The Walker County Hospital District has a challenge ahead of them.
Hospital District managers will have to approve a budget and come up with an estimated $15-20 million in just a couple of months, as they make a bid to keep the doors open at Huntsville Memorial Hospital. And they are on a time crunch, as a hospital district takeover and management agreement with Community Hospital Corporation is expected to be finalized by November 1.
“We have some difficult decisions ahead of us, and it is going to take money that we will have to borrow. It will take money with tax increases this year and possibly the next two years as well,” hospital district chairman Anne Karr Woodard said. “It comes down to do we want to keep this community hospital open or not.”
The hospital district’s proposed budget is calling for a tax rate increase to $0.1162 per $100 valuation — which is 8% above the effective tax rate of $0.1076 per $100 valuation, the maximum allowed under Texas law. However, thanks to increases in property values, the proposed rate is still 2% below last year’s rate of $0.1187 per $100 valuation.
Maximum tax rate hikes are expected to continue in 2021 and 2022.
The 2020 draft budget, which will generate an estimated $353,411 in additional revenue, will drop nearly $3.5 million in total expenses. This is mainly due to the loss of $3.94 million in rent payments that was paid to the district from current hospital operator Walker County Hospital District until June 2018. The budget will see a $75,000 increase in professional and consultant fees, a $50,000 decrease in legal fees and a $200,000 increase in capital outlay.
“We have an urgent mission, and that is to get something done before the hospital has to close,” district attorney Joe Henderson said. “These things have got to be dealt with and have to be dealt with now.”
Included in the hospital district’s initial agreement with Community Hospital Corporation is the creation of a new nonprofit corporation, which will allow the hospital district to acquire various assets from the Walker County Hospital Corporation in a bankruptcy sale.
“The nonprofit corporation will contract with CHC to manage the hospital while the district will provide financial support for a set period to ensure that hospital operations continue until a long-term strategy or partner can be found,” Woodard added in a statement.
The bulk of the financial support will be with funding the first four months of operations, which has been projected to cost $6-8 million per month. This will allow the hospital district and CHC to “start fresh and not inherit debt from the Walker County Hospital Corporation.” Hospital reimbursements from private insurers and government programs like Medicaid and Medicare can take up to 120 days.
“We’ve been given a lot of data that is disturbing,” district board member Daivd Toronjo said. “We’ve had some very hard decisions to make since I got on this board and this is by far the toughest. It’s the taxpayers’ money and it’s going to be a disaster if we don’t have a hospital in this county, so we should make sure that everything is transparent and handled as ethical as possible.”