Travis County Commissioners Court
May 3, 2005
Item 6
Number 6 is to consider and take appropriate action on the following: a is a request from the Travis County hospital district to amend the district's f.y. '05 budget and recognize additional revenue and an equivalentment of additional related expense. And b is to receive an update on Travis County hospital district activities. Good morning.
>> good morning.
>> I just don't recognize you with your old glasses. I知 so thrilled you can see without them.
>> thank you. It's nice to be here and to see you all. Judge and Commissioners, I知 clark highdricw with the Travis County hospital district. With me is patricia brown, the newly appointed administrator of the district, and tom young another member of the board and chair of the budget and finance committee. We've got three items. One is a technical amendment to our budget. Second is a general report on the status of matters. And then third is a status report on senate bill 1677 that you may either want to take while we're in this section or you may want to take it in your legislative session, whatever you choose to do.
>> okay. Let's take it as far as this item.
>> keep it all together.
>> if it please the court, the first item would be the amendment to the budget. And I think trish is going to take that.
>> I believe you have in your backup agenda materials an explanation of the requirements and necessity for this amendment. This does basically represent a technical amendment to our budget to recognize the -- both the inflows and outflows of moneys that the district is receiving and turning around and paying to other entities. The primary reason for this amendment -- obviously two primary reasons. The initial is probably not a fully understood -- full understanding of the nature of the inflows and outflows of money related to the district back in August of last year when this was being put together. And then also larger than estimated actual payments, actual receipts of revenues that in turn do get paid to seton and to other entities. So this does not reflect any additional -- the recognition of any additional revenues to the district itself. This represents -- I might speak of it sort of like a grant concept where moneys are coming in and then being turned around and paid out to others. But this does give us the appropriate line item dollars to effect the expenditures that we need to make to other parties.
>> did y'all discuss this with planning and budge senate.
>> yes, sir, we have. I've had discussion with christian smith and also our discussions with the auditor's office sort of led up to our decision to make this amendment so they are in agreement with the process that we are following and agree that the amendments are required.
>> none of them had any issues?
>> no, sir.
>> okay.
>> [inaudible] where are we in terms of the status of the last chunk of change that Travis County is going to transfer to the district? Is that going to be happening during this fiscal year? Where is our reminder thing? I know we were waiting on what was happening with our hava he electric grants and we've got -- election grants. We've got initial good news on that. Although it's part of the district's activities. At what point do we finalize our last contribution?
>> well, from a budgetary standpoint, the district had budgeted for that remaining payment to be received in the next fiscal year.
>> got it.
>> but there has been some discussion I should say that that payment could in fact occur this year. It would be at the pleasure of the court.
>> so we've paid what we told you we would pay you for this fiscal year and the rest is kind of discretionary.
>> uh-huh a move approval of a.
>> second.
>> discussion? And that is the budget to reflect additional revenue and equivalent amount of additional related expense. All in favor? That passes by unanimous vote. With Commissioner Davis temporarily off the dais.
>> we would like to spend just a few minutes giving you a very brief overview, very high-level overview of where the district is to date. We're about six months into our fiscal year and like to report that from a budgetary stafpt and a fiscal projection at year end, we do expect to receive more revenues than we had budgeted that essentially relate to receipt of additional upl payments and additional tobacco settlement moneys. Additionally do to ms. Mary may's good stewardship our money we will be receiving interest greater than budgeted. We're looking at all those being positive to our bottom line. From an expense standpoint, on a contract you'll paeupltsdz, all are expected to be on time. With regard to our operating expenses. The district is expected to be under budget for the year. The timing which it took the district to get up and running. There will be a positive bottom line greater than budgeted which from the district's perspective in reaching the initial established reserve goals will enable it to achieve that by the end of this fiscal year.
>> more revenue and less expenses.
>> I think that's a good trend.
>> Travis County has been a real good mentor for you. [laughter]
>> the various departments have been very helpful and helped up save money.
>> very, very helpful.
>> notice we said the word reserve and people's hair is like flying up.
