Maverick County Hospital District Board approves Tax Rate for Fiscal Year 2016-2017 in split vote, announces another financial loss during 2015-2016 Fiscal Year
By: Miguel Munoz, Eagle Pass Business Journal, Inc., Copyright 2016
The Maverick County Hospital District Board of Directors approved a tax rate of $0.09 cents per $100 ad valorem property valuation for Fiscal Year 2016-2017 in a split vote of 3-1 at their regular meeting held on Tuesday, September 27, 2016, and announced that the local Hospital District suffered another financial loss during the 2015-2016 Fiscal Year for the 15th consecutive year.
The Maverick County Hospital District Board meeting on September 27th started with a legal issue whether the District had provided proper legal notice to the public concerning the meeting as the official Notice posted stated that the meeting was going to be held on Wednesday, September 27th, instead of Tuesday, September 27th, raised by Board member Ricardo E. Calderon and requiring a telephone call by Chief Executive Officer Terri Contreras-Patlan to the Office of the Attorney General for consultation. Calderon noted that he wanted to be certain that the Hospital District had properly posted the Notice of Meeting to make sure that any action taken by the Board at the meeting would not be challenged as null and void by a concerned citizen or taxpayer in the future. The meeting was abruptly placed on hold as the Office of the Attorney General returned Contreras-Patlan’s telephone call and advised the Hospital District that the meeting could proceed even though there was a typographical error on the posted Notice. Thus, the meeting proceeded with the blessing of the Office of the Attorney General.
The Board tackled Agenda Item No. VI-B concerning the discussion and possible action to adopt the 2016 Ad Valorem Tax Rate for Maintenance and Operations. Board Vice-Chairman Ronald Hixson made a motion to adopt a tax rate of $0.09 cents per $100 ad valorem tax valuation for fiscal year 2016-2017, which is effectively a 4.43 percent increase in the tax rate. Board Secretary-Treasurer Humberto Duran seconded the motion. During discussion, Board member Ricardo E. Calderon stated that he opposed the tax rate of $0.09 cents per $100 valuation because the Hospital District had received a windfall of tax revenues of an additional $175,000 as a result of the record ad valorem tax property appraisals for 2016 done by the Maverick County Appraisal District and the District had made no attempt to reduce its operating budget for 2016-2017 like it had done so during 2015-2016 with a three (3%) percent decrease of the budget.
Calderon noted that the record Maverick County Appraisal District property appraisals for 2016 had increased by $184,116,190 Million compared to 2015, creating a windfall of $175,000 tax revenues to the Hospital District for 2016. Calderon proposed reducing the Hospital District tax rate for 2016 to $0.08 cents per $100 valuation or a three (3%) percent decrease of the 2016-2017 operating budget in order to provide some tax relief to Maverick County taxpayers due to the record Maverick County Appraisal District appraisals for 2016.
Board member Calderon stated that the Hospital District’s reserves have been reduced to $17.1 Million and approximately $9-10 Million of that are already committed to the District’s obligations to Fort Duncan Regional Medical Center and its parent company, Universal Health Systems LLC, for the next nine years as a result of the controversial 2000 agreement to sell the County Hospital, leaving the Hospital District with approximately $6-7 Million in its reserves.. Calderon added that the reserves would only be able to offset the District’s annual financial losses for a few more years at the current rate of use, which will require a large tax rate increase in the future to keep the Hospital District operating or closing the District. Calderon noted that his goal is to preserve the reserves in order to keep the Hospital District operating in perpetuity (forever) without raising taxes or closing in the future. Board Vice-Chairman Ronald Hixson noted Calderon was accurate in the financial figures presented and recommended that the Hospital District should deposit the $175,000 tax revenue windfall for 2016 in the reserves of the District as the District has been annually whittling away at its reserves to offset the financial losses sustained each fiscal year.
Board Chairman Juan Manuel “Chuco” Farias stated that would require cutting back on health care services offered by the Hospital District such as the cancer treatment center, which annually loses money but is needed in the community. Farias noted that he may not be on the Board whenever the District’s reserves are depleted and that a future Board will have to grapple with that financial problem.
The Board voted to approve the 2016 Tax Rate at $0.09 cents per $100 ad valorem property valuation on a split vote of 3-1 with Chairman Farias, Hixson, and Duran voting in favor while Board member Calderon voting against, deferring the Hospital District’s financial problems to a future Board.
Another highlight of the September 27th Board meeting was the Financial Report presented by Chief Financial Officer Nestor Bonilla that the Hospital District had suffered a loss of revenues over expenses of $566,066 during the fiscal year 2015-2016, its 15th consecutive annual loss. The Hospital District had a $2,490,773 financial loss during 2013-2014 Fiscal Year and another $2,297,565 loss during 2014-2015 Fiscal Year. All financial losses are offset from the Hospital District’s reserves.
Board member Calderon noted that the Physician Specialty Clinic had a loss of $638,089 during 2015–2016. CEO Terri Contreras-Patlan stated that the Physician Specialty Clinic loss is due to the “poor pay class of patients” including 85% Medicare/Medicaid, Uninsured, and Uncompensated Care, the fact that the Clinic medical doctors take calls at Fort Duncan Regional Medical Center which provides no income to the District, the Oncology Cancer) Contracted Provider Services had to be renegotiated, and use of Locum Tenens physicians. Contreras noted that all Hospital District. Programs were generally operating at a loss. Contreras added that part of the 2015–2016 Fiscal Year loss is attributed to depreciation of the District’s assets.
At a previous Board meeting in the year, Board member Calderon recommended in the Hospital District’s Strategic Plan that the District incorporate a non-profit corporation for the Physician Specialty Clinic and fund it for one year and allow it to become a self-sustaining entity so that taxpayers no longer have to subsidize its annual operating expenses and losses, allowing the Clinic to learn how to balance its budget and financially survive. Calderon also recommended another non-profit corporation for the Oncology (Cancer). Clinic similar to the Physician Specialty Clinic. The Board approved Calderon’s recommendations to its Strategic Plan, but it remains to be seen if it has the will to implement them.
Other agenda items approved by the Board at the September 27th meeting was to provide $2,500 financial contribution to the appeal of the Texas Commission on Environmental Quality (TCEQ)) decision to grant Dos Republicas Coal Partnership a water discharge permit of its coal mining waste and storm waters into Elm Creek and Rio Grande before the Texas Supreme Court in solidarity with the City of Eagle Pass, Maverick County, and concerned Maverick County farmers and ranchers.
An agenda item to revise the Hospital District’s By-Laws was tabled to its October 2016 meeting once new Board member Adolfo Olivares, Jr. is on board.
Under Executive Session, three agenda items were considered, including the Uncompensated Care Agreement between the Maverick County Hospital District and Universal Health Systems/Fort Duncan Regional Medical Hospital, the Maverick County Hospital District Medical Office Building, and the Maverick County Hospital District Advisory Board with Fort Duncan Regional Medical Hospital. Upon returning into Open Session, the Board took no action on these three agenda items.
