Maverick County Hospital District Board split on Tax Rate for 2015-2016
By: Jose G. Landa, Eagle Pass Business Journal, Inc., Copyright 2015
The Maverick County Hospital District (MCHD) Board of Directors held their first public hearing on the 2015-2016 proposed tax rate on Wednesday, September 9, 2015, reflecting a split among Board of Directors on what the 2015-2016 proposed tax rate should be the current 8 cents per $100 valuation or the previously approved once cent tax rate increase to 9 cents per $100 valuation.
During the opening and calling of the September 9, 2015 Board Meeting, self-appointed Acting Chairman Juan Manuel Farias incorrectly stated the wrong date of the meeting by referring it to September 3, 2015 instead of September 9, 2015. No one seemed to have noticed Farias’ error as no one objected or corrected him.
“This meeting of the Maverick County Hospital District comes to order. Today is September 3, 2015 and it’s a public hearing,” said Acting Chairman Juan Manuel Farias.
Farias opened up the first public hearing on the proposed tax rate for 2015-2016 by asking if there was any member of the public whom wished to speak. Only two citizens attended but neither chose to speak at the first public hearing on the proposed tax rate.
At a special Board meeting held on September 1, 2015, the MCHD Board approved to raise the proposed tax rate by one cent from its current 8 cents per $100 valuation to 9 cents per $100 valuation on a split vote of 3 to 1 with Board members Farias, Duran, and Ronald Hixson in favor while Board member Ricardo E. Calderon voted against increasing the tax rate. Thus, the MCHD Board approved a proposed tax rate of 9 cents per $100 valuation for 2015-2016 at this meeting.
However at the September 9th First Public Hearing on the proposed 9 cents per $100 valuation tax rate, MCHD Board Secretary and Treasurer Humberto Duran requested that he wished to make a public comment as a taxpayer and citizen concerning the proposed 9 cents per $100 valuation tax rate increase previously approved by the Board and himself.
“Even though we already voted to approve the proposed 9 cents per $100 valuation tax rate for 2015-2016, can we negate on it, reverse our vote,” questioned Duran.
“At this point, this is what we’re doing, giving the public an opportunity to express their concerns,” replied Farias to Duran.
“I have a concern and I think I just better voice it. Basically, after the last meeting, I’m going to echo what Mr. [Ricardo E.] Calderon stated, the current budget should’ve reflected more cuts. It needed to be, that’s why he advocated not voting for the proposed budget and proposed tax rate increase. He has been saying this all along for the past two and a half years. I now see it. In the past we had a nice substantial amount of money in the bank that we could draw on to balance the budget. Now, it’s trickling down to the point that, it’s becoming a reality, that if we don’t protect that money, soon we’re going to have to raise taxes, possibly five cents or ten cents to balance budgets. And, that’s no way to operate a business,” said Duran.
“I think we need to have a balanced budget. I hope that when we have an opportunity that we make a motion that we don’t draw down any more of that money in our reserves. I will make that motion that we don’t draw down and if we have to reduce wherever we have to reduce then we will reduce it,” added Duran.
“And, we will give a directive that the budget is adhered too without having to draw from the reserves,” added Duran.
Board Secretary and Treasurer Duran publicly acknowledged that fellow Board member Ricardo E. Calderon’s opposition to using the Hospital District’s reserves to balance their huge annual budget deficits approved by a Board majority, including Duran, were wrong. Calderon has been a strong advocate for the Board to approve a balanced budget each year instead of approving deficit budgets funded by the District’s fast dwindling reserves.
Although Duran has approved the use of the District’s reserves together with fellow Board members Farias and Hixson and past Board members Joaquin L. Rodriguez and Rito J. Valdez, III, for the past six or seven years, Duran has finally realized that their past decisions were unwise and that Calderon’s warnings to the Board during the past two and a half years have been correct. Duran admitted that he had been thinking about the District’s budget and proposed tax rates with the use of the reserves to balance a projected over $500,000 deficit for 2015-2016 and that he now finally understood Calderon’s arguments to be correct and sound advice. “I guess that I am a late bloomer” and now understand why Calderon has been voting against our past deficit budgets, use of the reserves, and proposed tax rate increase for this coming year.
Acting Chairman Farias then proceeded to close down the first public hearing with Duran being the only one addressing the Board.
The MCHD Board of Directors then moved on to agenda item No.6 which called for possible action on the proposed tax rate for fiscal year 2015-2016.
MCHD Chief Executive Director Terri Contreras explained that agenda item No.6 had been placed just in case the Board had a different tax rate to propose other than the previously approved 9 cents per $100 valuation.
“At this time we have a tax rate from $0.800 per $100 valuation to increase up to $0.900 per $100 valuation,” said CEO Contreras.
