Read This Before Voting “Yes” on CHD Annexation
Curry Health District Annexation Facts
- A permanent property tax rate of .7425 cents per $1000 assessed valuation would be imposed. This is stated in the ballot measure.
- In late 2016 the projected indebtedness of CHD will be close to $47 million. The rate to cover the debt of a general obligation bond as well as other indebtedness is not stated in the ballot measure because it could vary because property values fluctuate. The projected rate is approximately .25 cents per $1000 (this is the rate that was passed in 2013 by the voters in the current Curry Health District) so the total property tax rate will probably be .9925 cents per $1000. Most of the bond debt will be paid over a period of 25-40 years.
- If the annexation passes, CHD plans to get an additional loan or bond for $10 million to pay for the expansion of the Brookings Fifth Street facility.
- According to Virginia Razo, CEO for CHD, annexation of Southern Curry County is not required for CHD to remain solvent but it is a requirement for CHD to have the ability to accommodate the volume of Emergency Department (ED) visits expected.
- Razo also stated that the Brookings ED could result in an annual operating loss of $500,000 (another projection of a loss of $568,878 was given by CHD on April 12, 2015). Both figures are based on an anticipated 6000 visits per year to the ED as stated in CHD’s proposal given to Curry Co. Commissioners. A Critical Hospital Feasibility Study done by Asante in 2004 projected annual ED visits of 3933 in 2017 with an assumption of a 3% population growth. The population has actually decreased.
- If annexation is passed, the South County, including Brookings and Harbor, will be paying approximately 2/3 of the of the property tax revenue to CHD.
- In the CHD audit for fiscal years 2013/14 CHD district management admits that there are “issues facing the District that could result in material changes in its financial position in the long run”. Some of those issues are risks related to Medicare and Medicaid reimbursement, increasing employee salary and benefit costs (salaries and benefits increased by $1.8 million or 11.5% as indicated on page 7 in audit), high liability, difficulty in recruiting and maintaining specialists, malpractice insurance premiums for the hospital and physician practices (Oregon has no cap on awarded punitive damages for medical malpractice with hospitals being liable), competitive pressures from neighboring health systems and continued expenditures exceeding revenue.
- According to the 2013/14 audit on page 7, there was an increase in revenue as new programs were put in place, but expenditures outpaced revenues.
- The audit verifies that 53% of the CHD revenue for patient care comes from Brookings.
- CHD has investments in the Local Government Investment Pool and Oregon Short Term Fund which are not guaranteed or insured and CHD does not have a formal policy limiting the amount that may be invested in any one bank or institution. (page 23-24 of audit)
- CHD took out a loan from the city of Brookings for $500,262 for system development charges in 2010 and they owe $266,484 as of 6/30/14.
- A loan for $41,795 was taken out by CHD in 2013 at an interest rate of 20.84% and was paid as of June 2015 (page 29 audit). I only mention this fact because, in my opinion, this indicates poor fiscal stability on the part of CHD if they have to borrow money at this rate of interest.
- ORS 440.395 stipulates CHD’s ability to levy taxes. This includes property taxes (1), as well as (2), the authority to, “. . .assess and levy a special tax upon all such property real and personal in an amount sufficient to pay yearly interest on outstanding bonds and any portion of such bonds maturing in that year.”
- ORS 440.370 stipulates that the CHD (as included in any Oregon Health District) “. . .can exercise eminent domain; purchase, sell, condemn and appropriate real property as well as water, water rights and riparian rights.”
…..Promises Past and Future
- McMillan, one of the many past CEOs of CHD, first indicated that the Brookings facility would be a hospital, and then he indicated that it would be an emergency room. The facility ended up being a clinic.
- Citizens were assured that annexation would not be required because increased patient revenue from the Brookings facility would be sufficient to cover costs.
- Virginia Razo, current CEO of CHD, states that “…to have the ability to expand Curry Medical Center to accommodate the volume of Emergency Department visits expected. . .” annexation is required. The ballot measure states that: “The annexation will provide additional tax revenues to allow the expansion of facilities in Brookings to provide emergency room facilities and other additional services and facilities.”
- Razo also states, “. . .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.” It should be noted that an emergency room is not needed for these services. A clinic could also provide them and the Brookings Clinic could have been providing them for the last 4 years. It is also interesting to note that Sutter Coast Hospital is currently advertising that they will be providing these services.
…..Quality of Health Care
- Comparative demographic data (2009-2015) provided by Oregon Rural Health (OHSU) documents that there was a decrease in population as well as an increase in poverty levels in Curry County. The data also documents increased morbidity and mortality rates, increased low birth rates, and the continuing lack of medical specialists. Clearly, the Brookings CHD clinic has increased revenue to CHD but has NOT improved health and wellness standards.
- We have other options to get good quality health care without paying extra property tax.
….Poor Business Practices
- The Gold Beach Hospital is being built in a tsunami zone so it is not eligible for grants. Jay Wilson, chairman of the Oregon Seismic Safety Policy Advisory Commission, is responsible for statewide earthquake planning. He sees the sighting process for the hospital at Gold Beach as a failure. He also says that critical facilities that provide life safety are being built without taking what scientists now know into account.
- The Brookings Clinic was built on wetlands and because of this, building costs were much greater than expected. Would this cause further problems if an expansion for an emergency room were to be built?
- CHD expanded by buying Shore Pines Assisted Living in Gold Beach and the Rush Surgical Center knowing that additional indebtedness would be required to build a new hospital.
- A new hospital had to be built in Gold Beach by mid-2016 because the state fire marshal could no longer issue additional waivers for the old hospital.
- Curry Medical Center in Brookings presently has 34,500 sq. feet. Does it make sense to add an additional 25,000 sq. feet for a total of 59,500 sq. feet for projected health care in Brookings? The Asante feasibility study done in 2004 stated that a 15 bed critical access hospital would need a total of 34,000 sq. feet.
- Would it have been better if the Curry Health District had annexed the Port District prior to building the new hospital thus being able to present a larger tax base when applying for loans?
…..Other Possibilities for Health Care
- There are multiple alternatives for quality health care rather than becoming part of the Curry Health Care District. If annexation occurs, there are NO
By voting for the CHD annexation, residents of the Port District are essentially investing in a business. They will be paying 2/3 of all tax revenue given to CHD. As it stands right now, according to the ballot, the city of Brookings will be able to appoint two individuals to advise the board but they will not be able to vote on any decisions made by the board. There is no representation from Harbor or other unincorporated areas. The port could potentially have a hospital within its district (ORS 440.505). This CANNOT happen if the Port District is annexed and becomes part of Curry Health District. There is no guarantee for new services like dialysis and chemotherapy infusion. There is even NO guarantee for an Emergency Room in Brookings. According to the original ballot measure (Nov. 5, 2013) for the Curry Health District (SEL 809) for a $10 million bond, this only covered replacements for the Gold Beach Hospital and the Port Orford Clinic. The Port District will only get to be annexed to CHD and will be able to help in paying their current debts. Does this sound like a good investment for Port District residents?