Hialeah reaches deal to recover millions in disputed hospital water bills

After months of sparring over millions of dollars in unpaid utility bills, the City of Hialeah has reached an agreement with the operators of Palmetto General Hospital and Hialeah Hospital that will bring millions into the city’s water and sewer system while resolving a dispute over who should pay debts left behind by the hospitals’ former owner.

The settlement marks the latest development in a financial controversy first reported by the Miami Herald, which revealed in May that the city was attempting to collect more than $3 million in overdue water and sewer bills from the two hospitals as part of a broader effort by Mayor Bryan Calvo’s administration to recover millions in delinquent utility accounts.

Under the deal, Healthcare Systems of America, which has operated the hospitals since late 2024, has agreed to pay over $2.4 million to the city. The amount represents the balance the city calculated it was owed as of May 31, with Hialeah Hospital owing $1 million and Palmetto General Hospital owing over $1.4 million. In exchange, Hialeah has agreed not to hold HSA responsible for utility charges incurred before it took over the hospitals from bankrupt Steward Health Care and will credit approximately $300,000 in disputed penalties, late fees, interest and administrative charges toward HSA’s future water and sewer bills.

The agreement, signed on July 1, formally recognizes that HSA is not responsible for unpaid utility charges incurred before it assumed operation of the hospitals on November 2024. Instead, the city agreed to seek payment only for water and sewer services provided after that date.

However, approximately $561,000 in unpaid utility charges remain tied to the hospitals’ previous owners. It is unclear whether the city will be able to recover those funds, given that Steward Health Care filed for bankruptcy in 2024 before transferring the hospitals to HSA.

Hialeah’s legal department told the Herald in a statement the city is “working actively pursuing all avenues to collect on any and all outstanding debts.”

‘A political stunt’

HSA said the agreement confirms the position it has maintained since the dispute became public: that it was never responsible for utility debts incurred before it assumed operation of the hospitals and that it was prepared to pay once the city issued corrected invoices under the proper ownership.

“We are deeply disappointed by the mayor’s false narrative and attempt to place the blame on others when the city was to blame,” HSA Florida CEO Faisal Gill said in a statement. “The city wrongfully attempted to make HSA pay water bills that were not ours, and when we rightfully objected, they stalled the process in an attempt to make us pay others’ bills.”

HSA took over the Hialeah facilities, along with Coral Gables Hospital, North Shore Medical Center in North Miami-Dade and Florida Medical Center in Lauderdale Lakes, from troubled Steward Health Care System in November 2024 as part of a deal Steward made in court to reduce debt. Gill, an attorney for the health system, was named CEO of the Florida hospitals earlier this year after the company’s founder was ousted over allegations related to mishandling money.

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Gill said HSA repeatedly asked the city to establish utility accounts under Palmetto Hospital and Hialeah Hospital after assuming operations in 2024, but the city did not create the accounts until late May 2026. He also said the city failed to provide accurate invoices because the bills continued to include charges owed by prior owners.

“As HSA has maintained from the very beginning, we were always ready to pay once we received corrected, accurate invoices, in the name of the proper entities,” Gill said. “Once the City agreed to waive 100% of those erroneous charges by providing a 100% credit for the alleged late fees and penalties, we readily paid our balance.”

Gill said the dispute “could have been avoided if the mayor and City of Hialeah had simply issued proper invoices to the proper entities from the start,” and accused Calvo of turning “the city’s administrative failure into a political stunt.”

Calvo rejected HSA’s version of the dispute.

“HSA is entitled to characterize the situation however it chooses,” the mayor said. “The fact remains that these were outstanding utility balances that had gone unpaid for over the course of two mayoral administrations. My administration made protecting taxpayers a priority, pursued every available avenue to recover what was owed, and the city recovered approximately $2.4 million.”

HSA had publicly maintained that the city, not the health system, was to blame for the trail of late and unpaid bills even before the settlement was finalized. In a recently released episode of the “A Day in Miami” podcast presented by the health system, Gill described the dispute as a lingering issue stemming from Steward Health Care’s bankruptcy and said he believed an agreement with the city was imminent.

Gill also reiterated that HSA had attempted to pay for utility services after taking over the hospitals but said the city insisted the company first pay Steward’s outstanding balances.

“And they’re like, ‘Well, you got to pay Steward’s bill.’ We said, ‘No man, we’re not going to pay Steward’s bill,’” Gill said. “I’m having a hard enough time paying my own bills. I’m not going to be paying somebody else’s bill.”

Years of unpaid bills

The settlement follows another Herald investigation that found Hialeah’s Public Works Department had accumulated approximately $4.5 million in delinquent utility accounts, including the hospitals, condominium associations and commercial properties, over several administrations without the issue being publicly disclosed to the City Council.

Calvo had described the unpaid balances as both a financial and fairness issue, arguing the city could not aggressively enforce water shutoffs against residents while allowing large institutions to accumulate millions of dollars in overdue bills.

The Herald also reported that council members who served under previous administrations said they were unaware of the growing utility debt until contacted by reporters, raising broader questions about financial oversight and transparency within City Hall.

Documents obtained by the Herald show that as early as January 2025, city officials were discussing the hospitals’ growing utility debt months before it became public.

The two Hialeah hospitals have had several owners. According to emails from city employees, Tenet Healthcare, which owned the hospitals before Steward Health Care, carried a “small” outstanding balance of about $115,000.

Tenet sold Palmetto General Hospital and Hialeah Hospital to Steward Health Care in August 2021 during the administration of Mayor Carlos Hernández. Over the following years, the unpaid utility balance grew to roughly $1.6 million under two different hospital owners, during Mayor Esteban Bovo Jr.’s administration, and continued to increase during Jacqueline García-Roves’ nine-month tenure as interim mayor last year.

Tenet previously told the Miami Herald that it “made payments regularly when the hospitals were under our management. Any outstanding obligations were transferred to Steward Healthcare consistent with the terms of the transaction.”

Broader collection effort continues

The agreement closes one of the most visible chapters in Calvo’s effort to recover delinquent utility accounts, an initiative the administration says is necessary to strengthen the city’s aging water infrastructure and ensure large institutional customers are held to the same payment standards as residents.

City officials say the settlement is part of a broader effort to recover delinquent utility accounts.

According to the administration, 21 accounts representing approximately $1.05 million in outstanding balances are now on active payment plans, negotiating payment agreements or have already paid their delinquent balances in full.

Public records show that of the more than $181,000 delinquent utility accounts that remain outstanding, commercial structures and at least three condominium associations are in the process of having liens placed on their properties, closing their utility accounts and having water service disconnected. Another $18,000 in delinquent balances involves accounts that are in bankruptcy proceedings.

“Our responsibility is to protect the interests of the taxpayers of Hialeah, and that’s exactly what we’ve done,” Calvo said. “Every dollar we recover is a dollar that stays working for our residents and the essential services they depend on. We’ve made significant progress, but our work continues. We’ll keep pursuing every avenue to recover outstanding balances while applying the same standards fairly and consistently.”

Miami Herald reporter Michelle Marchante contributed to this report.