Travis County Commissioners Court
Tuesday, August 23, 2011 (Agenda)
Item 12
>> number 12, receive and discuss the preliminary budget of the Travis County health care district for fiscal year 2012 and the associated tax rate.
and if mr. Eckstein and the consultant are still on county premises, we plan to call that redistricting item up next.
>> standing by, judge.
>> mr. Eckstein, thank you very much.
we know how busy you are these days.
>> not everybody at once.
>> trying to get the presentation up on the screen for you.
>> all right.
>> good morning, I'm trish young brown, president and ceo of the Travis County healthcare district doing business as central health.
we have john stevens with us, chief financial officer for central health.
we're presenting to you the preliminary budget, which was approved by the board of managers last week to be brought to you.
and then to be taken to the public according to -- along with two public hearings, which are scheduled for September 1st and September 7th.
after we take these -- this presentation through those public hearings, this budget will go back to the board for approval and then will be brought to you for final approval.
so today we're just reviewing the budget, the preliminary budget with you.
you're not required to take action today.
>> let me start the presentation by showing you an overview of it.
we will first talk about some of the service expansion accomplishments that we've undertaken since the district came into inception in 2005.
look at the financial history of the district.
give you an overview of the 2012 preliminary budget.
talk about planned service expansions that we still have ongoing.
talk about the tax rate for the budget that we'll present for next year.
and then look at what the next steps are.
let me remind you first that our vision is that central Texas is a model healthy community and our mission is to create access to health care for those who need it most.
since our inception we have worked very hard to expand access to primary care.
when the district was created, there were a number of stakeholders who helped in that initiative and the common understanding at that time was that that was to be our primary mission, to expand access to health care and in particular primary care here in Travis County.
just showing you some of the statistics, since our inception in 2005, we've gone from a total m.a.p.
enrollment, our medical assistance program total enrollment of about 8500 enrollees to more than 20,000 in the current year.
140 percent increase in m.a.p.
enrollment.
we've also had a very significant increase in primary care visits that are provided primarily through our affiliated entity community care, but also, and in particular in the last two or three years, through a series of other providers that we have contracted with so that we've gone from about 177,000 total primary care visits in 2005 to 281,000 anticipated for this current year, a 60% increase.
one of the other things that we also undertook when the district was created was to create more access for mental health patients.
that being a particular concern of a lot of the stakeholders at that point.
and so we began efforts to increase that access in 2005 and those efforts began to pay off in 2007 so that you see in that year, that was the first year that we had -- we were able to fund some in-patient psychiatric care visits, and the number has gone from 247 in 2007 to almost 1800 in the current fiscal year, a 685% increase, since 2007.
this is a look at our history, our conditional fnl history.
you see in 2005 we started off with a tax rate of 7.79 cents per $100 of valuation.
and the maroon bar here is total expenditures, the two blue bars are revenue.
the dark blue bar is property tax revenue and the light blue bar is other revenue, which is primarily additional rent that we receive from the lease of university center brackenridge, to seton.
as you see over the years that has been the volatile source of income for us, but we have had really good history with that because it allowed us as you see there to build up a fair amount of surplus over those first few years.
then the last line that you see down at the bottom is the effective rate that we put in place in each one of those years.
so that beginning in fiscal year 2006 and for a period of four years we had relatively modest increases in the tax rate partly because we certainty sure about what our financial condition was going to be.
we budgeted during some of those years to actually spend down reserves that we had received from the year before, primarily again from additional rent revenue at seton that were surpluses.
but then by the time -- certainly by the time we got to end of 2009 and were preparing the 2010 budget it was clear that we had surpluses at that point.
we had more than 100 million in reserves at that time.
that we could no longer ask for a tax increase and so for the last two years fiscal year 2010 and the current year, 2011, we have come in at the effective tax rate.
but we're in a different situation now and in fiscal year 2011 as you can see, this is the first year in which the maroon bar exceeds the sum of the blue bars.
so we are actually going to spend down some of our reserves and we have in place a plan to begin to further spend down those reserves.
also with some tax increases as we go forward.
so as you will see our 12 budget will include a proposed -- 2012 budget will include a proposed tax increase of six and a half percent above the effective rate.