>> we did have this -- we just finished this technical budget amendment. Hopefully that will be all that's necessary for this year. We've at this point hopefully anticipated everything we can at this point. Programmaticly, I believe that you may be aware that the district did grant funds to project access to further their services and also to expand. And the district is in the process of considering a number of other requests that have been made. That range anywhere from funds to mhmr for pharmaceuticals to special expenditures for mental health services and additional primary care services. So those are all part of a pr- s.that is underway -- process that is underway which will actually from a strategic planning process will begin this coming weekend. The district is -- has scheduled a retreat. That will be half a day on Friday and all day Saturday which will give the board an opportunity to sort of share thoughts and ideas on both the short-term and long-term planning basis, where does the district need to head. From that effort, we will -- can kick off a strategic planning process that over the months will end up in a full-blown plan sometime later in the year. And as part of that to recognize the -- both the wishes of the district board and the Travis County Commissioners and also sentments expressed by city council when the district was created was to establish an advisory group of members who have been very much involved in creating the district. And so we are in process of developing that community stakeholder group. We talked about budget for this year, and things are looking good from that standpoint. We are in process of coordinating the budget calendar for the upcoming fiscal year. And our budget preparation process is ongoing. We are working on estimates of final year-end numbers for this year as well as a base budget for next year from which point we can consider enhancements for expenditures. One of the items that we will be looking at, of course, is the consolidation of the urban and rural m.a.p. Programs much like we are singlely operating the clinics now. From an operations perspective, the district has established its headquarters at the cesar chavez building which they took possession I believe in December of last year. And so I am in process of establishing that building as headquarters. We are -- held our first meeting there in April. And plan to do that on a once a month basis in addition to holding a meeting here in the Commissioner's courtroom. And I can report very happily and successfully transitioned our accounting services from the county auditor's office. They have been fabulous in helping us transition and giving us all the records and working with us and particularly me, bringing me up to speed what has been going on, how things have been established and we've been able to use their processes in setting up the district infrastructure. I cannot say enough good things about how they've helped us out and the work they've done thus far has been tremendous in keeping the district up to date and moving forward. We do continue to receive services from ms. Mays in the cash investment office and treasurer's office and continue to work with the county auditor's office -- or attorney's office and other members of purchasing and ms. Perez has been wonderful in bringing -- giving me information and helping me figure out how things work and how we can set things up best for the district. We have engaged our external auditor so we're on track to meet the county's audit requirements and deadlines for this upcoming year. With that, I will turn it over to mr. Highdrake to discuss our legislative bill. Are there any questions I can answer for you?
>> I may just kind of lay this at a good segue. You and I visited about this earlier this week and it has to do with the what if, house bill 470 does pass, which is the massive reorganization that could involve mhmr. And the point was brought up during our conference of urban counties luncheon about if people are thrown into those large 30-county service areas, which would some of the local entities, a city or county, as in Austin and Travis County, continue to throw dollars into something where they would see their dollars be diluted if it actually goes to a 30-county service area as opposed to a contribution right now that stays in Austin-Travis County. And the thought was whether you -- there are further exchanges and shifting and transferring of tax base to the hospital district and then the city and the county might stop taxing for that. And that would give you kind of a base to go with related to mental health and kind of get knew the mental health [inaudible] whereas right now you've got good plans and you want to head in that direction, but it's really been in its infancy and I know judge herman has a great interest in that. I was wondering whether that's part of the topics for this weekend.
>> definitely part of the topics for this weekend and the retreat, sort of what our role in mental health is. Part of that will be shaped by our own feelings. Part of it is going to be the collaboration that develops with the county looking at jail-related issues and the overall initiative that I sense is developing. How we fit in that and how we've become part of that team.
>> there's just so many unknowns on house bill 470 as to whether it's even going to make it, but if it does, if the local assistance that we want to provide, how do we have a better insurance that perhaps it stays local, and maybe the good stewards would be the hospital district in the same way that we shifted and stopped taxing to do certain things and invested our authority in hospitals.
>> you have just handed us something.
