The Parker County Hospital District Board of Directors approved a tenth-of-a-cent decrease in the tax rate Thursday and a budget that includes adding an ambulance station in the western portion of the county.
The adopted rate - just a hair above the effective tax rate of 11.1967 cents per $100 valuation, the rate at which the same properties taxed the previous year would bring in the same amount - is expected to bring in more than $10.1 million in revenue based on current certified tax appraisal roll values.
The hospital district currently funds programs such as LifeCare, Campbell Clinic, an indigent medical assistance program, immunizations, flu shots and other community outreach programs.
Since Community Health Systems entered a 30-year lease in 2006 with the district to operate the hospital, the district has made significant facility improvements and expansions, upgraded and expanded ambulance services, grown the medical assistance program and begun providing free immunizations to uninsured school children.
The district is the envy of other counties in the state, who don’t have the money to do some of the things they are doing, District CEO Randall Young said.
With multi-million dollar indigent care payments to CHS finished as of this summer and a recent decision by the board to give CHS an additional payment of up to $9 million for unspecified hospital improvements, budget and tax rate discussions were lively last week.
One board member, Director Eric Floyd, broke with the consensus and argued that the tax rate should be significantly lowered now that the district is no longer required to make large payments for indigent care to the company operating the hospital.
“The question I have on this budget is why are we having the taxpayers pay $4.4 million more than what we really need?” Floyd asked.
According to figures presented by the district’s controller, Judy Harris, total revenues are expected to be nearly $4.5 million more than the district’s $11.1 million in expenses.
The philosophy of the finance committee, the board and strategic planning committee is they want to keep a reserve built up, Young said, adding the administration’s recommendation is to have a seven-year plan to build a reserve back up since they don’t have any big money transfers after the last one.
Their goal is to be back up within seven years to where, if something drastic was to happen and they had to run a hospital, they have the reserves in the bank to do so, Young said.
“If we’re so worried about reserves why did we give away $9 million dollars last month,” Floyd said.
“We’re investing back into our hospital,” Director Jamie Bodiford-Brinkley said. “It is our hospital.”
“It’s not more than what we need,” Young said of the projected more than $4.4 million net income. “We have to have cash reserves.”
In response to a question from Floyd, Harris said the district has between $20 and $25 million cash in the bank.
“The hypotheticals always exist. You cannot count on the possibility not occurring,” Director Mike Carter said of the chance that the hospital district could be left to run the hospital before the end of the 30-year lease.
“I agree there’s risk of that,” Floyd said.
“I know it’s a hot button at this point,” Carter said the board’s decision to pay up to $9 million to CHS. “We’ve reinvested that back in this community on the faith that they will reinvest in this community and they will do that. They have stayed up with every committment they have made to us at this point.”
“Why is this budget not balanced at this point?” Floyd said. “This budget should be balanced.”
“It’s no different than any other budget you’ve approved in the last five years,” Young said.
“Well, right but the last five years we had a huge contractual requirement to pay a lot of money,” Floyd said. “We don’t have that contractual requirement any more.”
Carter said that they are trying to come up with a $30 million reserve, in case they have to run the hospital again, a figure that the finance committee derived.
It has always been his recommendation to continue a steady reduction in the tax rate because they cannot increase taxes without subjecting themselves to rigorous legal hoops and elections, the district’s attorney, Brian Jackson told the board. “So if you cut the tax rate by 75 percent this year, and then you did have to take the hospital back, you could not next raise the rate back up by 75 percent without having a number of legal hoops to go through that very well might render you unable to do that.”
He wants the district to remember it is more difficult to raise the rate, Jackson said.
Bodiford-Brinkley pointed out that the tax rate had dropped significantly, from 17.5 cents per $100 valuation before the lease to the current 11.3 cents.
Young recommended that those who did not agree with the budget present an alternate budget or vote against it.
Young asked the board to adopt the effective tax rate, calculated at 11.2 cents per $100 valuation, or alternative tax rates of 11.1 or 11 cents per $100 valuation.
The current tax rate is 11.3 cents per hundred dollar valuation. It held steady last year, after dropping from the 2009 - 2010 fiscal year rate of 11.5 cents.
Currently the 2012 certified appraisal value of properties taxed by the hospital district is $9.116 billion, with the value of additional properties still under protest at $169 million, according to information provided Monday by Parker County Chief Appraiser Larry Hammonds. After the protests are heard, the value as approved by the Appraisal Review Board will be added to the certified value for a 2012 total certified value.
Hammonds reported the 2011 certified appraisal roll values totaled $9.201 billion. Currently, the district has collected $10.3 million in current and delinquent taxes this year, Harris told the board.
Floyd was the lone vote against the tax rate and accepting the budget. Directors Carter, Bodiford-Brinkley, David Barbrick, James Austin and Nolan Queen all voted to approve the 11.2 cent tax rate and accept the budget.
Shortly after Floyd left the meeting early, one director also brought up Floyd’s public statements in the Democrat opposing the board’s decision to make a payment of up to $9 million to Community Health Systems and doing so without a contract or written agreement.
“Is there anything we can do to Dr. [Floyd] if he keeps running these articles against the board,” Queen asked the district’s attorney, who told him that Floyd has a right as an elected official to approach the media.