let me talk about our budget process.
we have had this year a very extensive budget process.
we began the process back in April, so we've been working for several months now with our board and we've had -- what I'm sure is a record number of meetings which our board.
some of which may be finance and committee meetings, but we generally had a quorum of the board even with those meetings.
so we've had eight full fledge sessions with our board when we've spent a lot of time looking first at the five-year forecast that we did back in April and looking at tax rate, expenditure levels and so on.
so our board has worked very diligently throughout this process to educate themselves about our 2012 budget.
our current tax rate is 7.19 cents per assessed value.
the change is .7 cents.
and most of that is related to operating to the six and a half percent increase.
and the operating tax rate, but we are also imposing for the first time pursuant to the motion that you just passed, your item that you just passed, a debt service tax rate of .15 cents that will create about 1.4 million in debt service for the payment on those certificates of obligation.
so our property tax revenue is going from the budget of 66.4 in the current year to 75.1 in the new year.
again, most of that on the operating side, that change, but about 1.4 of it on the debt service side.
we're actually taking down our budget for additional rent from seton.
we have synced up our numbers with the estimates they have for 2012, so have taken budget for that down by a million.
we're also taking down the budget for our interest and tobacco settlement revenue, primarily because of the extremely low interest rate environment that we're in.
we're paying a very low rate on our bond.
we're earning an even lower rate on our investments.
then we are proposing to use 12.3 million in reserves in 2012.
five million of that will be for our hmo, sendero, and the difference will go to the operating fund.
and so we have approximately a 50/50 match of use of reserves and increased operating property tax revenue.
our health care delivery budget is going up from 109.6 to 110.7, which includes that capitalization of sendero.
our administrative costs are going up from six million to 6.4, mostly because we are centralizing in administration some of our facility costs for rent for janitorial services, utilities, security and so on.
we're spirituallizing those in administration rather than putting them out in the operating cost centers.
and then our tax collection expenses are going up slightly.
this is an overview of our capital budget for 2012.
we have a one-million-dollar budget for information technology for a variety of needs to further small wireless access, replace pc's and so on.
and we have an 850,000-dollar budget for capital improvements for facility improvements.
500,000 of that is potentially for a new site for renovations for a new site to replace the existing northeast facility and 350,000 is for capital improvements on the existing facilities we're leasing from both the county and the city.
capital one one of the sides I wanted to show you is the increases we have done to our other providers or so our primary care providers for a m.a.p.
population and other m.a.p.
services.
these are increases that with the exception of the first line, community care, we have already put in place in this year.
for lone star circle of care, for example, we started the current year, 2011, with a 1.3-million-dollar budget for them, which we increased this year to three million.
an increase of 1.7.
and we're rolling that over into the new year.
so we have a series of expanded contracts with our primary care providers and with other services for primary care.
as you see listed there.
we also are budgeted to pay community care three million dollars more for next year for the expanded sites that they have worked on.
they'll begin to occupy the north central clinic in October.
as I mentioned there will be an increase of providers there over the next couple of years and then there are some other renovations that have gone on to our east and south clinics that will also provide additional access.
and this shows you over the next five years the cumulative additional patients that we'll be serving through the expansions that are already planned or are already underway.
beginning again in fiscal year 2012.
in fiscal year 2013 that large increase this you see there is due to fully staffing up the north central clinic.
and then the increase beginning in fiscal year 2015 is the result of partially staffing at least the new v.a.
facility with full staff fog that implemented in fiscal year 2016.
so we are continuing to expand access to primary care aggressively over the next several years.
let's talk about the effect of the 2012 tax rate, the preliminary 2012 tax rate.
again, it's going from 7.19 cents to 7.89 cents.
and when you see the average homestead values and apply those rates, you see that in 2011 the annual tax bill is $156.61.
and in the 2012 budget it is $172.27.
that's an increase of $15.66 with this new tax rate that we're proposing.