>> yes, sir. This represents to what is now senate bill 1677. You'll recall we were here a month or six weeks ago with that legislation, discussed it in some detail and you all voted to support it. It was introduced in both the house and the senate. After it was introduced, it has passed each of the senate committee and the house committee that are applicable, and it was determined, I think, by the county attorney's office and our legislative counsel that we needed to make an amendment or some amendments to it to deal with the insurance issues. You'll recall that one of the aspects of the legislation emanated from some meetings that the county transition group which began to meet in June of '04 right after the referendum creating the hospital district passed, was to add to this legislation a provision that would give the possibility if the county Commissioners court and the hospital district board of managers decided together that it was the right thing to do. And I don't think anybody has decided that, but to create the possibility that district employees could participate in the county health plan. One of the problems that we've been experiencing, oddly enough, we're the cobbler whose children have no shoes, is how -- with such a small operation as we have to get affordable health insurance for our people. And one idea was that we might have our employees tkpwraopd in with the county. There were some technical issues that were raised. The county attorney's office working with our legislative counsel came up with some language that was in the form of an amendment that is the last page of the handout that i've handed to you there. That has now been introduced with the legislation in the senate and the senate has passed senate bill 1677 yesterday, I think, with that amendment. There was one aspect of the amendment that the county attorney's office suggested that was not included in it, and that was that the participation by hospital district employees be limited to, I believe, 25 people taken that those people -- and that those people be administrative people. And I think that is reflecting some concern that if we were to go that high, it would be because we would have employees who would be health care workers, we would be operating something, those people might have a higher expense profile in some way. And that that might create some problems for the county. Our thought about it is it's highly unlikely if we ever had 25 employees that we would want to have them be part of the plan. We would be big enough to where we could do our own thing. But our thought and our legislative counsel's thinking was we ought no limit the discretion of the court and the district; we ought to keep as much flexibility in this as possible. That's why that language didn't go in the amendment and it passed the senate without it. We're here today to discuss it. If there are concerns from the county attorney's office or from the -- from the dais or from anyone else at the county, we want to work that out. The health insurance aspects of the bill were not central, frankly, to the reason why we thought we needed the legislation. If in the end you all have concerned about this legislation, we'll attempt to address it in the legislative session either through what passes in the house or whatever we can do. We want to be sure that you are comfortable with it. But our thought was that we wanted to preserve as much flexibility as possible. And so we just wanted to discuss it. I called the judge last week and he suggested we just come down and talk about it, figure out what the right thing is and do that. So we're here to do that.
>> did we retain the ultimate discretion, that is, to say no to the participation, period?
>> yes, sir. The current bill as it passed the senate gives you all the right to say no or condition the participation by any hospital district employee on whatever you want to condition it on. So we're just trying to create flexibility. We don't know whether we're really going to end up doing this or not. We just wanted the most pwhrebgs lieve approach as possible.
>> our concern with -- I知 dan nansur with hrmd. Our initial concern was limiting eligibility due to the fact some employees working in the health care side may eventually transition over to be district employees. We felt that was exposure to our self-funded plan that we feel shouldn't be there. We don't disagree with covering the district employees, it's the health care provider employees.
>> well, the way I understand the bill now is that if that were to happen or they would come and ask that we cover those employees and we decided that it would be disadvantageous to Travis County, we would simply say no.
>> that is how it is written. That's my understanding is whether or not you want to assume that -- that decision-making or to have it legislated.
>> well, if you -- I知 sorry. If you -- if you tinker with legislation that seems to be flowing smoothly through the system, you really open your door to uncertain risks. So at some point I guess you measure the benefit. And seems to me that if this seems to be headed toward passage and enactment, then maybe the best thing is just to make clear to the district that you understand that if we are asked -- if we ask to make this decision, at that point we'll weigh all the circumstances and it may well be that we have to say no for the reasons that you just gave. If as long as we proceed with that understanding, then it seems to me that this late in the session, the best act may well be let it just go ahead and keep moving.
>> we certainly understand mr. Mansur judgment and appreciate all his other help to the hospital district. And we would proceed with the understanding that if he thought it was unwise for the county for any of our people to participate in the plan and you thought it was unwise, we wouldn't expect you to have the people participate. We expect the district to pay the cost of its people's health insurance, whatever that is. But if -- if you and your people conclude that it's not wise to do it, we don't expect you to do it, we're not going to ask you to do it.
>> the way I understand what dan is saying, because as we try to -- as we strive toward being self-funded, it was a struggle to even get there. And, of course, exposure to that self-funded mechanism where it may jeopardize the persons that are within that configuration that exists now is something that I don't think we need to go into. I guess my question to you is as the hospital district, what other alternative situations have you set up to provide health care coverage other than those situations that would be excluded from health care coverage that Travis County would have to offer? Have you all looked into that?
