Naked City

Hospital Funds Feud Goes On

Travis Co. commissioners on Tuesday gave preliminary approval to the Travis Co. Hospital District's proposed $97.3 million budget, but their tentative blessing did little to resolve an ugly funding feud between the city and the county.

Commissioner Gerald Daugherty is so put out with the city, in fact, that he managed to inject a completely unrelated matter into the discussion – the city's stance on a certain development controversy – before casting his dissent. By most indications, his "nay" vote seemed to serve as an all-purpose vote against the city, rather than a rejection of the hospital district budget.

In any case, the commissioners withheld their final approval until Sept. 28, by which time an interlocal agreement should be finalized between the city and the hospital district board. The adoption of the budget will follow a public hearing on the proposed tax rate – 7.79 cents per $100 valuation – scheduled for 6pm Sept. 22 in the Commissioners Court hearing room, 314 W. 11th. (That rate represents the 6.35 cents currently paid by city taxpayers, plus 1.44 cents out of the county tax bill, to support the public health care system. Since both jurisdictions are required by state law to reduce their tax rates accordingly – which the city did on Monday – the new district rate will represent a tax increase for county residents outside the city limits, but not for Austin residents.)

The interlocal agreement lays out the parameters under which the city will continue operating the Community Care Department's 13 city/county health care clinics for the district, and also includes a city commitment to provide $10.7 million toward the hospital district's reserve fund (the county will provide $2.5 million). The city will also kick in a piece of East Austin real estate – the office building at 1111 E. Cesar Chavez that houses the HQ of the city/county Medical Assistance Program – which will eventually serve as the hospital district's headquarters. Pending approval of the interlocal, the City Council gave its blessing to the funds transfer when it approved the fiscal 2005 city budget on Monday.

Members of the district's Board of Managers met last weekend with city representatives to lay the groundwork for the interlocal relationship. "The good news is that we have a substantive understanding on the terms of the agreement," said Clarke Heidrick, who chairs the hospital district board. He said the board is still negotiating a few "deal points" that were left hanging, such as the leasing arrangements with the city on shared-use facilities – a clinic complex that also houses a community center, for example.

At Tuesday's commissioners' meeting, district managers tried unsuccessfully to steer the discussion away from the city-county rift, which has festered since county officials recently realized that the city, two years ago, transferred $33 million in reserves formerly booked to Brackenridge Hospital to its General Fund, where the sum currently sits as a "budget stabilization reserve." At least two county commissioners – Daugherty and Karen Sonleitner – contend that the city deliberately shorted the hospital district out of this nest egg when it passed the health care torch to the county's control. (The city has in turn contended that the transfer was legal and proper, and that its contribution to the district reserves should be based on what the new entity actually needs and wants.) Heidrick and fellow manager Dr. Donald Patrick stressed that the board will not take sides in the fight. "We are going to be partners with both of you," Patrick told commissioners.

Sonleitner hastened to point out that the commissioners' beef is strictly with the city. "It is not these folks' fault," she said of the board. Before the vote, she also took a final dig at the city's $10.7 million commitment to the district, noting that a "whole chunk" of that (over $3 million) comes from "disproportionate share" funding from the state that, the county suggests, should go to the district in any event. "I'm signing off [on the budget]," Sonleitner concluded, "but do not think for even a milli-centimeter of a second that I am signing off on what the city has done. We know what they did ... and the community knows what they did."

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Hospital District, County Commissioners, Gerald Daugherty, Dr. Donald Patrick, Clarke Heidrick, Karen Sonleitner

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