering enough signatures to call the election — a total of 1,500 signatures is needed — officially starts ticking on the first day the hospital’s auction is advertised, which according to a schedule adopted by the county board of supervisors this week will be Aug. 1.

The petition must be filed with the county clerk of court’s office by the date the sale is scheduled, Sept. 11.

No formal petition effort has begun.

Having to arrange for the election would delay the final sale by at least two to four months, hospital attorney Walter Brown said.

“We would have to give notice of an election, and that would take 60 days, and you have to verify the petition before you can call for an election,” Brown said.

“That would make it very problematic to continue the sale process because we have already had a number of delays. We had hoped it would be done in July.”

Delaying the sale for an election would mean the hospital would have to renegotiate some of its bankruptcy financing and lines of credit, Brown said.

“Going through that process is not only time consuming, but it is expensive from the extent of all the lawyers involved representing the bank, the bond holders, the bond trustee,” he said. “All of those folks involved would have to sign off on it.”

Supervisor Calvin Butler said he is not sure the hospital can financially withstand the wait for an election or a search for a new purchaser.

“The community has to ask themselves, ‘Is that the best situation for the community, is that something they really want to do?’” Butler said. “How much longer can (NRMC) survive on their own? This process has gone on for a year or better.”

Adams County Circuit Clerk Eddie Walker said he does not know how much a special election would cost to arrange, but for comparison purposes, the recent June partisan runoff elections cost $30,000.

The general election for U.S. Senate and Congressional races and county judge is scheduled for Nov. 4. Any required run-off will be Nov. 25.

Walker said he did not know if a hospital referendum could be placed on the ballot alongside the scheduled elections, saying the Secretary of State’s Office would have to decide the issue.

“It is up to them to set election policy, it is up to (circuit clerks) to implement it,” he said.

The non-binding referendum for recreation placed on the 2009 sheriff’s race ballot had to receive approval from the U.S. Department of Justice to ensure it did not violate the Voting Rights Act of 1965, but portions of the act have since been voided by the U.S. Supreme Court.

Verifying the signatures on any petition filed would likely take several days, Walker said.

“We would have to check to see if all of the people to sign the petition were registered voters in Adams County,” he said.

Even as the clock starts ticking for petitioners, it also sets a deadline for qualified bidders to throw their hat into the ring for the state-mandated auction of the hospital.

Brown said the hospital will be sending out notices to 90 prospective hospitals and health care companies. The deadline for bidders to qualify will be Sept. 8.

“Given the fact that we have done this in 2009 and in September 2013, I seriously doubt there will be a huge response,” he said.

While the hospital is only required by law to advertise the sale three times, Brown said it would publish the legal notice six times to make sure the public is informed.

In the auction, CHS is considered the stalking horse bidder, meaning the company has already negotiated a purchase price with NRMC that will serve as the opening bid for the auction. If no one outbids CHS and the sale isn’t subject to a referendum, it will then close with CHS.

In the bidding process the county supervisors approved in June, a qualified bidder would have to outbid CHS by at least $1 million, and every subsequent bid would have to outbid the previous bid by $100,000.

The $1 million initial overbid requirement is to cover the cost of the stalking horse. In stalking horse agreements, the stalking horse bidder has a built-in financial incentive in case they are outbid because of the presumed risk they are taking on by being the stalking horse.

NRMC opened in 1960 as Jefferson Davis Memorial Hospital. Its $2.4 million construction was underwritten by an $800,000 local contribution and state and federal funds.

It has been financially independent since 1974 and does not receive tax support, but is backed by a 5-mill standby tax that the Mississippi Development Bank required the hospital to get in 2006 when it asked for the MDB to reissue its revenue bond.