Travis County Commissioners Court
June 26, 2007
Item 22
22. Discuss Travis County healthcare district budget overview for fy '08. How are you doing?
>> thank you,.
>> thank you.
>> good afternoon, chairman.
>> how are you, your honor, I'm no longer chair.
>> [laughter]
>> I
>> [indiscernible]
>> [inaudible - no mic]
>> well, thank you, I'm trish young president and c.e.o. Of the Travis County health care district, mr. Clark hydrick former board chair is with us this afternoon. We wanted to spend a little bit of time going over for you for the process that we are preparing our budget this year that we will be bringing to you in early August for your consideration. We wanted to take this opportunity to share some information with you about the district's activities to date, what we have been working on, our progress towards our goal. We want to talk with you about the process that we are undergoing in terms of the actual development of our budget. Very similar to prior years. We want to talk a little bit about considerations for the development of our base budget or I think that you offer refer to in your budget as maintenance of effort. Some increased service level considerations that are under development right now and will be considered by the board of managers. I wanted to talk with you a bit about the transition that's going to occur with -- with the transfer of clinic operations and employees from the city to the district and the planning that's underway and the activities that will have to take place in next fiscal year and later fiscal years to affect that transition. Talk a little bit about revenue and tax rate considerations, which I know that you've had some of this dialogue on your own, by your own due process. Next steps with dates around, when we will be coming back to see you. Starting with where we started in our first fiscal year, which began October 1st of 2004, ended September 30th of 2005, we have increased our health care service expenditures thrksz those dollars directly for the delivery of health care service from 62.2 million in the first fiscal year to 72.5 million for the year that we are about to -- the year 2007. So we have seen a total of $10.3 million increase in the direct funding for service delivery. I thought it might be a -- a nice walk down memory lane. You had shared with the board of managers a memo in August of 2004 when the board was appointed and had a number of considerations that you asked the board managers to think about. I did put a copy of that memorandum in your package and you should -- you should have that with you. It is -- it is interesting to look back upon it and see the progress that we have made towards those considerations. There were a total of 8 I believe. And the first four really had to do with some start-up items around the initial creation of the district which has been addressed. There were two items that addressed the concept of developing community relationships, ongoing communications with constituencies such as the stakeholder group that helped create the district, the various providers in the community. There was one consideration regarding the establishment of adequate reserves and we have addressed that through our budget or our reserve policy that the board reviews annually. And then on the 8th consideration had a whole list of items that you wished the board of managers to think about and address in their planning and activities in the coming years and that -- a number of those things have actually been addressed. So far. There was one consideration of the development of acute care clinic at brackenridge. Which we actually did undertake and establish this fiscal year, the urgent care center at brackenridge. Some of the -- I'll just highlight a couple of them in terms of addressing the need for additional legislative changes to our enabling legislation, which we have accomplished in the two sessions that -- since we have been in session or in place. So -- some efforts around developing mental health services and adding some of the gaps in mental health treatment. And I won't go through the list, but I think that it's there in that original memo, you could scan that at your leisure. One of the things that did I think that memo ended up was the development of a long-term plan to address the needs that have been identified in the community. And I think that you will recall that we did go through a year-long strategic planning process that we completed this past January, January of 2005 or excuse me 2007. And upper part of that process, we brought to you our initial findings and recommendations and then the board of managers did adopt the final plan that addressed six major areas of focus in terms of goals for both -- for the district and that included goals around gaps identified in primary care, specialty care and mental health care. Goals that focused on the efficiency and integration of the delivery system, trying to make the system function better so that the investments that the district is making is actually netting more care for the individuals that we serve and for the community. We are focusing on the redesign of the medical assistance program and again that was one of your considerations in the memo of August of 2004 which talked about addressing the -- establishment of a long-term indigent health care delivery plan for the community. Then of course matters around regional health care and trying to work with our neighboring counties in -- who we cross borders with and share patients with around the effective delivery of health care. Also along some -- some I would say opportunistic efforts around trying to shrink the problem the uninsured and figure out better ways to deliver care in the community. Without going through a lot of detail about the strap, I think that it's a useful exercise to share the guiding principles that helped to guide the develop of that plan. That is listed on slide 6. Those were to use the mission of the district, which includes enhancing health status of all Travis County residents as a guide for our goal making and our decision making. Another was promoting an integrated health care system transparent to consumers, providers