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Curry Health District Not Telling the Whole Truth

Curry Health District is transparent about expansion, tax rates…

(Editors note: Unfortunately, there is no mention of the tremendous debt that someone will have to cover if the ballot measure for South County passes. Also, there is no mention of the significant and potentially dangerous powers that the District would enjoy, given an expansion of the District.)

…Curry Coastal Pilot — September 2, 2015…

by Virginia Razo, CEO, Curry Health Network

Curry Health District will continue to be transparent to the public and provide necessary factual information related to all District dealings, including the proposed territory expansion.

Those interested in facts about the proposed territory expansion and associated tax rate projections  are encouraged to view historical board meeting minutes at CurryHealthNetwork.com, or watch the video of the Curry County commissioners meeting of Aug. 5, 2015 (available on the county’s web site). An in-depth conversation regarding the wording of the ballot measure title and body (both of which were reviewed by county and health district legal counsel, as well as being approved by the state)  – was discussed in this public meeting, and the verbiage was unanimously approved by the  commissioners.

The base rate of 0.7425 cents per $1,000 assessed property value can be stated as definitive — it will not change and was included in the ballot measure verbiage. The rate to cover the debt of the general obligation bond cannot be stated as a definitive amount per $1,000 because assessed property values fluctuate from year to year due to construction, improvements, depreciation, and upturns or downturns in the real estate market — therefore the assessed tax rate will fluctuate. It will never be possible to establish a permanent rate per $1,000 due to this fluctuation.

The ballot measure does say, “If annexation is approved by voters, property owners within the annexed territory would be subject to the District’s permanent property tax rate. The permanent tax rate is $0.7425 per $1000 of assessed valuation. The first fiscal year in which this tax rate would be imposed is 2016-2017.

This measure does not increase the tax rate for taxable property located within the district’s existing boundary. General obligation bond levies authorized by the district would be applicable to the annexed property.”

The last sentence of the measure addresses the general obligation bond indebtedness to the extent that could factually and legally be disclosed with the information available.

There has been recent concern expressed over the District’s financial health. Ken Landau, the district’s CFO, provides the following data. As of Aug. 20, the district owes approximately $26.7 million. This includes $12.2 million for the Curry Medical Center facility in Brookings. It also includes $10 million of general obligation debt related to the construction of the new Curry General Hospital in Gold Beach, $2.6 million for Shore Pines Assisted Living and approximately $1.9 million for operational capital equipment leases.

The district will take on additional debt in the next two years related to the new hospital, up to a total amount of $20,961,000 — as provided by the USDA.

In late 2016, the projected indebtedness of the district will be close to $47 million. All debt is related to assets that provide a positive rate of return, or is covered through service operations. The CFO, along with financial advisors and lenders, routinely performs debt capacity analysis that shows the district is well within its debt capacity. A feasibility study was performed by Wipfli, a nationally recognized accounting firm, which showed that the projected debt of the district is within the district’s capacity to repay. In fact, current revenue has already surpassed the feasibility study projections. The USDA has very stringent debt guidelines that have been met. Territory expansion is not required for the district to remain solvent. It is a requirement, however, to have the ability to expand Curry Medical Center to accommodate the volume of Emergency Department (ED) visits expected.

The district has consistently stated that additional services could potentially be provided if feasible, and those services may include chemotherapy infusion and other complementary cancer services, dialysis, pain management programs and expanded access to specialists via telemedicine or on-site clinics.

As an organization tasked with fiscal responsibility to district taxpayers, decisions will be made in the best interests of the District for the sole purpose of providing quality health care services — but only after thorough financial analysis and community needs assessment are completed.

District financial projections estimate operation of the Brookings ED could result in an annual operating loss of $500,000. More than $600,000 has already been invested into the remodeling of Curry Medical Center in order to accommodate a small ED, and additional staffing needs will cost an estimated $2.7 million annually.

The Oregon Health Authority on Aug. 13 made permanent the temporary rule allowing a satellite ED to exist in Brookings. This is after many years of continued effort to provide a much-needed service to the residents of the south county.

The amount the district collects in taxes is a small fraction of its revenue. The remainder is generated from operations. The district is a non-profit entity whose purpose is to provide health care services in rural communities in a day and age when other rural hospitals are closing (43 have closed since 2010). In late 2016, when the debt for the hospital will be realized by taxpayers — and if the ballot measures pass and the district is expanded to include the Brookings and Harbor areas — then the tax rate is estimated to be approximately 99 cents per $1,000 assessed property value. This is less than the average tax rate of all other health districts within the state of Oregon that levy taxes.

Once the hospital general obligation bond is repaid, taxpayer contributions will decrease to the permanent base rate of 0.7425 cents/$1,000.

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