Travis County Commissioners Court
August 17, 2004
Item 23
It looks like we've got some members which want to go to the meeting of the hospital board, which starts at 11:00 o'clock. So that's number 23. A is the list of outstanding issues recommended for consideration by the board of managers. One was to change a semi colon to a comma. And that's highlighted I guess on page 2. The final always have to have a draft on them? We do a final after this discussion?
>> yes, sir, we'll submit the final to you.
>> and number 8 was the part that we added. The committee. Ought to be important to add that. We believe it will be beneficial to review and solidify relationships with other health care providers. That's what we call them now instead seton.
>> yes. We double-checked the website to find the correct corporate name.
>> st.david's hospital, that is that the less they do in terms of delivering indigent health care, the more that we must do in this area, so we think it's important for the board of managers to at least attempt to try to lock in that relationship for short and long-term planning.
>> it also also to highlight that those folks need to be consulted. I know that we have been -- we've got a letter, the board of managers also got a letter from ascension in terms of these are the things we see on on the horizon. So they're doing the same things we are in terms of what they think are outstanding issues. It was kind of like an open call for them to make the same kind of requests if they've not done so already of ascension people. And sharing st.david's -- sherry, st.david's with an apos tro fi s.
>> otherwise this ought to be exactly the same as we had it last week.
>> that's right.
>> any other changes or additions?
>> judge, I would move approval of the a, the outstanding issues paing, as laid out.
>> second.
>> any more discussion?
>> yeah, judge, let me ask you a question. I think that i've got the right thing that I got yesterday afternoon. Does this preclude us, what's in here, from -- are there going to be more specifics that we're going to be asking other than what's on these three pages?
>> oh, yeah.
>> this is not -- this is not just -- this is not going to be our Marching orders?
>> no.
>> I wouldn't want to sign off on that thinking you signed off on it and it wasn't in your deal.
>> okay. In my view these ought to include items that are not necessarily on the table right now. We're kind of saying we think you ought to think about all the of these at some point. Some sort term, some long-term. But last time I saw their agenda, it had 20 items on it, didn't it?
>> that's correct.
>> we another they're considering that, budget, reserve amounts being probably at the top of the list. These are unsolicited -- this is unsolicited advice.
>> part 1. [ laughter ]
>> that's why I知 asking the whole court to sign it. [ laughter ] all in favor? That passes by unanimous vote. So if we could -- actually, if we could get this -- maybe get this -- are they meeting tomorrow also?
>> no. I think they want to haul this over to them.
>> they're meeting right now.
>> if we can get it -- you may want to go to my office and maybe somebody up there can make these changes.
>> we'll do it quick.
>> and is this front all right for everybody? And maybe my office can make those changes, eliminate the reference to the agenda item number, take draft off and we're ready.
>> clean it up.
>> b is issues related to independent audit required by health and safety code, section 281.122, with b-1, proablg the most important part of this, contract with maxwell, lock and ritter to perform tax rate verification for Travis County. There were two items that we discussed in committee that I have not done yet. One was to check with the accounting firm and let them know that their contact person with us is mr. Nellis, who is the budget manager of the Travis County planning and budget office. And the other is to get a deliver rabl date. And we need one in time enough for us to consider this during our budget process. And September 8th is the one that we're recommending that they shoot for and try to get to. I would try to get them to agree to that if not during the lunch hour, then certainly after court today. Anything else regarding their proposal? We believe this is about the same contract that they have with the city of Austin. The committee and court believe that it would be better for them to contract with Travis County, a two-party contract rather than a three-party contract. As far as we know, constituent has a two-party contract with them also, right?
>> I guess this is where I知 going to ask susan to come to the microphone. I知 still pretty uncomfortable with whenever I see the word audit, not to mention independent. I mean, are we in your opinion, susan, are we getting the signing off on this audit -- I don't want someone to say, all right, you signed off on an audit, which meant that because we know that whatever the audit is going to give us is most likely, I would assume something that we're going to comply with or buy off on. Where are you with this? I know at one time you and I have talked and i've really done some soul searching on this audit thing. Where are you with this?