who provide service to patients, as well as the taxpayers in how we deliver service, how we finance those services. Another principal was approve access of quality health care services in a more transparent and easily accessed system. I think that's something we all -- this system seems like a labyrinth at times, trying to work on that and making it easier for the patient. Improvement by time patients for health care services. Measurable performance. That's where we use our own dollars to directly pay for service. Where we are working with others in a leverage situation in learchling their dollars. But we forces ourselves into measurable performance. Try to measure it, we have accomplished that through our objectives. We want to advance the integration of the Travis County health care system. An underlying goal of everything that we do, the work that we do with the indigent care collaboration. The work that we do in figuring out how we are going to work with each of the providers that we have relationships with in the system. How we make services more transparent. Information more easily
>> [indiscernible]
>> [inaudible - no mic] fk the last one, we have never forget about our regional solutions and again trying to make quality affordable health care available to all residents of central Texas, you know that health care delivery does not observe county boundaries. A few statistics that I would like to share with you, I think these are important and some that we have talked about in prior discussions with you. In terms of the district health care programs, from fiscal year 2005 to 2007 we have seen -- created direct expanded arkdz to patients in the community. Our total enrollment in the category of patients we consider unfunded, those enrolled in medical assistance or end rolled in the clinic system on the sliding fee scale, which means that they have no insurance, they are paying out of their pocket. We have seen that enrollment increase from the average monthly enrollment in -- in fiscal year 200,532,472 the current fiscal year, year to date, we are seeing that average enrollment up to 37,322, increasing access to patients in the community. The map program itself, those that have a full benefit plan, we have seen that average monthly enrollment grow from 8485 individuals a month to 10,775 in 2007. So there's been significant growth, 27% in that program alone. We have talked with you before about the gaps in specialty care. I thought that I would provide you some of the efforts in this area. We went through a process that identified what we thought were -- I would say prioritize these specialty care access issues. What specialties have the longest wait times for those needed services. One at the top of of the list was diabetic eye screenings for patients who we know they have a chronic disease, an annual eye exam is part of that good care program we provide to our patients. But we were experiencing average wait time of 360 days to the next appointment. Which is really unacceptable. Level of service for a patient. Our target is 30 to 45 days from referral. This past year we have contracted with the three additional providers that are providing about 144 appointments a month to screen our patients. Essentially working down a backlog of eye screen examines for our patients. We have seen the wait time after the first four months or so, about four months, go from an average of 360 days down to 240 days. Downward trend continues, we continue to -- to minimize that backlog and then hopefully in the future get people on a regular annual basis. So there are other examples of specialty care gaps that we are working on, that is the most telling one. In terms of mental health initiatives, you are very familiar because upper partnered with us in trying to address some of the gaps in care in that area. We have seen in our e merge program, which is the integrated behavioral health program that we support in the community health center system, we have seep that program grow from in 2005 really double the number of patients that are treating and the number of encounter either they are providing. Through a combination of adequate staff so there are staff available in all of the clinics for these services. Then further integration of those services into the care setting so that people are getting access to behavioral health services. We have seen a number of patients treated, a number of behavioral health encounters in 2005 is 5500, it's doubled to 11, almost 11
>> [indiscernible] we have seen very significant access there. We began funding additional pharmacy budget to treat patients that were joint patients between the community health centers and mhmr because we found that we could provide the -- the prescriptions at a lower cost than mhmr could. In the $300,000 investment you know in the first year of mhmr's experience in that program, saved over half a million. That helped them free up those budget dollars for other direct service delivery. In fact in fiscal year twks we began a contract with seton shoal creek, but did create
>> [indiscernible] capacity for patient at shoal creek, created an alternative to the use of the Austin state hospital for hospitalization for those that did not have insurance. We continue to see the number of patients treated there in increasing. In 2006 was a partial year that we funded a half million for a a five month peaferd. Increased to a million in the current fiscal year 2007 budget. In April of this past year, the board -- approved an additional $500,000 for a total annual contract amount of 1.5 million to again increase the number of patients that could be seen at shoal creek. We do know based on the psychiatric services, stakeholder group crisis plan development that we intend to increase that funding even further for fiscal year 2008 once the expansion of shoal creek is completed. So we will go from funding four beds to eight beds. On slide 12, I think this -- it's really interesting when you actually put all of the numbers together.
>>
>> [indiscernible]
>> we are getting static.
>> is that better?
>> I will just have to lean in.
>> lean to the right
>> [laughter]
>> you like that direction? Okay.
