Fiscal Year 2018 Proposed Budget and Property Tax Rate Central Health Board of Managers Aug. 16, 2017 Jeff Knodel, CFO Lisa Owens, Interim Deputy CFO
FY 2018 Proposed Budget Highlights • Invest in health care strategies to provide better patient outcomes • Central Health Brackenridge Campus redevelopment • Emergency Reserve maintains 15% of budgeted eligible expenditures • Maintain lowest tax rate of any major Texas Hospital District 2
Major Texas Hospital Districts: FY 2017 Tax Burden Comparisons 3
Major Texas Hospital Districts: Debt Principal and Payments Comparison $720 million in FY 2016 DEBT PRINCIPAL $ 9.5 million in FY 2016 DEBT PAYMENTS 4
Major Texas Hospital Districts: Per Capita Debt and Pension Comparisons 5
How Central Health Leverages Public Funding Fiscal Year 2016 Community Health Central Health Funding Care Impact Disproportionate $31M Share (DSH) • Care for low-income and uninsured Uncompensated $42.9M Hospital Costs $274.8M residents in Seton and St. David’s Care (UC) Hospital hospitals Services Charity Care $4.3M Hospital DSRIP $53.2M • More than 93,000 patient encounters DSRIP $22.8M Sendero Risk- $5M • More than 34,000 patients covered based Capital Health Sendero $86M • Medicaid, CHIP and ACA Coverage ACA Subsidized Marketplace plans $270K Premiums • More than 95,000 people served by DSRIP $27.7M Ambulatory the CCC CCC $123.7M Care • MAP eligibility now covers all CCC Member $24.6M residents below 50% FPL Payment Total $158.6M Total $537.7M Result: Central Health leverages public dollars to create 3.4 times their original value 6
5-Year Forecast: 4.5% Over Effective Property Tax Rate (in millions) 4.5% Over Effec8ve Property Tax Rate YOY $260 $240 $220 $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 FY18 FY19 FY20 FY21 FY22 Total Sources Total Uses Total Reserves Emergency Reserve 7
FY 2018 Proposed Tax Rate (4.5% over Effective Rate) FY18 FY17 (Proposed) Average Homestead $285,152 $305,173 Value Tax Rate 11.0541¢ 10.7385¢ Tax Bill $315.21 $327.71 Annual Increase = $12.50 (3.97%) Over 65 Disability Homestead Homestead Homestead Exemption Exemption Exemption 20%* $80,000 $80,000 $5,000 Minimum *Maximum allowable by state law 8
Share of Local Property Taxes Preliminary FY 2017 Travis County Tax FY 2018 Travis County Tax Entity Percentages Entity Percentages Austin Austin Community Community College College 5.0% 5.0% Central Central Health Health 4.3% 4.4% Austin ISD Austin ISD City of City of 55.6% 55.1% Austin Austin 20.2% 20.4% Travis Travis County County 15.3% 14.7% 9
Central Health Property Tax Impact Statement: Fiscal Years 2017-2018 FY 2017 FY 2018 FY 2018 FY 2017 Average FY 2018 Taxable Taxable Tax Rate Percent FY 2017 FY 2017 FY 2018 Annual Home Home Value Home Homestead Home (4.5% over Increase Tax Rate Tax Bill Tax Bill Increase Value Appreciation Value Value* Value* effective) $200,000 $160,000 11.0541¢ $177 9.00% $218,000 $174,400 10.7385¢ $187 $10 5.9% $300,000 $240,000 11.0541¢ $265 7.60% $322,800 $258,240 10.7385¢ $277 $12 4.5% $400,000 $320,000 11.0541¢ $354 6.30% $425,200 $340,160 10.7385¢ $365 $12 3.3% $500,000 $400,000 11.0541¢ $442 6.00% $530,000 $424,000 10.7385¢ $455 $13 3.0% * 20 percent homestead exemption 10
Community Care Collaborative Accomplishments and Initiatives FY 2017: • Expanded MAP eligibility • Improved case management • Expanded primary care • Improved specialty care • Implemented value-based care contracting FY 2018: • Expand specialty care service lines (dermatology, palliative care, rheumatology and oncology) • Improve specialty care referral process • Enhance consultation process from primary care to specialty doctors • Expand MAP and sliding fee patient benefits 11
Increasing Primary Care Visits Totals represent patient encounters for CommUnityCare and the CCC Primary Care Visits 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Projection 12
Dell Medical School Accomplishments and Initiatives FY 2017: • 130 Dell Med residents and fellows, and 49 faculty rotating in CommUnityCare clinics – Family medicine – Internal medicine – OB/GYN – Pediatrics – Psychiatry • Inaugural class begins working in clinical settings • Post-partum follow-ups increase from an estimated 40 percent to 79 percent at CommUnityCare FY 2018 • Begin clinical services at the Health Transformation Building • Third class of students begin 13