I want to talk for just a moment about some comparisons of our tax rate and just show you how we stack up relative to other jurisdictions here in this area and also to other healthcare districts across the state.
as you can see here and as you know well the largest bite of the overlapping tax rate comes from the school district, and then with the next being Travis County and the city of Austin.
a.c.c.
is next with four percent.
and central health is the smallest bite of the tax rate at only three percent of the overlapping tax rate.
this slide shows you the actual changes in the tax rate from fiscal year 2005 -- again, the first year we were in existence, to the year 2011 by jurisdiction.
it excludes aisd because as you know, their tax rate was changed pursuant to state law, not pursuant to any actions that the board necessarily took.
adds you can see here, -- as you can see here, both a.c.c.
and the city of Austin have increased the actual tax rate that they're imposing at this point from 2005 to the current fiscal year.
and then on the flip side, Travis County has reduced its tax rate and central health has further reduced its tax rate since its inception.
we are going slightly above the tax rate that we established in the first year, which again was 7.79 cents.
we're going to 7.89 cents.
and this shows you how our hospital district tax levee per capita in the current year compares with the other hospital districts here in Texas.
we are by far the lowest at $66 per capita with dallas at 1074.
tarrant at 153 and the rest as you see there.
and that brings us to the next steps.
as trish said, we have two public hearings scheduled for September the 1st and September the 7th.
our board is scheduled at a special called meeting on September the 14th to adopt the budget, which we will then bring to the Commissioners' court.
hopefully on September the 20th, if not on September the seventh.
seven -- 27th.
and that concludes our presentation.
we will be happy to answer any questions that you have.
>> court members, any questions, comments?
>> you gave me an answer.
>> the -- we're given a figure for the amended 2011 budget.
what was the adopted -- and that figure is $116,000,000.4 million.
what was the apopted budget for 2011?
>> it was about 27 million less than that.
it was 109 something.
>> to what do we credit that difference?
>> there were two items that we brought to the Commissioners' court here back in the spring.
one was a four-million-dollar amendment to simply increase our health care delivery program.
and the other was 2.8 or 2.9-million-dollar adjustment to our regional upl program to allow us to use some funds that had been set aside in prior years by our board, but had been -- had not been appropriated in the 2011 budget.
>> and upo stands for?
>> upper payment limit.
for the regional upper payment limit.
one of the programs through which we fund federal matching funds to come down to the hospitals here in the local area.
>> okay.
court members?
several residents have come down on this item.
this is their opportunity to give comments to the court.
mr. Reeferseed?
>> I just have one little question when you were talking about the overview of the preliminary budget.
on the -- the page isn't numbered, but it's where you're talking about the administration, the health care delivery, the administration of tax collection.
I notice when you talked about the administration, in 2011 the figure there quoted is 6.0 million.
and in 2012 it's 6.4 million.
and of course that's an increase of $400,000.
and the word that you used, I'm sorry, I'm blanking out on exactly what it was.
it was something like con sill -- I don't know.
what was the word?
>> centralized.
>> yeah, centralized.
and I was thinking centralized is usually a cost cutting situation.
in other words, you should be able to if you centralize all the -- as opposed to the opposite of centralize sietion, which would be to send it out to various other places, it would be simpler and thus cheaper.
so why did it go up?
>> centralization refers to the line, the category in which the expense was included.
so that .4, the 400,000, was previously included in the health care delivery line in the prior years.
now it's being included in administration.
so it's not a cost increase, it's a reflection of the expense from one line to another.
>> oh, okay.
so it's just juggling of figures.
>> it's just moving it around.
>> it's still administrative costs overall represent less than seven percent of the overall?
>> yes.
>> am I not --
>> but just to clarify, those are facility costs to deliver care to patients.
so they're incurred because of care being delivered.
they're not overhead, if you will.
those costs have to be incurred in order to provide care to patients.
>> okay.
so I guess my general question was is not centralization, wouldn't that generally be thought of as a cost cutting thing?
generally.
not here obviously.
but that's -- that was my reaction.
>> let's try webster's on that, mr. Reeferseed.
thank you.
if you would like to have comments on this item, come forth at this time.
there are four seats available.
and if you would give us your name, we would be happy to get your comments.
and while they're having a seat, can you update us on dove springs number 1 and number 2 hmo?