>> slide 12 shows a -- shows I think comprehensively what the district has been investing and what it has -- has netted us in terms of collaborative investments from the community. Since inception the district has -- has leveraged 7.4 million in what I call both accommodation of one-time moneys as well as ongoing funds. With collaborative investments of $19.2 million that have netted a total value to us of 26.6 million. It really is a good feel to put all of the numbers together and see it pop up that way. We saw a $272,000 investment in the shivers cancer center created another
>> [indiscernible] investment from seat top to expand I don't knowology capacity at slivers. We invested in the medical icu, er trauma center expansion, both of those, $2.6 million investment leveraged almost $9 million investment from seton. We have invested a little over $100,000 in the pharmaceutical assistance program run by the indigent care collaboration. The other partners invested another 500,000. We have netted $5 million value of free drugs into this community. Those are patients that either were paying for it at -- at more retail or wholesale rates or possibly weren't getting them at all because they were too expensive. That is of significant value to the community. Of course we just mentioned mental health initiatives, 4.4 million, includes an e merge program, seton shoal creek, netted another 4.2 million from our partners such as Travis County, Austin Travis County mhmr, seton, st. David's system, and the city of Austin. In terms of the development process for the budget, we use our strategic plan as the guiding principles in terms of the budget development we look at what we are set out to do, we assess what we think we will accomplish towards that strategic plan in the next fiscal year or possibly things that might begin in the next fiscal year, carry out in the later years. Likewise things that we will have begun in current years. We look at -- at the analysis of needs as they are presented to us and also with the information that we have available to set our budget priorities. Of course looking at our revenue forecast is a big part of that. Seeing what funding our preliminary tax rates might provide to us, estimates of other revenue sources, tobacco litigation funds and interest in others that we have.
>>
>> [indiscernible] we try to make incremental progress towards. I hope there's a meaningful way to express need in the community. Need is really hard to pin down from a sort of scientific or mathematical perspective. I think this gives you an idea. We know in Travis County our total population, based on 2005 numbers, was about 862,000 individuals. Our estimates based on state data, based on 200% below is who this district serves as our programs are targeted. Approximately 286 to 287,000 individuals at or below poverty. That means they might be potential individuals. We know that the safety net itself outside of the community health center systems, we know that the other safety net providers in the community based on indigent care shows that they are serving about 55,000 individuals. We know that we are serving about another 150 thowvment collectively around 100,000 people a yearment. Out of that 286,000 that might need services.
>> have we actually --
>> [indiscernible] one time we were looking at how to decrease using the emergency room. Seton brackenridge. The services that you
>> [indiscernible] does that indicate any type of -- of decrease as far as using the emergency room when they actually can have an opportunity to use one of the clinics? I thought that was part of -- more expensive that way than it is to go to one of the clinics. Does any of these numbers reflect any of this multitude of increase as far as services and also persons receiving services? Have there been a trend from the brackenridge emergency room study? I don't think there's a trend in downward. No. You probably won't see downward because the population continues to increase in the regions growing and brack as a trauma center is going to their prongs show they will continue to grow. Appropriate use of the emergency room. We established an urgent care center at brack this fiscal year. Show who is going there, who is utilizing those services and then the -- the work of -- of that setting is to then -- to then link those individuals into a primary care home if they do not have a primary care home try to help educate them about the use of the er, help educate them about services that are available out in the community. Hopefully to have a downward impact on what we call inappropriate utilization. There was a policy change. We did find in studying emergency utilization medical program assistance program enrollees, we found they had a much higher utilization of what we call inappropriate use. In other words using the emergency room at higher rates than the rest of the population. We -- there was a suspicion that part of the -- we may have been contributing to that use by an imbalanced co-pay policy. A medical assistance program enrollee could go to the emergency room and have a visit for $10. So there was some speculation that that may not create enough incentive for someone to think about the difference in settings. So the board did approve an increase of co-pay to $25 in the emergency room. For --
>> [multiple voices] yeah. You don't want to -- never want to discourage anybody from going to the er when they need to go there. Likewise you don't want to encourage them to go there when they don't need to go there. One thing that's -- that everybody should know is if someone goes to the emergency room they end up being hospitalized the emergency room co-pay is waived. If you are hospitalized you obviously need to be there, you need to be treated. So we will be tracking data once that is implemented we will be analyzing that to see what type of effect it actually has on the utilityization, if that policy change actually impacted the behavior and utilization. We are actually going to be engaging with some folks from the university of Texas and a program evaluation of that policy change. So we are looking forward to seeing what that tells us.
