Hospital district okays 10% tax cut
|Trinity Standard - Local News
Stories Added - March 2010
Copyright 2010 - Polk County Publishing Company
Trinity Standard -
TRINITY – A 10 percent cut in the 2010 Trinity Memorial Hospital District’s tax rate was approved Monday night and plans were unveiled for a second 10 percent cut for 2011. Based on a recommendation from TMHD’s Long Range Planning Committee, the board agreed to move forward on the tax cut plan. Jim Rippey, who chairs the committee, said the panel discussed two possible tax cut options. The one calling for 10 percent cuts in both 2010 and 2011 was the favored one but they also looked at “Option 2” which called for a 10 percent cut in 2010 and 5 percent cuts in both 2011 and 2012. “Right now the economy is not very strong and we’re still not sure what the federal government is going to do to rural hospitals as part of the health care reform, but we feel we can handle these cuts at this time,” Rippey said. According to figures presented by Rippey Monday night, the district expects to collect about $613,288 in taxes during the 2009 collection year, which is now drawing to a close. By cutting the tax rate by 10 percent in 2010, Rippey said the district would probably lose about $61,300 in revenue. A 10 percent cut in 2011 would reduce their income by about $55,200 for a total reduction of $116,524. The current TMHD tax rate is 18.32 cents per $100 in assessed value. A 10 percent reduction could reduce the rate to 16.49 cents for 2010 and a second 10 percent cut would bring it down to about 14.84. Right now, the owner of property valued at $50,000 (after exemptions) pays about $91.60 in hospital taxes per year. A 10 percent cut for 2010 would reduce that to $82.44 and a 10 percent cut the following year would reduce that down to $74.20. Board members noted that under state law, they cannot vote on the 2011 tax rate until next year. Rippey noted the district can afford these cuts partly because they have pre-paid the next three years of their indigent care obligation to East Texas Medical Center. Under its lease agreement, ETMC operates the local hospital while TMHD owns the facilities. The hospital district also has agreed to pay ETMC $25,000 per month or $300,000 each year for the care of indigent patients. Without having to make the indigent care payments, over the next three years Rippey indicated the hospital district would have less than $150,000 in expenses per year. Tax income generated in excess of the expenses would go into the district’s reserve fund to be used for future projects or emergencies. Board members indicated by the time they again began making the monthly $25,000 indigent care payment to ETMC, they would be able to build up a reserve of over $1 million. Board member Dave Ward said it made sense to begin cutting taxes now because the district has finished financing a number of planned, major improvements to the local hospital. Beginning in 2007, TMHD launched a construction program starting with a new emergency room waiting area which was followed by a major renovation of the emergency room itself. Ward noted that the district used about $1 million of its reserve money to pay for the two phases of the ER work and about $100,000 to improve the hospital’s parking area. In 2008, they were set to fund the construction of the new doctor’s clinic now located on the south side of the hospital. However, in a deal worked out with ETMC, instead of paying for the clinic directly, the hospital district paid $1.2 million into the federal Upper Payment Limit (UPL) program. The UPL program then added a 160 percent match and returned it to ETMC for use in indigent care through out the ETMC hospital system. This freed other money in ETMC for use in the construction of the clinic, which is now owned by the hospital district. Also, with their $1.2 million payment to UPL, TMHD was credited with four years of their contracted indigent care costs. Last year the district continued the improvements by contributing another $800,000 to the UPL program in exchange for ETMC’s agreement to build a new patient wing with 15 private, modern rooms. While the district was not credited with pre-paying any additional indigent care costs with that deal, they did receive an additional one-year credit when they put another $300,000 into the program to cover the cost of adding a surgical suite to the expansion program. The final step in the construction process came last month when TMHD’s board contributed another $400,000 into the UPL system to indirectly cover the cost of adding a new kitchen and dining room to the hospital. ETMC has agreed to include the dietary facilities into the new patient wing/surgical suite construction that is set to begin later this year. Ward noted that since the construction program began, the hospital district has paid $3.8 million and, once the current building project is completed, they will have received work valued at between $9.5 and $10 million. “And $1.5 million of those dollars we would have had to spend for indigent care regardless of any construction. So for about $2.3 million, we will essentially have a new hospital,” he said. “There wouldn’t have been any way we could have accomplished this and reduce taxes without the UPL program and ETMC,” Ward said. Board member Lois Saldana voiced her appreciation to all involved for the changes that have been made at the hospital in recent years. “People who complain about the hospital district’s taxes haven’t been down here to see how we’ve been spending their money,” she said. “I think if they would come take a look, they will be more than pleased.” Board member Carlyn Bluis said the improvement made to the facilities will go a long way toward helping attract new industry and residents to the area. “When someone is looking to relocate a business, the first things they look at are the schools and the hospital,” she said. “Once the construction is completed, this is something the community should take pride in.” She noted that new residents to the area, especially senior citizens, want a hospital nearby in case of emergency. “Right now a person with a $100,000 house pays about $15 a month in hospital taxes,” Bluis said. “People thrown more money away than that on lottery tickets.” As opposed to the high number of complaints about the hospital that were coming in a number of years ago, board members noted that patient feedback is now overwhelmingly positive. “Patient satisfaction is the number one goal of ETMC,” board president Larry King said. “One thing that most people aren’t aware of is that the Trinity hospital was ranked number one in ETMC’s patient polls for a number of months.” ETMC Administrator Warren Robicheaux confirmed that the local hospital was ranked first in patient satisfaction among all ETMC hospital for several months. “We aren’t number one right now but we are still up closed to the top,” he added. Ground breaking set During the meeting, Robicheaux said ETMC will host a formal ground breaking ceremony on Monday, April 26, for the new patient wing/surgical suite. While the start time has not yet been finalized, Robicheaux said it would probably be around noon. As part of the dedication, the hospital administrator said ETMC wanted to honor the Trinity families who worked hard over the years to insure that the local hospital continued to exist. He noted that members of the Gibson family, for example, donated land for a park near the hospital. While some of that land will be used to build a new hospital kitchen, Robicheaux said the park area will be shifted over to include some of the area formally used by the hospital helipad and will continue. “Families like this have done things for the hospital over the years and we need to recognize them,” he said, adding that hospital board members should come up with a list of those who should be included. During the coming weeks, Robicheaux said work will begin to prepare the hospital for the construction work. For instance, the hospital’s existing loading dock will be expanded so that it can accommodate the mobile MRI truck and work on expanding the clinic’s parking lot will begin. In addition, land located north of the current hospital which is now owned by ETMC will be converted into a parking area with an exit onto Pine Valley Drive. “We need to be sure we still have adequate parking for patients and their families once construction begins. Indigent care During the meeting, the board learned that during January, ETMC provided $220,000 in free or reduced cost care. Robicheaux noted that those who qualify as indigent are not required to pay anything while those who qualify for “charity care” are required to pay a greatly reduced fee. In his breakdown, the hospital administrator said six ET patients received about $23,000 in free or reduced care, two out-patients received about $16,000 in laboratory or radiology care and four in-patients received about $180,000 in care during the month.