elpasospeak

This came in from Helen Marshall:

I am not an accountant and have not examined the EPCH books.  But the constant reference to “rent” being paid to the UMC has puzzled me.  How can UMC charge rent for facilities that were built with yet another taxpayer-funded bond issue?  

The explanation from a friend at the Times is:  “UMC’s explanation has been published several times. They say the rent is meant to pay for upkeep, rather than taking on additional debt to pay for such things. Children’s isn’t disputing the rent as much as they’re saying they were overcharged for other services.”

So the rent is not rent.  Got that?

I hope the judge in Austin will hire at least one good CPA to untangle this mess.

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Then she sent this in Sunday:

In the letters section of today’s El Paso Times, we read this about the Children’s Hospital:

“Editor’s note:  The building housing Children’s Hospital is owned by University Medical Center.  The bonds to build the facility were issued by UMC, and those bonds are repaid through property taxes collected by UMC.”

So it is rent.

The real owners are the property taxpayers, who are about to get whacked.

http://www.elpasotimes.com/opinion/ci_28179173/childrens-physicians-staff-deserve-support

Our county hospital and the children’s hospital have signed a preliminary agreement that will control how they go forward.

Make no mistake, the county hospital will be in charge.

According to the proposed term sheet:

• UMC would become the sole corporate member of EPCH (in other words the only owner).
• The UMC Board has the right to approve and/or remove EPCH Board Members.

A bit of good news for the children’s hospital is that the county hospital will perform their services at “cost”.  We don’t know what kind of mark up the county hospital was previously taking on under the old agreement.  The only thing that would probably be better for the children’s hospital is if they competitively bid the services.  They might find that the county hospital’s cost is higher than what a for profit would charge.

The lease

Many of us wonder why the children’s hospital has to pay rent when the voters funded the bonds that were used to build the building.  The county hospital is getting paid for something that they did not buy.

The proposed term sheet does not even mention the rent situation.

Pouting?

The outgoing chairman of the county hospital board did not attend the meeting where the tentative agreement was reached.  We have to wonder is he was part of the problem all along.  Did he take his marbles and go home when things did not go his way?

We deserve better

Our county hospital and the children’s hospital have evidently decided to try again to settle their differences.

It will be interesting to watch how this happens in light of the fact that two of the county hospital board member’s terms will expire at the end of this month.

A few weeks ago our county judge and at least one county commissioner were calling for members of the hospital board to resign.

What will happen now?  Will the commissioners start to clean house at the board or will they tell us that we need to keep the current members “for continuity during this critical period”?

We know that talk is cheap.  Let’s see what they do now.

We deserve better

Brutus

According to our county hospital’s 2014 financial statements the hospital has already sold the $150 million of bonds that are to be used to finance the new outpatient clinics.

Interest rates according to the auditor’s report are between 3 and 5 percent.  Using 4 percent as the average we are now paying $6 million each year to handle the interest.

None of us have seen a clinic springing up anywhere yet the bonds have already been sold and we are paying interest.

The financial ratings firm Fitch recently warned that the hospital district’s credit rating is being evaluated and may be lowered.  The mess with the children’s hospital is evidently the prime cause.

Why were the bonds sold so much before the construction money was needed?  Could it be that the administrators at the county hospital knew that their financial condition would ultimately lower their credit rating and make the bonds more expensive?

What will the buyers of the bonds think if they learn that they bought bonds not being told that the hospital’s financial situation would soon worsen?  Have they been cheated?

Might we see some federal agency looking into this?

We deserve better

Brutus