>> yes.
dove springs, the planning process that the board approved earlier in the summer is underway.
it's about halfway through.
it's process.
it's to be completed in September with the recommendation being brought to the board in October for service delivery in dove springs.
so that is well underway.
and comilings ergo mez reference add community meeting scheduled for this Thursday I think at six p.m., which is again part of the scheduled process.
so that is underway.
and in terms of hmo, we are in discussions with the state right now regarding the awarding of contracts for the managed care expansion, and we should be concluding those discussions fairly soon.
it will definitely be before we bring the budget back for Commissioners' court approval.
but it will be resolved fairly soon.
>> okay.
>> can I go?
>> go ahead.
>> okay.
thank you.
my name is (indiscernible) and I am member of san jose catholic church and a member of Austin interfaith.
your honor and members of the court, I am here to speak about the expansion of basic health services in the 78744 zip code area.
a couple of months ago this court approved central health machine of the old v.a.
hospital as a hub for clinics in the southeast Travis County area.
at that time central health also stated that expansion for southeast dove springs, 78744 zip code area is totally a separate project.
since then a consultant has been hired by central health and a group of representatives from city, county, cap metro and residents that we too are part of has been formed.
we have met twice in our community meeting, and there's one this Thursday.
we are very happy about this new group however, none of us are exactly clear of the purpose of this group.
what is clear is that in this central health preliminary budget is a line item for expanded health services at a cost of three million dollars.
in November 2010 this court approved 800,000-dollar expansion to our existing urgent care clinic on william cannon.
I'm happy to hear that ms. Young said that they are in progress.
we did a site visit there about a month ago and it didn't look like anything was being done yet, but, you know, that is where it is, here it is a year later still not available.
the location is not the issue here.
the real issue is that the expansion provide the whole list stick approach of -- holistic approach of services to meet the needs we have been talking about for the past three years.
we need a medical home that will include the basic health services, mental, physical, educational and prevention to name a few.
that will improve the health of our community.
>> your honor, my name is robert williams. I'm a member of minority baptist church, a leader with Austin interfaith and a resident of dove springs, 78744.
we are very excited that there are some dollars allocated for expanded services.
we want to state for the record, your honor, and the court, that we know central health are the experts in providing basic health services to meet the community health needs, however, we the residents are the experts of our community.
we have walked the neighborhoods for the past four years.
we have talked to many families from all over the school, in the area also.
there are several issues facing our neighborhoods that we feel can be a one-stop shop creating a health care -- healthier children, adults, families and communities.
the preliminary budget has a 3-million-dollar expansion service.
we want a line item for zip code 78744.
we the residents of 78744 area code have been very, very patient for the past four years and now we want a commitment from central care.
preliminary budgets commitment (indiscernible), I promise you our committee will not resist this as northwest Austin did.
our neighborhoods, we're looking forward to be safer so that as families, as they use them, as a result youth obesity is high among our youth.
diabetic, teen pregnancies or others too.
we believe that the $10 million will be needed for the medical home.
we ask for your consideration and we greatly appreciate your meeting.
thank you.
>> thank you.
>> good morning, your honor, judge Biscoe, members of the Commissioners' court.
my name is bruce bower.
I'm a resident of 78745, but I have provided legal services to residents of 78744.
I agree entirely with what mr. Zapata and mr. Williams have said.
I believe that there's a need for transparency in what the health district plans to do regarding dove springs and of course regarding the entire territory that is serves.
i want to say thank you very much for Commissioner Gomez for her question a few minutes ago on the previous agenda item.
the information that you brought forth in that short question, Commissioner Gomez, was a crystalization of information that many have sought.
so in your short question, you brought forward transparency that people have hungered for.
so in conclusion I would like to say I think it's very, very important that both because of the health care that central health is responsible for financing and because of the tax money that it collects that there be maximum transparency in its plans, especially regarding dove springs.
whereas mr. Williams has said the neighbors would welcome expanded services.
I do want to say thank you very much to the public service that ms. Young and mr. Stevens and other members of the staff of central health render.
there's no doubt that they are devoted public servants as are you all.
in keeping with that, please, please emphasize the importance of transparency.
thank you again.