>> thank you. Looking back on this draft if we think that we are serving 100,000 out -- if you look at the straight math we might be serving 37 to 47% of an eligible population. Most I think -- based on research that I have read, there's kind of an accepted standards that says that at any one time about 50% of the population accesses health care services. Actually has need for health care services. Obviously not everybody needs it all of the time. If you took that approach, said okay if one-half of that population, that 200% needed services what are we serving? Probably about two-thirds. I think that gives you an idea about who we are serving, who we might have the potential to serve. I think the things that we have to keep holding out for the future, one, our population does continue to grow in this region, we have to monitor what income level that growth is occurring at. And then we are also concerned about employers that continue to drop coverage or make it so it's less affordable and people are opting out because employees are having to shift the costs to actual employees. So we want to monitor those because although we may be making progress towards a service delivery system, we might have factors working against us by making the problem bigger. I think we told you that the average for map about 10,000 -- if we look at who enrolled in the medical assistance program it gives you an idea of who goes in and out. But last year leability rolled about 20,000 individuals in the program. Again at any given time you had about 10,000 or so that were enrolled. Likewise under the sliding fee schedule they enrolled about 40,000 individuals throughout that year. Again people move, come in, move out of that. That gives you an idea of the -- maybe the level or the flow of need in the community. Let's talk about building the district's 2008 budget. We created this, that's sort of how we are thinking about building this budget in blocks, our base budget includes of course all our existing services that we are committed to and any contractual or other inflationary increases that are associated with those arrangements. We are looking at things that we have already committed to, such as the increase in capacity at seton shoal creek, we have built that into our base budget. Anything else we started this year
>> [indiscernible] coming year or years. Current effort, a number of strategic initiatives and opportunity that have been identified that we are evaluating. What level of investment would be appropriate for fiscal year 2008 to
>> [indiscernible] progress much then of course we have transition of the operations of the clinic and the medical assistance program staff as well as all of the facilities and structure that goes with that into the district. This year under a pretty significant planning process around that, in fact we are just about to submit to hersa the application that will request the transfer of the fqhc status from the city to the district. That's the first step in this transition in terms of federal involvement, we have to get their permission to transfer to status. We have submitted that application or will next week. Then we are anticipating it could be a 12 to 18 months process before we are completed and have approval. We are targeting our request to them is to have that status transferred to us at the end of February of twine, which is the -- 2009 the end of the grant year that makes it easier to transfer to the end of the federal grant year. I think that I mentioned to you slide 16. This may be a repeat of what's in the base budget. Basic expenditures for 2007. Any cost drivers that are built into the contracts. And in our current service delivery arrangements, anything that we have committed to next year already in terms of policies such as mental health increases in mental health. Some examples of inflationary increases are certain of our contracts like with the seton health care network for the medical assistance program service delivery does have built in cost innatures, our contracts for if I see services have cost innatures so we build those into the base budget. There are many areas of unmet need. Talked about this many times in terms of service delivery. Lack of same day or access to primary care, what we call walk in or urgent care that we just discussed. And we know that on an average across the community health care center system, the wait time is 16 days. When I say average that could be a -- a weight of 30 days and versus three weeks. Some clinics there are longer wait times than other because the provider practices may be more full than others. Depending on the geographic area of the county, there may be longer times than others.
>> what's the reason for that?
>> it's a combination of supply, in other words the amount of services that are available in that clinic versus the demand that lives in that community. We are seeing a significant shift of the population to both the north and the south and southwest sectors, that's where the demand is growing. That's the greatest demand placed on the northeast portion of the system as well to the south. Wait times are longer because there are more people trying to access that system.
>> okay. So what it begs the question over time how are we going to switch delivery of the services to meet where the population is now residing. That's that -- that's that fabulous growth that that has occur in the -- in the last decade to 15 years, now we are having to adjust to it. That's a discussion for another day but really does lend itself to -- to a requirement for a long-term master facilities plan. As facilities age and popmigrates where will we provide services in the future. We are looking at 15 months out in -- in gi related to specific issues, looking at nine months out. Ophthalmology six months. Orthopedic four months out.
