Maverick County Hospital District Board deadlocked on tax rate

By: Jose G. Landa, Eagle Pass Business Journal, Inc., Copyright 2015

The Maverick County Hospital District (MCHD) Board of Directors held their second public hearing on the proposed tax rate for the 2015-2016 fiscal year as well as the proposed Operating Budget for 2015-2016 on Tuesday, August 18, 2015, resulting in two board members opposed to increasing the tax rate while two others favor a tax rate increase.

MCHD Chief Executvie Officer Terri Contreras-Patlan and Chief Financial Officer Nestor Bonilla advised the Board that the current tax rate is 0.08000 per $100 valuation.  Contreras-Patlan noted that the proposed Operating Budget for 2015-2016 was originally $7,960,871 but after the Board requested a three percent decrease at their first public hearing last week, the new proposed Operating Budget for 2015-2016 is $7,734,,397.

CFO Bonilla presented the Board that if they keep the tax rate at the same rate as last year of $0.08000 per $100 valuation, there is a projected deficit of $578,409 for 2015-2016.  On the other hand, Bonilla noted that if the Board were to approve a tax rate at the maximum allowed without a tax rate rollback election by taxpayers of $0.086675, the proposed budget would have a deficit of $376,849.  Bonilla advised the Board that if they wanted to approve a balanced-budget for 2015-2016, they would need to increase the tax rate to $0104131 per $100 valuation-an amount which may be challenged by a taxpayer rollack election.

Board member Dr. Ronald Hixson stated that he wanted to balance the budget without having to use reserve funds by increasing the tax rate by the amount necessary ($0.104131) to raise sufficient tax revenues to balance it.  Dr. Hixson stated that in the alternative, he was willing to increase the tax rate to $0.086675-the maximum allowed without a tax roll back election.

Board member Ricardo E. Calderon stated that he opposed any increase of the tax rate of $0.08000 and requested the Administration to find additional budget cuts and recommend new innovative revenue programs to assist the district to balance the budget without having to use the district reservess.  Calderon noted that the Hospital Districtt needed to review and renegotiate all existing agreements to find additional savings and revenure increases, including re-examining the District’s agreement with Universal Health, parent company of Fort Duncan Regional Medical Center.

Board Secretary-Treasurer Humberto Duran concurred with Calderon’s sentiment of not raising the tax rate and seeking additional budget cuts and revenue increasing programs.

No member of the public spoke at the public hearing.

After closing the public hearing, the MCHD Board addressed the agenda item no. VII calling for discussion and possible action regarding Operating and Capital Budget  for FYE August 31, 2016.  CEO Contreras-Patlan advised the Board that administration was doing everything possible to reduce costs as  requested by the Board and suggested that the Distirct needed to renegotiate its agreement with Fort Ducan Regional Hospital as well as all other agreements to find additional costs and benefits.

Calderon joined Contreras-Patlan’s comments stating that he previously had requested the same be done and hiring special legal counsel and/or financail consultant to review the Hospital District’s agreement with Fort Duncan Regional Medical Center but the Board had denied his petitions.  Calderon noted that the District needed to implement new and innovative programs to increase its revenues, including an aggressive marketing campaign with other local governmental entities and businesses to recruit more insurance patients, redesign its marketing campaign and strategies, and reviewing and renegotiating all of its existing agreements to increase revenues in order to afford providing medical and hospital services to the needy within the County.

Dr. Hixson concurred with Calderon’s suggestions.  Calderon motioned that the Hospital District retain special legal counsel and/or consultant to review and renegotiate the District’s agreement with Fort Duncan Regional Medical Center while Dr. Hixson seconded the motion.  After discussion, the motion was approved unanimously, signaling that the Board was now willing to review all agreements in order to assist it with its annual tax rate and operating budgets.  Board members Juan Manuel Farias and Humberto Duran also voted in favor, whom previously opposed.

Dr. Hixson followed with a motion to increase the tax rate to $0.8500 per $100 valuation seconded by Farias, but the motion died with the Board deadlocked 2-2 as Calderon and Duran opposed.

Calderon then motioned to keep the tax rate the same as last year’s of $0.08000 per $100 valuation seconded by Duran, but the motion died in a deadlock as Farias and Dr. Hixson opposed keeping the same tax rate and favoring an increase.

The MCHD Board was able to agree on the proposed Operating Budget for 2015-2016 of $7,734,397 subject to approving a tax rate at a future meeting.