>> we disagree with the scope. It is the same scope that the city of Austin is using, and we disagreed with that one. It's inappropriate to call it an audit because it is not. What the scope is called in auditing terms is an independent accountant's report on procedures. That is not an audit, nor will they opine. It's been our opinion all along that they need to look at a lot more. And that's what we thought, we are the minority opinion on that. So what we are agreeing to here is not an audit, but it is an independent accountant's report on independent and complying procedures. So there's just a difference. And my concern was that -- the reading on the law is vague, I agree with that. But I think the legislation intended to be an audit. I think the public intends and in their mind they have an idea on what an audit means. I am concerned that this doesn't meet that vision because it is not an audit. It is the kind of report an accountant can give you, but it is not an audit because it doesn't go back and audit the underlying documents. The opinion that you will get will say -- because there are standard wordings for these things. And it will say we are not engaged to and did not conduct an objection, the objective of which would be to express opinion on compliance. Accordingly we do not express an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been error reported to you. Consequently we make no representation regarding the sufficiency of the procedures described below for the purpose for which this report has been requested or any other purpose. They rely a lot on what is give ento them. So that is my concern. And I have to tell you there's a difference of opinion on that. And I知 not -- I wouldn't say I知 -- obviously I think I知 right or I wouldn't say this, but there are differences of opinion.
>> I don't think there's a whole lot of difference of opinion. I think that at the county we got into the argument exactly as susan expresses it, but the legal opinion is that the law requires a lot less. I don't know that we're in a position to force the city to do it. They seem to be reluctant to ask for it at this point. I think the most we can do is number 4 in these highlights. That is regarding the need to secure a baseline audit of what has been received by the hospital district from both Travis County and the city of Austin and the financial records of both Travis County and the city of Austin, this audit would be in addition to the statutorily required verification audit.
>> and I think that's important.
>> I知 not giving up on it. I知 just saying that I think the board on its own has a right to require a more comprehensive audit, more substantial audit than the statutory audit required by law. I don't know whether I got tired or just gave up on it, but I haven't given up on the district at least trying to secure a field audit before this deal is over. I think in the long run they will need that. So -- I heard every word that was said. We sent over certain requests for a lot more comprehensive information than here, and what we got really was the city's interpretation of what they ought to do based on legal advice they received. Our legal advice is not a whole lot different than the legal advice they received based on the statutory language. There are other laws that come into play that the district can rely on and hopefully number 4 will urge them, to the extent we can, to invoke those laws and get that comprehensive audit done as soon as possible. The only caveat is that audit will cost some money.
>> it will.
>> and so if they say okay, I知 ready to do it. It seems to me that they would have to go to the city and the county to get it funded. In my view we try to figure out what our share ought to cost them and pay for that.
>> believe me, Gerald, I big time have not given up on this and I absolutely agree with everything that susan said. But what the law is telling us related to what is Travis County's responsibility at this particular moment in time, it is a verification audit related to the tax rate. It doesn't say that we're supposed to get an audit on the city of Austin's tax rate. They have to do their piece, we have to do our piece. And I think it is beyond great advice, which I hope the district will take, that a true baseline audit, precisely as susan just laid out there, is indeed out there. Because it's true. The verification audit just tells us we've made the proper deduct off of our tax rate based on the expenditures. They need to know with absolute certainty that everything that we have transferred over is everything that they have coming to them, and from the city as well. The only way that can happen is if the proper folks who are vested with that kind of duty and responsibility, and that's the board of managers. The board of managers I hope and pray demands a baseline audit because that truly is going to get to the heart and soul of everything that susan said. I absolutely agree with susan, but the piece that is incumbent upon us required by health and safety code is 23-b-1. And I look forward to what susan just described occurring, but that will come by the board of managers, who have the right to say we got everything that we're told we're entitled to and everything got transferred as it was supposed to, and then you would have a baseline from that point forward to know that this is ground zero, year one, baseline.
