Trinity Hospital District budget approved
Groveton News - June 2007

TRINITY – Despite being labeled as “crooked” by one harsh critic, a new budget for the Trinity Memorial Hospital District was approved Monday night.

The new spending plan lists revenues of $792,621 – up by about 4.1 percent from last year – and operating expenses totaling $438,000 or about 11.4 percent above the current level,.

The new budget is set to go into effect on July 1 when TMHD begins its new fiscal year.

Under the plan, the hospital district would keep its current tax rate of $0.1994 per $100 in assessed value. Because the average value of a homestead in the district is about $40,000, that tax rate would mean the average taxpayer would pay $79.76 (not counting exemptions).

While the projected revenue exceeds operating expenses by $354,621, all of that plus more is being earmarked for the renovation of the East Texas Medical Center – Trinity emergency room during the coming months.

TMHD owns the hospital building and the facility is operated by East Texas Medical Center (ETMC) under a 10-year lease.

During the current budget, which ends on June 30, the district had set aside $613,000 for Phase I of the emergency room project, which included the construction of a new waiting room/reception area and parking lot work.

Phase I is nearing completion and the hospital expects to begin Phase II – the remodeling of the existing ER space – in July.

Under the new budget, $608,728 is being allocated under capital expenditures to complete the ER project and to install a concrete parking area in front of the hospital.

This plan would leave the 2007-08 budget with a deficit of $254,107.

According to the board, this deficit will be covered from the more than $2.6 million currently being held in the hospital district’s fund balance (reserve fund).

During Monday’s public hearing on the budget, Jerry Coma called the new budget “down right crooked” and charged that the district was not following the law in the way it was presenting it.
He said that while the law which established the district requires the board to list all of its funds in its budget, nowhere in the proposal was the $2.6 million fund balance actually listed.

“It appears that you are just trying to hide the fact that you have that money from the public,” Coma charged.

He noted that by his calculations, the district could eliminate its property tax for up to five years and there would be enough money in the fund balance to continue its operations.
“You’re breaking the law as far as I’m concerned,” he told the board.

“Senate Bill 1194, Section 8 deals with how the budget is to be presented and you have not followed it,” he said. “I’m sorry you can’t read but its there in black and white.”

SB 1194 is the law which originally created the Trinity Memorial Hospital District.

Coma called the fund balance a “slush fund” that the current board is using to fund “pet projects.”

Those comments drew a response from board member Jim Rippey, who defeated Coma in the May 12 election.

“Most of us believe in advance planning and obviously you don’t,” Rippey told Coma. “You call them ‘pet projects’ but they’re not. ER use is the fastest growing area in the hospital and its expansion was absolutely needed.”

While not address during Monday’s meeting, previously the board has said they allowed the fund balance to grow to its current size in order to take care of emergency expenses.

The largest emergency envisioned by the board would be the withdrawal of ETMC from its contract with TMHD. They have estimated it could cost the district up to $2 million to replace equipment and operate the hospital until a new management company could be found.

While ETMC has been very successful in its management of the local hospital, the board noted that two previous management firms were not and left TMHD in debt when they withdrew.

Later during Monday’s meeting, the board also discussed other projects for which money in the fund balance could be used, including the construction of a new operating room; new, up-to-date patient rooms; and another clinic building.

A report from the Long Range Planning Committee indicated the panel was in discussion with ETMC officials about the projects.

Ward indicated that the estimated cost of improvements now being discussed is about $5 million.

He noted that the addition of a new operating room has been under discussion for some time.

“We need to do something with our patient rooms to being them up to standard,” Ward said. “Right now they don’t even have showers.”

He said ETMC officials and architects were looking at the existing space in the hospital as well as considering adding onto the north side of the building.

Ward added that ETMC officials have obtained information indicating the hospital district might be able to obtain a $750,000 Texas Capital Fund Grant to build another rural health clinic in Trinity

The TMHD president noted that the projects are now in the preliminary planning stages and would be discussed in great depth by the board during the coming months.

Tax collection fees
During the meeting, Alan McKinley, chief appraiser with the Trinity County Tax Appraisal District, met with the board to explain the tax collection fees currently being paid by TMHD.

Coma previously had charged that the hospital board was overpaying the contract by about $27,000 this year.

McKinley said that contract did list a price of about $28,000 and the actual payment for the current year came to about $45,000.

He explained that when the tax collection service was launched in 2005, the various taxing entities that used it – including county school districts and the hospital district – agreed to a three-year contract.

We did that to provide some stability to the collection office,” McKinley said. “I suppose we should have gone with one-year contracts and that is what we will probably do in the future.”

Each year since the collection office was created, McKinley said its board meets to draft a budget and the various entities are required to pay a pro-rata share of the costs.

This past August, the new budget was drafted and four members of the TMHD board were present.

“Two weeks later I even came to your board meeting to explain the increase,” he said.

“My mistake was not changing the amount listed in the contract, but at no time did we try to hide any of the increase,” he said.

He noted that while the contract did list a price, another section noted that if expenses increased, each entity would be required to pay additional fees on a pro rated basis.

McKinley noted that at present, the district is paying $2.03 per parcel for the collection of its taxes. Because there are 22,400 parcels of land within TMHD, McKinley said that totals $45,000.

He noted that private firms that handle tax collection charge from $10 to $15 per parcel.

Ward noted that he felt the $2.03 per parcel fee was reasonable considering the cost of postage and materials needed to send out tax bills.

He added that the board has asked its attorney to review the tax collection contract but has not yet received their report. 

Other business
During the meeting, the board also:
• Canvassed the recount the May 12 election and declared Tommy Turner the winner of the Position 9 seat. Turner defeated Jerry Russ in that race by a vote of 347 to 340.
• Selected board officers for the coming year. Ward was re-elected as president; Larry King was re-elected as vice president and Travis Starr was re-elected as secretary. Turner cast “no” votes on the election of all three.
• Discussed the disposition of unused ballots from the May 12 election and indicated that they could be used as scratch papers. However, after the meeting, Turner said that state law requires the board to hold onto the unused ballots for 22 months in the event an election challenge is filed. He noted that under the law, the board would have to account for every ballot should a challenge ever be filed.