>> yeah, I知 tom young, chairman of the finance and budget committee of the district. And i've been kind of spearheading the efforts to secure health insurance coverage for employees. We are not able to even enter in discussions about an employee plan. We can certainly get individual plans, until we have our second employee. At that point there are a number of ways in which we can start getting into the small group market. Right now with trish what we're doing is that she has cobra continuation benefit fits from a previous employer, and we are meeting our obligation to cover her by compensating her for the cost of a cobra coverage. That's not a very attractive thing to do when you start hiring other employees. And so what we are -- what we are planning to do is to pull the trigger on getting bids for coverage. Once we get our second employee and we can give census information to the -- to the respective insurance carriers. The -- the overhead cost when you have that small of population and the coverage opportunities are very difficult. Once we get to -- and depends upon who you are talking to, which organization, once you get to 10, 12 or 15 employees, then our options expand considerably. And so what we are currently -- what we're currently planning to do is once we have the second employee on board, then we've got the opportunity then to entertain proposals for small group coverage. What we've talked about with the people that we have had conversations with would be that any program that we would enter into would have a provision that would specify that once we head a threshold, 15 employees, we'll say, then the entire insurance arrangement would be revised and reconsidered because we would have better, more advantageous coverage. If we did what is involved in the legislation, that would simply give us another avenue and probably a more attractive avenue to get to that 10, 15 or 20 employee platform and give us -- it would just be a transitional issue.
>> I just wanted to bring up the concern because I know other districts probably deal with the situation different, [inaudible] that is, and of course I don't know if they figure that for county stuff.
>> they really would have had to because they -- most of those districts or pretty much all those districts have a substantial number of employees. And so they have the ability to go to the market either as self-insured employers or fully-insured employees and get -- employers and get group coverage.
>> April bake we are the auditor's office. We just wanted to put kind of a reminder note in here with regards to that legislation, and it was kind of cyd's idea if you'll recall when we were first talking about the district and bringing the district up, and this problem was identified, and the way the legislation was kind of set up was simply -- similar to what we had with cscd. And so it just gives us an option. It's not a requirement. But it is -- makes it a more flexible option for both the hospital district and for us just to be able to carry them because they are a very small set of numbers.
>> plus, this is an area that seems to me changes every year. At the time the request was made, we were forced to review all of the relevant facts.
>> right.
>> and then respond to the request based on the facts. And what I know too is that there are others whose health costs are much less than ours, but it may well be that ours is the best available for the district at some point. And so at that point I guess we have to ask what's best for district and Travis County.
>> right. I知 not making a value judgment on that, I知 just kind of giving you a little history of the background of the legislation, the intent of it was is to provide an option. It's not unusual for counties to do something like this because obviously we did provide this for cscd even though they are not a county entity. I believe the flood district in harris county also has the statutory option for doing this so we just felt it made for a nice oplgs.
>> at least for the foreseeable future y'all are going to be contracting out for the stuff you need and that group there's concern about in terms of health care workers and there's some advantages to you guys sticking with the city of Austin being the person that you contract with for all of that activity. And certainly the other things that you contract for, mr. Collins' service and the county attorney and harvey, they are on our insurance. You are contracting your way to get there and for the foreseeable future it's trish and maybe a couple more, but it's not really something -- I think this has the flexibility for us so say yes and it has the flexibility for us to say no and I agree with the judge, at this point in the session, we ought to let maximum flexibility move through because we may have some unintended consequences by limiting our option and I don't think we have a problem at least in the next two years. We certainly have the option of going back to the ledge in a future year if we see a need for that. But I知 one for maximum plex bility. I don't think we have a problem with that.
>> ms. Wilson, are we missing something?
>> no, sir.
>> 10 years from now we may be trying to get the district to accept a thousand or so of our employees.
>> no unintended consequences.
>> because we do want to support the district, but at the same time we need to watch out for the county.
>> [inaudible] just to convince this court that we ought to say no.
>> to inform the court.
>> anything further?
>> no, your honor.
>> is this going to have to go back to the house side, clark? What's going on now?
>> yes, it is --
>> go back through the house committee. It would be helpful if you are comfortable passing a resolution in favor of the legislation as passed by the senate.
>> 1677 in its current form so there's no question on the house side, then the Commissioners court agrees with us.
>> second. Any more discussion? All in favor? That passes by unanimous vote.
>> thank you very much.
>> thank you all very much. Appreciate it.
>> have a good retreat.
>> ms. Mays.
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Last Modified:
Wednesday, May 4, 2005 10:33 AM