>> so is 23-b-1 going do that for the board of managers?
>> no. This is strictly the piece related to Travis County of what we need to do to show as we conclude our budget rate calculations, excuse me, that we are no longer taxing for certain kinds of things because those revenues and expenditures have been appropriately moved over to the hospital district and it says that our tax rate, our '05 tax rate, does not have anything built into it that reflects taxing for things we are no longer providing.
>> but only Travis County's side.
>> right, we can't make the city of Austin.
>> but the board of managers would have to ask for that. Do they have the resources to ask for such an audit and pay for it?
>> they can ask for it. My guess is the way it's looking right now they will not have the funding. So what we're doing is really just a tax rate verification, which is what --
>> don't call it an audit. I think that's what's misleading.
>> a tax rate verification.
>> period.
>> all right.
>> that's what we posted for.
>> they're not doing an audit either.
>> and what we're doing and asking the board is to get a comprehensive audit. And for the public, the reason that's important is that once it's determined, what the district gets from the city and the county are kind of locked into that forever as long as the district exists. So you can't come back to this point in '04 and redo it. Once it's kind of done, then you move forward. But the audit, that's why you do your audit before you say, okay, everything is all right.
>> and when you do the tax rate verification, and this -- you need to clearly understand, I知 not worried on my side, I truly am not, but what you said is exactly right, judge. Verifying that tax rate assumes that the information provided to the accountant is accurate. They are not going to audit is and make sure it's accurate. It's not an agreed upon procedure. You give the data, here's how you calculate the -- okay. If this is the data and this is what you give us, then this is the calculation and this is the reduction. They're not going to go back and audit whether those -- the numbers feeding into that are accurate. Just so you understand that.
>> well, that's the reason that this makes me crazy. [ laughter ]
>> I know.
>> which is we are predicating something on what -- I mean, what we are asking for, we're predicating it on something that we know that we are not comfortable with signing off on. And --
>> for Travis County? This is just the Travis County piece. And I have absolute faith and confidence in the numbers that susan is going to be giving, and I think she's backing it up with years prior to that as well to know that if there's any kind of question on audit trails, we can only demand and do the piece that is related to Travis County. I get it. I知 not happy with what's going on on the other side of this, but they have to take responsibility for what they are going to sign off on, and I think it all comes out in the wash in a true baseline audit. But this is only for what Travis County needs to do for Travis County's tax rate. It doesn't say that we're approving a contract related to things they're going to perform for the city of Austin. There's a separate contract for that and they're going to have to live and die by that report as well in terms of its verification and accuracy.
>> it states it, the Travis County part. I知 always a little skittish about not just bringing it up, you know, every once in awhile, but in between the papers and the e-mails and everything that we get, it's kind of like get over it. Well, I知 not getting over it.
>> along those iz lines, I do believe, judge, you said something that you have then been surprised at. I believe you will see resources in the administrative section in the hospital district budget for an audit, a true audit, which is retrospectively looking at actuals and identifying those. So I predict the board of managers is going to want to see that in their budget. And I predict the only fussing might be how much money it will cost, but not whether it should happen.
>> it's real important. It's important enough to pay for. This is sort of the minimum tax rate verification for Travis County. We think the law requires this of us at a minimum. I知 not miss speaking, am i, john?
>> no, sir. Just the minimum.
>> and I have said this verbally several times to court members, the couple of board members that I chatted with. There will never be closure on this. You do this audit and come up with findings and even if the findings are not complied with, you have them there of record. Then you can decide what you want to do to enforce them. Then you have a little bit more to fight with, though.
>> all right. I understand that.
>> judge, are we ready to act on this contract subject to the language being added, the contact person in pbo, and there is a September 8th deliverable on the audit?
>> we did chat with them about the 10th the last time we talked with them. I think they'll agree to move it back to the eighth. But the earliest I think they said is the 10th, then we have to deal with that.
