Maverick County Hospital District Board Deadlock on Election of Officers and Accept 2013 Financial Statements and Audit Late

By: Jose G. Landa, Copyright 2014, Eagle Pass Business Journal, Inc.

The Maverick County Hospital District Board of Directors became deadlock on the election of new Officers for 2014 and accepted the hospital district’s 2012-2013 Financial Statements and Audit late according to State law at their regular meeting held on Wednesday, January 22, 2014, at 12 Noon at the Second Floor Conference Room at 3406 Bob Rogers Drive in Eagle Pass, Texas.

During the Visitor Recognition agenda item, Richard Prati, Chief Executive Officer at Fort Duncan Regional Medical Center, and Joel Morales, Chief Financial Officer at Fort Duncan Regional Medical Center, presented the third-quarter Uncompensated Care report and a summary of community benefits provided by Fort Duncan Regional Medical Center.

Agenda item No. VI.-A regarding discussion and acceptance of the 2012-2013 Financial Statements and Audit by Weaver and Tidwell, L.L.P., Certified Public Accountants, of San Antonio, Texas was approved by the MCHD Board of Directors in a split vote with President Juan Manuel “Chuco” Farias, Vice-President Rito J. Valdez, III, and Board member Joaquin L. Rodriguez voting in favor of accepting the 2012-2013 Financial Statements and Audit while Board member Ricardo E. Calderon abstained because he was not yet a Board member when the 2012-2013 MCHD Annual Budget was approved in August of 2012.

The highlight of the 2012-2013 MCHD Financial Statements and Audit presented by Weaver and Tidwell, L.L.P. was Management’s Discussion and Analysis which states that “The District’s total assets decreased in 2013 by approximately $1,980,000 and decreased in 2012 by approximately $600,000. The most significant change in the District’s assets in 2013 was the District’s cash and short and long term investments decreased by $1,965,000 in 2013 and decreased in 2012 by approximately $1,281,000. The decrease in cash and investments was mainly due to the District’s addition of oncology/hematology, cardiology, endocrinology and orthopedic services. This expansion of services prompted the expansion in the current medical office facility for the District to be able to host these services. Other contributing factors…were the current state of investment rates and the decrease in collection of property taxes….Interest rates were…close to zero return.” The Management Discussion and Analysis added that other factors for the decrease of the hospital District’s total assets was net depreciation of net capital assets, i.e. building and equipment.”

The Management Discussion and Analysis states that “the District’s operating expenses were approximately $2,500,000 greater than operating revenues in 2013 and approximately $2,148,000 greater in 2012. The increase in operating loss is primary due to expansion of district services.” Management also states that “non-operating revenues decreased in 2013 by approximately $730,000 and increased in 2012 by approximately $1,859,000.” In other words, MCHD is sustaining significant financial losses or decreases in the District’s total assets which requires that the District dip into its reserves to pay for these losses. Board member Ricardo E. Calderon asked the Weaver and Tidwell partner what would happen to the District’s reserves if it continues to lose money at the current levels, and he replied that the District’s reserves of $18 Million plus would be depleted or used up in 8 to 10 years. Calderon is the lone Board member that has consistently expressed the need for the hospital District to balance its budget because it is going to deplete its reserves in a few years, but his concerns and observations have fallen on deaf ears of Board members Juan Manuel “Chuco” Farias, Rito J. Valdez, III, Humberto Duran, and Joaquin L. Rodriguez.

Furthermore, Calderon was the lone Board member who advised the Board members present at the December 11, 2013 meeting that State law required the MCHD file its 2012-2013 Financial Statements and Audit by January 1, 2014. Once again, Calderon’s notice to his fellow Board members went unheeded. Thus, the acceptance of the 2013 Audit at the January 22nd meeting is late and in non-compliance with State law by 21 days.

Agenda item No. VI.-B regarding the election of Officers for the MCHD Board of Directors and appointment to Committees for 2014 resulted in the Board tabling the item because of a deadlock between the present Board members on who should be elected to become an officer. Board member Ricardo E. Calderon nominated fellow colleague Joaquin L. Rodriguez to become the new President of the Board of Directors “in light of the Financial Statements and Audit just presented” but Rodriguez opted to decline the nomination. Calderon withdrew his nomination. Then, Maverick County Treasurer and MCHD Vice-President Rito J. Valdez, III, made a motion that “we keep the same,” meaning that Juan Manuel “Chuco” Farias be re-elected as President, Valdez as Vice-President, and Humberto Duran as Secretary-Treasurer. Calderon raised a point of order stating that each position needed to be nominated and voted on individually, not as a group. County Treasurer Valdez then amended his motion to include that Farias be re-elected as President, himself as Vice-President, and Duran as Secretary-Treasurer. Neither Joaquin L. Rodriguez nor Ricardo E. Calderon seconded the motion, prompting President Juan Manuel “Chuco” Farias to second the motion and call it for discussion and a vote, resulting in a deadlock with Farias and Valdez in favor of re-electing themselves plus Duran while Rodriguez and Calderon voted against. Board of Director and United Medical Centers Clinic Manager Humberto Duran was absent for the second consecutive Board meeting, causing the Board to approve a motion to table the election of officers until the full Board is present at the next meeting.

During Agenda item No. VII regarding the presentation of Financial Reports for the month of November 2013 by MCHD Chief Financial Officer Terri Contreras, Board member Ricardo E. Calderon brought to light the fact that the Financial Statements contained a Capital Contribution from the District’s reserves of $170,101 in order to balance or put the monthly financials in the black; otherwise, without the use of the District’s reserves of $170,101 the District actually lost $143,353 during the month of November 2013, which CFO Contreras agreed.

During Agenda item No. XI, The Board of Directors went into Executive Session at approximately 1:35 P.M. to consult with General Counsel Celeste Lira of Brin & Brin of San Antonio, Texas regarding personnel matters concerning employment contracts including the Chief Executive Officer and a Physician, pending litigation, and the sale or lease of the Bibb Street real property. The Board returned into Open Session at approximately 2:25 P.M. for Agenda item No. XII and approved three motions, including the amendment of a Physician contract to allow up to $2,000 for professional licenses and fees, the acceptance of Chief Executive Officer Elcira Bares’ letter of retirement and the immediate advertising of the job opening with the same job description of Bares in local and out of town newspapers and with state and national health care organizations with a deadline to apply by March 7, 2014 at 3 P.M. at 3406 Bob Rogers Drive in Eagle Pass, and the request for bids to purchase the Bibb Street real property and advertisement of said bids with a deadline of March 21, 2014 at 3 P.M. at 3406 Bob Rogers Drive in Eagle Pass.

Following the Open Session, the Board of Directors adjourned the meeting.