Central Health FY 2018 Proposed Budget Description FY 2017 Approved Budget FY 2018 Proposed Budget Sources Property Taxes $169,806,722 $181,839,054 Seton Lease Revenue 31,544,675 10,303,467 Interest 400,000 400,000 Tobacco Litigation Settlement 1,800,000 1,800,000 Subtotal Revenue 203,551,397 194,342,521 Contingency Reserve 36,600,000 57,886,845 Total Sources 240,151,397 252,229,366 Uses Healthcare Delivery 229,738,205 241,433,090 Administration 8,926,601 9,143,516 Tax Collection 1,486,591 1,652,760 Total Uses 240,151,397 252,229,366 Reserves (ending balance) Capital - - HMO Risk-based Capital Reserve - - Contingency Reserve - - Emergency Reserve 29,895,000 32,035,084 Total Reserves $29,895,000 $32,035,084 14
Central Health FY 2018 Proposed Budget Sources: $252.2M Uses: $252.2M (includes contingency appropriation of $28.6 million) Other 1% Lease Revenue Tax collection Administration 4% 1% 3% Contingency Reserve 23% Property taxes 72% Health care delivery 96% 15
FY 2018 Proposed Budget Expense Highlights CCC Member Payment • Expand MAP eligibility period • Specialty care • Expanded urgent care and convenient care network • Dell Medical School partnership Health Coverage • Sendero risk-based capital • Affordable Care Act subsidy program Health Care Initiatives • Women’s health, cancer care, health care workforce development Investments in Capital Projects • Rosewood-Zaragosa • Central Health Brackenridge Campus infrastructure • East Travis County collaboration 16
FY 2018 Proposed Budget: Central Health Brackenridge Campus FY 2017 Approved FY 2018 Proposed Description Budget Budget Building operations and management - $2,416,906 Campus infrastructure and development $2,047,675 1,943,738 Total $2,047,675 $4,360,644 Timeline • Operations transition September 2017 • RFP in process • Master developer agreement negotiated in 2018 17
FY 2018 Proposed Capital Budget Highlights • Rosewood-Zaragosa redevelopment—$4,700,000* • Brackenridge Campus infrastructure—$2,600,000 • Eastside infrastructure collaboration—$1,500,000 • Facilities maintenance—$350,000 • IT equipment—$250,000 *updated estimate 18
FY 2018 Proposed Budget– Uses/Health Care Delivery/IGTs FY 2017 FY 2018 Intergovernmental transfers: Approved Budget Proposed Budget IGT - Private UC $27,900,000 $27,900,000 IGT - Public UC 25,000,000 25,000,000 IGT - Disproportionate Share 32,500,000 35,000,000 IGT - CCC DSRIP 29,300,000 29,300,000 IGT - Seton DSRIP 26,250,000 29,000,000 IGT - St. David's DSRIP 620,000 620,000 Total $141,570,000 $146,820,000 The Federal and State Governments ul8mately determine the 8ming and amounts of federal matching funds. Assuming Central Health provided local funding (IGT) at FY 2018 budgeted levels, it is es8mated to draw an addi8onal $176.4 million of federal funds for a total (both local and federal funds) amount of $323.2 million. The total amount is 2.2 8mes the local funding amount 19
FY 2018 Proposed Budget– Uses/Health Care Delivery/Operations Description FY17 Approved Budget FY18 Proposed Budget Subtotal Intergovernmental Transfers $141,570,000 $146,820,000 Healthcare Services: Member Payment to CCC 26,245,166 29,245,166 Charity Care - Seton 4,251,733 4,251,733 Primary Care - Planned Parenthood 585,000 731,800 Integrated Care Collaboration (ICC) 617,275 666,657 Service Expansion 2,000,000 2,000,000 Subtotal Healthcare Services 33,699,174 36,895,356 Health Care Initiatives: UMCB Redevelopment and Operations 2,047,675 4,360,644 Health Care Initiatives: Cancer Care, Women’s Health, Workforce - 500,000 Development Subtotal Health Care Initiatives 2,047,675 4,860,644 Operating Expenses: Salary and fringe benefits 3,763,563 3,773,584 ACA education and enrollment 2,745,000 2,700,000 Health Promotion 353,713 358,713 Legal 25,000 26,200 Consulting 234,000 289,000 Other professional services 519,271 401,085 Marketing & community relations 523,500 557,326 Leases, security & maintenance 894,847 739,876 UT land lease for teaching hospital - 903,467 Phones, computer equipment & utilities 703,029 932,021 Printing, copying, postage & signage 194,269 198,694 Travel, training and professional development 34,339 47,044 Other operating expenses 207,369 234,892 Subtotal Operating Expense 10,197,900 11,161,902 Subtotal Healthcare Delivery IGT, Services, $187,514,749 $199,737,902 Initiatives and Operations 20
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