>> if we can squeeze the extra two days off, that would be fine.
>> otherwise those two or the ninth in the middle, then we'll have it back on court's agenda.
>> there is some cleanup language that needs to be done on contracts. It's not ready, but you can direct us with the guidance on those terms.
>> I thought they wanted us to sign what they sent over?
>> as I said, there are a couple of things in that letter that are not what I can --
>> will we have those ready this conversation?
>> it's going to require discussing it with maxwell?
>> is it possible to authorize the county judge to sign an audit if it fits within the parameters of what we think are the desires and will of this court with the things we already discussed?
>> if you want to hear what those couple of items are in executive session, i'll be happy to brief out what those are, which is to go through the letter.
>> tell them here are the things we need changed, but go ahead and start working. I think one of the them is ready to start working, right?
>> yes. We come in and start with the auditor's office on the actuals through June tomorrow, provided the court approves the county today.
>> can we take five or 10 minutes over lunch?
>> sure.
>> say starting about 1:15.
>> sure.
>> we're ready for them to come in Wednesday and do a contract.
>> so there's no problem in getting the contract ready this afternoon?
>> it's just tweaking the language a little bit.
>> and we need funding in place somewhere.
>> well, if you -- we can have a budget transfer next Tuesday or have it this afternoon if you'd like.
>> bring back that one item for information this afternoon.
>> we'll bring back the transfer. The problem is what we'll have to do is bring back the maximum because they were showing a range. We'll just have to put the maximum in.
>> a knot to exceed.
>> 23-c is request from board of managers to transfer land, facilities and equipment. Last week I shared with the court the one page that we got from jim collins and actually, it looks like it's equipment more than anything else. And what come has prepared for us is an instrument conveying title of medical services equipment from Travis County to the Travis County hospital district. And this one page will be attached to a list of equipment, I take it.
>> correct. And just a couple of quick issues on this. Jim collins and I were work working on the issue of what warranties would attach to this transfer. I drafted the document to say there were no warranties associated with it. That the district was accepting all the equipment as is, which meant if something doesn't work, then they can't look to the county to repair or replace that. Jim thought the language was a little overbroad. Where we both ended up was if there's a piece of defective equipment, the district should be able to go to whoever sold that to the county or whoever manufactured it and make them replace it or fix it, but they wouldn't look to the county to do that. So it's sort of skip over the county and go to the seller or the manufacturer. So I made that language change in there, and jim is going to recommend to the district that that's acceptable to him from a legal perspective. So I think we're okay on that one.
>> they're telling us it's market driven, right?
>> right.
>> so if it's market driven, I don't know if we can go there. I don't know if all the equipment given over to the hospital district is underwarranty.
>> if the equipment doesn't have a warranty and it breaks down, then the district really has nobody to go to. But if there's a warranty, it will be a warranty against whoever sold it to the county or whoever made it.
>> some of that equipment is brand new. Some of that should still be under warranty.
>> the other issue was currently this equipment is covered by Travis County's property insurance, casualty insurance policy. I talked with dan mansour about this. If title transfers out of the county now, then it's basically left uninsured. So what jim and I worked out was if the Commissioners court will go ahead and approve this document, judge Biscoe can sign it and you will have complied with your end of the deal, which is you have said we here by transfer this or basically offer this equipment to the district, but the transfer won't be complete until the board accepts it and they sign it, which they won't do until they have their own insurance coverage. So if you can go ahead and approve this and sign it, you can check this off your list. You've done what you need to do. And then when the district has its own insurance coverage for this stuff, they will then accept this, the transfer will be complete, and there's no risk of any casualty to the equipment that isn't covered by insurance.
>> how long?
>> that's up to them.
>> [inaudible - no mic].
>> we need a deadline then. We need to give them a deadline then, don't we?
>> what's it paid through?
>> it's renewed the first of December.
>> so we have in exhibit a that we have last week, which is five pages......
>> same exhibit.
>> and we need one of these to give to the clerk.
>> I gave one to the clerk.