>> [indiscernible] the struggle here with specialty care, physician services it's not about whether you can buy it, it's about whether it's available. As we are a growing community we don't necessarily have all of the physicians in all specialties to serve a population of this size, whether they are funded or not funded. We still even though we put the contract with shoal creek in place
>> [one moment please for change in captioners]
>> some of the things that we are looking at in the -- in the increased service levels for the fiscal year 2008 budget involve primary care. Primary care, specialty care we only have further expansions to the medical assistance program. We are going for a process right now that we review the various options with our committees and then we will be coming back in a full board session to discussion those further to get agreement among the board about which of those they would like to include in next year's budget. I think this is similar to the process that you go through, p.b.o. Helps you go through in terms of evaluating what the options are. A little bit about the transition. We have a diagram on this slide that tries to depict what we are attempting to do. This -- operations of the clinic system and the staff who are operating the m.a.p. On our behalf right now are plugged into an infrastructure in the city. In order for them to unplug they have to have some place to go. We are building that place to go in the district. And we are literally starting from -- from scratch because we have nothing. We have staff and p.c.'s and a building, but we don't have h.r. Systems and finance systems and facility management and on and on and on. So we have to build that infrastructure in order for them to be able to continue to operate and have -- build that infrastructure by 2009 when the transition takes place. This is requiring dedicated staffing to focus on that. Especialized expertise from outside resources, we don't have i.t. Staff on -- or i.t. Expertise on staff. We don't have facilities management. There's certain specialized legal services we need to get all of these things set up. And of course we just have the physical acquisition of systems that we have to put in place. So in terms of how we think we are going to be proposing to fund the budget, the upcoming budget, we think that our base budget will basically be covered by the effective tax rate. We will have to consider increasing service levels, how that affects any increase above the effective tax rate. We are looking to fund what I call the -- the one-time costs associated with the transition. The building of the infrastructure to the extent that they are one-time costs that won't be repeated. We are -- we are considering funding those out of our allocated reserves. There's some of those costs will be ongoing so they need to be built into the base budget because they will need to be funded over time, times straight that out. Separate that out. What is the tax impact today of the homeowner? Just a little bit of information about the district's tax rate and you have seen some of the -- you have seen these numbers in your own presentation in terms of average homestead value. We do know that the average homestead property value increased $19,325 this year. Again that's preliminary. We know that the appraisal office has not issued the final appraisal figures. The district's 2007 adopted tax rate was .0734. And the preliminary effective tax rate based on the data received in may is 0669, which is an 8.9% decrease over last year's adopted tax rate. That effective tax rate, the total tax payment look at the 07 adopted rate versus the preliminary, represents a dollar and 36-cent decrease to the average homeowner. Each 1% of revenue, incremental revenue above effective 1% gives the district another $560,000 of funding. That would cost an average taxpayer a dollar -- 1.31 per one percent. I think that gives you some idea. I think Travis County a 1% increase in effective tax rate probably generates somewhere around 3 million? Something -- something in that range? I guess a couple of things about property tax revenue, why it is important to the district. It is our main source of funding. Looking at the preliminary effective tax rate in our preliminary look at our base budget, which I'm not ready to produce for prime time here, still under a lot of work, but -- but we are looking at -- at about 73% or 57,000,073% of our budget, heavily -- 57,000, 73% of our budget. The second major
>> [indiscernible] talked with you about before. I think that we are going to be actually very favorable position this year of -- it looks like we may have more upl revenue this year than budgeted. This is the good news. But out of state reforms that occurred in the last legislative session we know that we will be capped at 2007 rates. Whatever we get this year, we will get next year, following years assume thank the state continues to draw down the same level from the feds, but it will not be going up.
>> [one moment please for change in captioners]
>> one time we were looking at -- you may have to update me on this. At one time we were looking at these things, we were looking -- we were talking about disproportionate sharing and things like that, where dispro money was being looked at, money that's being passed on from the federal government. One of the questions that did come up at that time was the residents of out of county that may end upcoming here. We didn't 'want to end up in a situation that other counties have experienced where they're having a lot of upheaval, financial crisis because of have you a hospital district and have you certain people that are putting money into that district, but have you other people that are using the service. So I just want to make sure that none of these things are -- because the question came to me again, and I'll ask it again; there any persons out of Travis County that are receiving services in Travis County that live outside of Travis County and we're having to foot the bill? I didn't know the answer to that question at the time. That's why I'm asking you that question now because it was brought to me.
>> the way our arrangements work at seton, we have three sources of payment for seton. The first is for those individuals who are enrolled in a medical systems program and therefore they have to be a resident of Travis County. We made payments to seton for the services that they provide to it them at brackenridge hospital or anywhere in the seton's network, quite frankly. We additionally make a payment to them for charity care services and it's a fixed annual payment and again that is only for Travis County residents. And then we make service payments to them for physician services, so if our patient goes to the hospital they need to be hospitalized or they receive specialty care there, we make a payment to them. But our dollars are only serving those in Travis County.