Contreras and the MCHD Board of Directors then discussed details into what would take place if another tax rate would be proposed and if it did or didn’t pass including rollback tax rate procedures available to the public to call back a tax rate above the allowed percentage.
“If we had the public that wanted to make sure that we do not increase the tax rate to the $0.900/ $100 they would need 10% of the voters registered in our county.” said Contreras.
Board member Ricardo E. Calderon then questioned if the tax rollback petition required either 10 percent of the total registered voters or 10 percent of the total number of voters at the last Maverick County election.
MCHD Finance Director Nestor Bonilla then intervened. “It’ll be 10% of the registered voters.” Answered Bonilla “You’re talking about 27,000 which would be 2,700,” said Duran.
“I’m reading it exactly from the State,” replied Bonilla.
“If the tax rate adopted by a taxing unit imposes taxes for M&O of less than $5 million, in this case we’re picking up $2.1 million the signatures of 10 percent of the registered voters in that taxing unit are required on a petition. That’s what it said,” added Bonilla.
“A petition must meet specific requirements. It must state that it is intended to require an election to reduce the tax rate for the current year. If the tax rate adopted for the current year by the taxing unit imposes maintenance and operations (M&O) taxes of $5 million or more, seven percent of the registered voters shown on the most recent official voter list must sign the petition. If the tax rate adopted by a taxing unit imposes taxes for M&O of less than $5 million, the signatures of 10 percent of the registered voters in that taxing unit are required on a petition. 4 Signatures collected by a paid person are valid,” according to theTexas Comptroller of Public Accounts said Bonilla.
Board member Calderon then made a motion to keep the current 8 cents per $100 valuation tax rate for 2015-2016 instead of the one cent tax rate increase approved by the Board to the 9 cents per $100 valuation. ” I I would like to make a motion that we actually propose a tax rate of not $0.900/$100 valuation but that we keep it at our current rate of $0.800/$100 valuation, that’s my motion,” said Calderon.
“I will second that motion,” said Duran.
Farias then called the motion for discussion.
MCHD Board of Trustee Ronald Hixson then asked how would they be addressing the issues being seen in the budget.
“We just have to go through our budget line item by line item and we’re going to have to make some cuts, to balance the budget,” replied Calderon.
“Didn’t we go line item by line item,” asked Hixson.
“Not that I’m aware of, we didn’t go line item by line item,” said Calderon.
Hixson then brought up the 3% cut being proposed.
“We (the Administration) actually did the work of going line item by line item.” answered Contreras.
“Not the board.” Added Calderon.
The MCHD board then proceeded to discuss what would be minimized in services under cuts being considered.
“Did you look into the possibility of reducing some of those services and possibly revisiting them in the middle of the year and seeing exactly where we’re at and then draw down if necessary ?” asked Duran.
Duran explained in detail as to how it could be set to minimize services accordingly but not shut down programs which would help in bringing operational cost down thus helping out in the MCHD being able to balance a budget.
The MCHD have not had a balanced fiscal year budget in over 14 years.
Hixson asked under the proposed cuts established or any other proposal how much staffing would be lost.
Contreras noted that due to certain circumstances that even though it was not planned, there might be a draw back on providing Oncology services.
Also the opening of other health care providers in our community, we’ve lost a lot of staff.” added Contreras.
Hixson then asked Contreras if she could specify the increased amount in salary that was given too, two certain current MCHD staff members.
Contreras then stated that information had been shared with the Board and that she wouldn’t want to discuss it publicly because it wouldn’t be appropriate to speak on such issues publicly.
“The issue is there have been substantial increases to two people and they are very close to you.” Said Hixson.
“I question that might be getting in the way of your ability to see through some of the problems. At this time we’re trying to cut back and to give people substantial raises seems to me to be inappropriate. “ added Hixson to Contreras.
Farias and Calderon both advised Hixson and the Board that such issues of personnel would be discussed in an executive session with legal counsel and could not be discussed in open session.
“I think that the board should not go into any personnel issues. We can generally discuss the budget per say, but not any of our employees by name and we should refrain from that. “ said Calderon.
Calderon suggested that those issues be addressed appropriately perhaps once they are set in the correct executive session procedure at a future Board meeting.
“I think we can’t legally delve into personnel issues in open session, otherwise as a board we’ll get into trouble with the law.” Added Calderon.
Farias called Calderon’s motion to set the propose tax rate back to $0.800/$100 up for a vote.
The motion died on a split vote of 2 to 2 with Calderon and Duran in favor to keep the current tax rate of 8 cents per $100 valuation while Farias and Hixson voted against and to keep the one cent tax rate increase. The motion failed for lack of a majority.