>> one signed by the county judge?
>> not yet.
>> i've got those right here, judge. [ laughter ] if you can sign them now --
>> you're ahead of me.
>> if you can sign them now, I can take them to the district.
>> any more discussion?
>> judge, let me -- you know, i've always known that before you start signing up for things and signing over things, we're moving along. I mean, I know this thing passed and I want it to get off the ground and I want it to do what it's supposed to do. But there's a cloud on this title as far as I知 concerned. It's like buying a piece of property or buying anything, and we are moving so fast that, I mean, I知 afraid that our leverage -- because I think that at some point in time we are going to have to just really get down and play hardball over a giant issue, and a giant issue are reserves. So I guess I could just abstain from this because it just makes me nervous. I mean, now we're transferring everything that we've ever had over to this entity. Tom, can you get me comfortable with that?
>> the statute criewting the district mandates that you transfer the equipment.
>> mandates you whether you can operate -- it doesn't make any difference, just do it and then figure out -- that makes me --
>> we also appointed some of the board members. And I知 really feeling positive about them. And that they're going to do the right thing to get the hospital district moving forward.
>> and if there's an asset that we still have, we have not transferred title to the physical facilities. Some of them are leases, some of them are physically owned facilities or split ownership. That's what's really the value. And we've not transferred that over because we're still pending to find out what we need to do in relation to preserving the fqhc status that's held by the city of Austin. This is really the minor stuff. As tom said, it's mandated. We don't have any choice here.
>> I知 are ready to play ball on that other one.
>> I thought we were playing hardball. [ laughter ]
>> i'd like the opportunity for them to get insurance coverage. You said that they have until December first of this year to get insurance.
>> well, what dan was saying was the insurance -- the county's insurance that currently covers this is paid up through December first. So we can basically keep it under that policy until December first and we're not out anything.
>> but after that, then they have --
>> it could affect the premium?
>> I wanted to get it clear.
>> is it possible, because there's lots of things we're doing on behalf of the district, even though the district would pay for it, is that that can be separated out as we go out for a new r.f.p. For the insurance that basically separates out anything that is on our list. And adds to the list that the city is sending on over and the hospital district can piggyback on our bidding process and pay their piece of the premium, right?
>> [inaudible - no mic]
>> we have to do all that stuff, but we've got opportunities here to actually do some good bondogtheir behalf because it's also with everything else that the county has. That's one option.
>> good point.
>> anything else?
>> yes.
>> yes, sir?
>> I just had one last item on scheduling.
>> we did get a motion and a second on that, right? On c, the transfer of the equipment. Move approval.
>> second.
>> seconded by Commissioner Sonleitner. Discussion? All in favor? Show Commissioners Gomez, Davis, Sonleitner and yours truly voting in favor. Abstaining Commissioner Daugherty. Christian?
>> I just have something under d.
>> d is other matters regarding the implementation of the district.
>> just wanted to report at yesterday's board of managers' meeting, which will continue this afternoon, the head of the budget committee proposed a schedule. And I have subsequently consulted with the judge and wanted to share that schedule as proposed, which is to not go forward on the 19th and the 23rd with a budget hearing which would allow a few things to occur. Number one, the board of managers more time to work out further negotiations with the city on the contract as well as to hold a public hearing. So they are proposing on Monday, August 30th, that the board hold a work session on the budget. Then to hold a public hearing on Wednesday, September first. I suggested that it has been our tradition to do that at six p.m., And they agreed that that seemed like a reasonable thing. I知 not sure where that would occur. Then on Wednesday, September eighth, the board would meet to approve the budget. I indicated that there would be nobody from the county's planning and budget office because we would be with the Commissioners court on that day all day on markup. They might approve it after that evening. And then to come to the Commissioners court with a budget that the board has approved on Tuesday, September 14th. I hedged a little, suggesting that that probably would mean a substantial discussion on Tuesday, September 14th. The judge suggested that if we know it in advance, then other business can be put into either a week before or a week after or just consent so that you have sufficient time to deal substantively with the board of managers and their budget as it is presented to you. I, however, suggest that on the 14th that gives you one more day subsequent, Tuesday the 21st. Because then you would be adopting on the 28th, and we really do need it before the 28th. So you have the fourth and the 21st unless you want to call a special work session.