>> our service dollars, we've made some contracts to seton where, for example, we gave $282,000 to seton to expand the shivers cancer clinic. And at the same time the shivers cancer foundation gave 282,000 and seton put in 282,000. There are probably people from other counties that are using that clinic. That was one time money. That wasn't paying for particular services, those are capital dollars. And there is some out of county pressure on brackenridge, and we do make payments for capitol, we just can't allocate the capital dollars for out of county and in county because they're not tied to a specific patient service.
>> well, the question came to me and I wanted to pose it to you. And if they ask me again, another similar question, I'll tell them to call you.
>> we'd be happy to answer it.
>> thank you.
>> let me make sure I have it right, the difference in what we have in our situation, does the hospital district in bexar county operate the hospital, and that's the reason why you hear this deal about there are some areas where the outlying communities don't participate in the health care district and that's the rub because why buy the cow when you get the milk for free kind of deal? Our situation is that our health care district operates the clinic and operates everything other than the hospitals, so whenever somebody from hays county does come in to brack, they do take care of them. But that's the differentiation really. The fact that we run the health care district doesn't operate brackenridge hospital, so therefore when people ask you that question, you can clearly say no, we don't care of it. In order to access our health care district, have you to have -- you have to be a Travis County resident, right?
>> that's right. And I think it's fair to say that the cost of that out of county care is still there and that cost of that out of county there is there in the system. Seton's bearing that cost. Other hospitals in our community are bearing that cost because they're not just coming to brackenridge, they're come to go st. David's and south Austin. So the community at large is bearing that to the extent that those costs are uncompensated, we're all paying for it either in increased insurance rates or other ways.
>> I'm glad you cleared that up.
>> that's a really important distinction that's not always well understood. When you do operate -- if you operate the hospital, if we operated the hospital directly, it's a very different situation and it puts us in a different level of risk. And if you recall, one of the reasons why that facility was leased to seton in the beginning was that it felt like the facility itself could be better run and better managed part of the health care institution that was its prove mary focus. And then had the leverage of that system, being part of a larger system and get the efficiencies to try to offset some of that burden.
>> the same thing applies to parkland? That's the reason you see senator west generally trying to do something out of the dallas area because that health care district does operate parkland hospital, so therefore that's the reason he's always trying to get legislation.
>> yes. And there have been efforts -- efforts that I'm aware of at least, more public efforts in dallas and san antonio trying to get the surrounding communities to participate more. But that's -- another slide of information I want to share with you, it's one of those when you put the numbers together, you really like the way it looks. You recall that we make intergovernmental transfers that draw down those dollars. And since our insengs in the regular itt, intergovernmental transfers that the government make out of its tax dollars, we sent up 122 million and we drew down an additional 139.5 million just out of the district revenues. You remember I think it was in 2006 we had an opportunity to draw down some additional funds that we were able to enter an arrangement with Travis County to use their local taxes. That send-up of 13.4 million netted an additional 14 million. And in this most recent fiscal year we started what's called the regional upl program, which is drawing down upl dollars for other hospitals, non-brackenridge hospitals -- non-traditional hospitals, but still had medicaid uncompensated days. We were able to send up 16.8 million. I need my glasses on. And draw down another $10.9 million. And those dollars have gone directly to those hospitals that are participating. Of the amounts that we sent up, both based on district dollars and Travis County dollars, we actually share in those with seton under the arrangements in our lease. That's considered additional rent to us. So of the total new funds, we have 39.6% or 60.6 million went to the community. And then we included 35.1 million of those funds into our system. So it's -- the dollars are very, very important to us. What happens at the federal level is very important to us. What happens at the state level is very important to us. A little bit about reserves and we've had these discussions before. Dwoa have three types of reserves. Capital reserves which we basically use for one-time use. And then we have unallocated reserves, which are our rainy day reserve or untouchable reserves for emergencies. And these are similar to the cat dpoarz that you utilize -- these are similar to the categories that you utilize in your plans. Our allocated reserves we with think are important because they help us address the volatile nature of health care in this community. We're concerns about what happens at the federal level that we could find ourselves with a significant gap that is hard to fill in a short-term, maybe take longer term to recover from. So knowing funds are there to address that is very important to us. Unallocated reserves, although they're always important, they're becoming of more importance to us. I think it's going to be very near in our future where we'll need to get to point of borrowing. We have facility replacement issue that are coming up. The northeast clinic, which is at ed bluestein and 183 is in need of replacement and that will have to be done in the next couple of years, so that is a looming capital expenditure and I'm -- it's probably double digit --
>> I'm sorry. I didn't mean to cut you off. That's at h.e.b. Shopping center. It's a very utilized place. Have you projected how far it's going to cost to take care of that particular facility to bring it back?