>> thank you.
anybody else?
if so, please come forward.
so based on the proposed schedule, it will be brought back to the Commissioners' court for approval on September 20th, and you give us two weeks there before October 1 in case we need two weeks.
and the board will adopt the budget on September 14th.
>> that's correct, sir.
>> so do we expect final resolution of the hmo issue before that sprapt 20 -- September 20th date?
>> yes.
>> court members, any other questions or comments?
>> just one.
on Thursday's meeting will we be talking more about how we can make the community feel certain about what's going to happen and to address their issues?
>> well, the whole purpose of this process to which our visitors today have indicated, they are involved in the process.
this is a process that's been laid out in writing and adopted and approve by our board of managers and gets approved by the board of managers on a regular basis.
the meeting on Thursday is to specifically focus on health care need.
I think we've heard a lot here.
we've heard a lot at our own board of managers meetings about a very broad set of needs in the community, which encompass safety and youth and elderly.
and the goal of the meeting on Thursday is to begin to focus the discussion about health care services, which is what spiritual health is responsible for.
so there's a process designed to take up what's been a broader conversation and ms. Zapata mentioned the various agencies that have been involved in this effort, which has been for us very enlightening and for them, because it's brought us around a table and had everybody share what it is their interest and their focus is in dove springs.
and we've actually become aware of more organizations that are focusing their efforts in dove springs and I'm trying to bring them to the table.
so the discussion has been broad around a very long list of needs that tend to span health care, social services, economic development, safety.
I mean, a lot.
but we're trying to get specific around health care so that we can make a proposal for the services that are appropriately within central health's jurisdiction.
and within that have a plan about how we're going to work with the other agencies and try to meet these other needs.
so the plan, from my perspective, I'm not sure what the need is about transparency.
the process is transparent.
there's community involvement.
and it's -- the board took very specific action on a plan to conduct this process.
so there is quite a bit of discussion at our board.
>> so when you say health services, do we also include the preventive steps, for instance, addressing obesity which will lead to other issues?
>> yes.
if you think about obesity as an issue, it is definitely a community issue.
it involves the schools, it involves the home, it involves nutrition.
it involves health care delivery.
so what is central -- how does central health work with all of the rest of the partners that also address all of the matters involved with obesity.
specifically central health provides health care services that are typically performed by licensed professionals.
now, that typically represents doctors, nurses, nurse practitioners, but we know for example in community care and with many of our contracted providers they go well beyond that.
they have nutrition and social support efforts within the primary care setting.
so I think every health care provider tries to extend into the community and into their patient delivery services in a way that impact those diseases much further upstream.
so I think it's about connectivity, it's about how the health care services work with efforts in the community around obesity because we know a lot of that has to do with behavior, nutrition, exercise.
and central health is not necessarily an entity that is going to, for example, produce education programs in the schools.
that's the schools.
but again, how does this all connect?
how do we make sure all of our efforts work in concert and we don't duplicate, we don't replicate, but we make sure we connect.
>> and is the mendez school a partner with y'all to address some of those issues as well?
>> yes.
and there's -- on obesity, there's been a very specific community effort developed outside of central health.
central health is a participant through children's optimal health, but there is a group in the community that has very directly organized an effort and that's provider based, around childhood obesity.
it's supported by children's optimal health and the mapping work and the data work that's done around to show what's happening in the community.
but there are other efforts, there are other partners.
united way is a partner in the community.
people's community clinic is a partner in the community in terms of teen pregnancy in the 744 zip code.
so there are many people at the table and I think the question is how does it connect in a concerted and sustained effort.
because we have heard about many efforts in dove springs that haven't necessarily been sustained over time.
they've come and gone.
so I think our goal for this effort is to create something that does become sustainable in a very forward thinking way and it's not just about getting together one time to talk about what services are needed, but how do we have a plan for much longer term impact.
>> without being fully informed today, what action do you need from us?
>> nothing today.
>> do you have any questions?
>> (indiscernible) will be there as well?
>> I'm not sure who all is on the invitation to the meeting on Thursday, but they are definitely there in -- they're concerted effort in the community.
>> we need to have them there so it will be a full community discussion.
>> I'll follow up on that to see who all.
>> thank you very much.
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