>> so we were talking about maybe talking about the hospital district during our budget hearings. That's now off the table?
>> that's off the table.
>> just making sure I understand that.
>> as a matter of fact, on the 19th, the county attorney took that slot. And the 23rd -- they're not going to be ready on the 23rd. And especially, they want to come to you after having had a public hearing.
>> and they felt very strongly about having a public hearing, needing a little bit more time. Do we need to sign off on that?
>> I don't think so.
>> I think that if they can give us what they have after August 30th or after September first, to give us 10 days or so to review it in preparation for the September 14th meeting.
>> i'll pass along that request.
>> my guess is the minute they have the public hearing, there will be enough media coverage for the public to become aware of the highlights of it. Make sense to me.
>> this afternoon -- yesterday they heard from the county's financial advisor about his research on the credit rating agencies, and they have invited the city to provide their perspective on the question of reserves. And that will happen this afternoon.
>> we will have a presentation from the county attorney's office in executive session under language similar to 23-d. Any reason we should not recess until 1:30?
>> one other item on item 23-d was a memo circulated to the court. I have copies if you don't have it available regarding reporting relationships. And this question surfaced as staff was gathering outstanding issues. So this memo begins the discussion for the court on what types of reporting relationships you would like with the hospital district. Does anybody need the memo?
>> I remember reading it, but if you guys have it, you could get it right quick. How other Commissioners courts interact with their county hospital district?
>> yeah.
>> and judge, Commissioners, as you see there, we found everything across the gamut in terms of what types of relationships exist, so therefore we offered up some suggestions for you to consider or not. The first being item a would be for fiscal year 2005 and every 60-day reporting. And just to kind of give you a sense of what that would mean. If the clock started on the 60 days on October 1st, then their first report to you would be on or about December first, which they could opt for the last Tuesday in November or, you know, the first Tuesday in December. So that would be an example of how it would play out. And then item b would then allow you to consider with them at their budget hearing each year whether or not that reporting relationship such continue as is or make changes.
>> works for me. I think on a start-up year we need to hear -- do you think it ought to be 30 days, christian?
>> no, I think you ought to consult with the board and ask them about how they feel about the schedule and what would be contained in the board -- I知 sensing a board feeling very close and hitting the issues that you have been identifying. And I think they want to kind of partnership with you. So rather than telling them, I would urge to you ask them about the kind of communication channels back and forth, some of them are informal. This is a more formal one. That's why I was opening my mouth.
>> is there a way to nicen up this memo that is like we would like to lock down reporting relationships. What's been suggested is every 60 days to the court. What do you think of that idea and do you have something else that you think is a better suggestion, then we would love to hear it?
>> you have that opportunity with a letter that you're about ready to sign to the board of emergency rooms. You could actually -- board of managers. You could add that we have an item on how we want formal communication back and forth. A suggestion has been made 60 days, what do you think? That's a way to deal with it.
>> that's nicer.
>> a nice letter.
>> okay. I don't want this to get lost in the outstanding issues.
>> I知 sure we will be sending other letters over there.
>> yeah.
>> okay. Do we have a recommendation on how -- do we want the letter to come from the judge or modify this in some way? How do we want to proceed?
>> why don't we mull over it a little while.
>> i'll be happy to, judge. , and while mulling, we'll clear it up.
>> and you may shortly have a hospital district straighter who is going to act as a liaison. Administrator.
>> right.
>> thank you much.
>> we've come to appreciate your ability to communicate directly with the chair of the board.
>> all right.
>> yes, okay. Very good. Thank you.
>> okay. So not act on this at this time.
>> that would be my recommendation.
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Last Modified:
Friday, October 28, 2005 8:37 AM