>> we're looking at a replacement facility and it's very rough and you can't hold me to this number because it's getting rough estimates from individuals. But it's probably a 13 to 15, 18-million-dollar project. The clinic capacity needs to be be expanded tremendously and the facility is not worth keeping. It needs to be be replaced. It's a leased facility, so it's not -- it needs to be reestablished. And in a different location. Again, an opportunity to relocate where the population has migrated too. It's an opportunity. It also has a cost associated with with it.
>> okay.
>> with regard to our unallocated reserve, we have a board policy and that is to for the board to reevaluate the reserves every year thvment fall we did that and we have a goal of establishing an unallocated reserve be of 180 days of cash on hand. Last year we were at 90 days. This year the board voted to move that to 120 days with an action for me to come back to them in latter part of the year and reevaluate our condition and consider moving that to 150 days' cash because we're looking to having to borrow in the near future and we have to get our reserves established so we look like an attractive entity to loan to. So that will be reevaluated this summer.
>> is that consistent with other --
>> 180 is about -- is consistent for health care.
>> because of the volatility of the industry?
>> and typically you can't just cut off services. By the time you realize there's a prorks there's just a play down. It takes you awhile to disengage. So 180 days is fairly typical. We know based on the advice that we've sought thus far that we will be evaluated as a health care entity. We have to balance both of those.
>> so if there aren't any more questions, next step, we're going to continue to refine our base budget, have our board consider our expansion proposals in this month and in July. We will be be coming back to visit with you in early August once the board adopts a preliminary budget to present that preliminary budget to you and we'll take it through public hearing which we will have two scheduled in August and then be back to you in September to present a final budget as adopted by the board after we've taken input from the public and from you.
>> trish, tell us exactly literally what happened with y'all's legislation. Clark, maybe that's -- in layman's terms, so somebody that's listening, what exactly does that all allow you to do now?
>> it allows us to do a number be of thing. The most important part of the legislation is that it enables those employees of the city who would transition to the district or to an entity that the district would be affiliated with to have proportionality, which is a key term in the retirement plan world. That keeps them whole with respect to their city retirement after they move. Tafs very important. Another aspect of the legislation is that it enables us to employ physicians directly. We thought we had that authority in any event, but we got that confirmed in this legislation. We had to work that out with the tma, but we did get it worked with you with them, so they supported in the end our legislation. We were the only hospital district in the state that had an expressed prohibition against sales tax, which I was never clear in our original legislation why that was. It just sort of came out that way. We thought that we ought to have the same sales tax authority that everybody else has, although now that we have it, that was in the bill, we couldn't impose a sales tax unless the cap was --
>> it's already maxed.
>> we're now on an even keel with every other hospital district in the state. We also put in the bill that language that we came and talked to you all about that says that in the event we were to have some kind of emergency, such as if we lost this supl funding, we could either come over here and ask you all to go through the peveto cap, which would potentially trigger a rollback election, or we could in the alternative could directly have an election in the affirmative. And our thinking there is for that to happen we would prefer to approach voters in the affirmative than in the offensive. And that passed as part of the bill. What other aspects of the bill would be of interest to the Commissioners?
>> the ability to issue tax anticipation notes, should cash flow need
>> [ inaudible ].
>> that's something we tried to get in the prior year and were not able to get. With that flooj you all helped us with the send-up on several months ago, the concern of that has been alleviated, but other hospital districts have that. That's just a situation where at the end of the year when we haven't gotten our property tax revenues yet, we might actually need to be able to fund through to the time when we get the property tax revenue.
>> based on the law now, do we approve the tax rate?
>> you approve the budget as submitted, and you set the tax rate.
>> that did not change.
>> either we approve the budget or we don't approve it.
>> it my understanding from legal counsel, it's an up or down thing.
>> we either approve it or reject it.
>> right.
>> so in September when you come to us, Commissioners court adoption of tax rate, where do we on here approve the budget?
>> we will bring the budget to you in early August, so you will see what has been considered by -- which includes a tax rate.
>> put it somewhere on the schedule. And I wouldn't wait until the last minute. More important than your tax rate is the budget. So somewhere on page 26 should be presentation of the health care district's bucket to the Commissioners court.
>> yes, it will be in August.
>> August? Yes. We're falling the same schedule that we've followed before in the prior years. Am I misunderstanding.
>> we discuss this very issue last year. On page 26, I'm not seeing you come to the Commissioners court except for unconscious to adopt the tax rate.
>> no. Under August, presentation under second bullet presentation of board approved budget to Commissioners court --
>> presentation of board approved budget to Commissioner court.
>> that's not their final budget, that's their -- I want to get the terms right. They approve a budget to be considered.
>> I'm just asking when do you expect the Commissioners court to approve the budget.
>> you will approve the budget in September, but you have been -- you will have seen the proposed budget.
>> that's all I'm asking, really. So instead of Commissioners court adoption of tax rate, should be Commissioners court adoption of budget.
>> you're right. It should say budget and tax rate.
>> budget and tax rate, it funds part of the budget, not all of it.
>> that's correct correct.
>> the budget is figurer.
>> but you do in fact set the tax rate. So this should read both, you will approve the budget and set the tax rate.
>> if the law is that we approve the budget, that's what we do. And we don't approve the tax rate except to the fact that it's incorporated into the budget. The revenue generated by application of the tax rate to property valuations, right, will give you a certain amount of revenue. So if we approve expenditures and revenue, which basically make up the budget, that's a whole lot bigger than a tax rate. Is my only point. And my other point is I would get some preliminary reading there the court before -- you're on on the same fiscal year we are. Our year starts October 1. You need to get preliminary feedback from us I'd say sometime in August. So is that where you're supposed to get the first item under August. Preliminary budget presented to board?
>> yes. The sequencing is the board considers a preliminary budget and says this is what we approve for you to take to the Commissioners court to present to them to get their input. And then it goes -- and there is a public hearing process.
>> for feedback, for input.
>> right.
>> in August we will come to you with our thoughts as to what is best. And implicit in that will be a tax rate and we'll come talk to you about it. We'll listen to you. And then once we get a feel for where you want twog that, we'll go back, make any changes that need to be made so that when we come back in September, we are ready to go. That's the plan. On both the tax rate and the budget. Does the board make a concerted effort to partner with other providers to maximize service impact?
>> I think that's the core of our budget and the core of the way we do business.
>> is there a systematic process or procedure that allows other providers to come to trish or the board to make recommendations, requests, etcetera.
>> it's a flees aligns with our strategic plan. We hear and receive ideas and proposals throughout the year and we work with providers to see how that fits within our strategic plan, look at opportunities for development and then proceed. So that's an ongoing process. That's not just related to a budget process. That's a continual, ongoing process.
>> you believe the answer to my question is yes.
>> yes.
>> now, there are other providers, at least a couple, that have expressed that concern to me. I of course asked them have you gone to -- actually, I said trish and clark, not realizing either you were about to step down or had stepped down. But just putting astericks on that, it sometimes is difficult to really have an open door policy with the door open. And what expressed to me was that there is no systematic way for the other providers either to know or to gain access. My other point is that was not the Commissioner's court problem, but to the extent the county judge can help, I'll pass on the information. And that's why I asked the question.
>> maybe I can share with some recent conversations with you and that can help, but there are discussions in the community. We have discussion bz our budget process with the indigent care collaboration which constitutes all those other providers and the safety net. And so there's open dialogue and continual dialogue. And we are approached by providers quite regularly and have been very recently. So I'm not --
>> based on whatever you say today even with your strategic plan, the need is so big, the problem so great, that all the providers in the health care service delivery business really need to collaborate for us to maximize the impact of our scarce dollars. So I think we believe in the same thing.
>> and that has been our approach is how do we collaborate. One of the principle that we've established that I think is critical is that the district funding should not supplant any existing funding. If should only add to what is already being provided for in the community. I hope that makes sense because we're trying to grow. We're not trying to substitute our dollars for someone else's dollars.
>> trish, how do you advertise the meetings? How is the advertisement? It be somebody be wants to come down -- because we all get questions, and I guess sometimes --
>> our meeting are posted on the web be site and posted in the courthouse just as yours are. And at our offices.
>> okay.
>> and we're on television.
>> okay, good.
>> so clark, you are stepping down, but still on the board.
>> I am still on the board. Carl richey is taking my place. He couldn't come today. We're looking forward to his leadership.
>> tell carl that the other chair was always here.
>> [ laughter ]
>> I'm honored to be here again. I really appreciate t.
>> looking forward to working with you further and the new chair. And trish some more.
>> thank you.
>> anything else?
>> thank you.
>> thanks for coming by. We'll see y'all at the next opportunity.
>> now, there were some that we asked to come a little earlier because we thought we would get to them. .emem to thememememem.........o
The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.
Last Modified:
Wednesday, June 27, 2007 8:59 PM