EDINBURG, RGV – Key stakeholders say they are making good progress on a Memorandum of Understanding that will be presented to voters when they decide in November on whether to set up a hospital district in Hidalgo County.

The stakeholders, – state Sen. Juan Hinojosa, the CEOs of the largest hospitals in the county, representatives from the largest cities in the county, and Hidalgo County Judge Ramon Garcia, representing Commissioners Court – met privately at Garcia’s law offices in Edinburg on Monday afternoon.

“I think we went a long way towards getting this matter resolved today. We are not there yet but we are almost there,” Garcia told the Guardian after the meeting had ended.

The MOU is needed because language in Sen. Hinojosa’s legislation to set up a hospital district is different from how the hospital district will look. For example, the tax rate cap in the legislation stands at 75 cents per $100 of property valuation. Stakeholders have agreed to set the cap at 25 cents. Hinojosa will tweak his legislation when the Legislature meets in Austin in January.

“We will have in the language of the Memorandum something to the effect that no appointments will be made if it passes in November; that no appointments will be made, no actions will be taken until the legislation is changed in accordance of the terms of the Memorandum of Understanding,” Garcia told the Guardian.

Hidalgo County Judge Ramon Garcia says Commissioners Court will have oversight of Hidalgo County Hospital District's budget and tax rate.
Hidalgo County Judge Ramon Garcia says Commissioners Court will have oversight of Hidalgo County Hospital District’s budget and tax rate.

Garcia said the voters of Hidalgo County will be made aware that the hospital district would start out with a tax rate of seven or eight cents per $100 of property valuation.

“Even then, whatever budget is set, whatever tax rate is set, in future, by the hospital district’s board of directors, it will be subject to review by Commissioners Court. And, even if Commissioners Court approves it, it will still be subject to the roll back provision of the Texas statute. Therefore we are going to have the board acting, the Commissioners court overseeing their actions and the community overseeing the actions of the Commissioners court and the board as it relates to setting tax rates,” Garcia said.

In an interview with the Guardian following last Tuesday’s Commissioners Court meeting, Garcia said more discussions were needed among stakeholders because he wanted the role of the hospital district to be clearly defined. He said he saw two purposes, helping to fund the UT-Rio Grande Valley medical school and taking over responsibility from the County of health care for the indigent. “Beyond that, I was not aware what the purpose was and I needed to get that defined,” Garcia said Monday.

Garcia said it is crucial that all stakeholders display a united front on the MOU to assure voters of the merits of the hospital district. “The stakeholders need to be united. Commissioners Court has not voted on it yet so I cannot say there are agreements. And, the cities have to go back and agree also. I can tell you the Court will have more input on what the operations of the district are. Hopefully we will be able to get a cap on the expenditures of the district put in place.”

As for the composition of the hospital district’s board of directors, county commissioners have voted for a seven-member panel, with five appointees made by the Court and two by the cities. The cities want a nine-member board, with five appointees made by the Court and four by the cities. McAllen, Edinburg, Pharr and Mission would have one representative each under this proposal. “At any event, the Court would still have the majority of the members of the board,” Garcia said.

Stakeholders need to agree soon on the MOU because the deadline for Commissioners Court to put the hospital district issue on the Nov. 4 ballot is Aug. 12.

The largest cities in Hidalgo County are involved because they are ponying up some of the money needed to launch the UT-Rio Grande Valley Medical School. McAllen has promised to pay $2 million a year for the first five years, Edinburg $1 million a year for the first five years, and Pharr and possibly Mission $500,000 a year for the first five years. Once the hospital district is up and running the cities will not have to pony up the money for the medical school. Instead, the funds will come from a tax levied by the hospital district.

Edinburg City Manager Ramiro Garza says he is not fazed by county commissioners wanting majority control of the hospital district. Asked, after last week’s Commissioner’s Court meeting, what he thought about the large cities only having two voices on the hospital district, Garza said: “We are not looking at it that way. We are looking at it in terms of moving the process along. Our goal is to get the medical school in place here and this is part of the process. The Court has voted on two important things, they voted to move things along towards getting the hospital district on the ballot this November and they voted on the MOU for the medical school, which secures the funds and the commitment of the cities for the creation of the medical school.”

On the composition of the hospital district’s board, Garza said he is sure the county and the cities will come up with a compromise everyone can live with.

“We are going to have an MOU between the counties and cities that outlines those issues that County Judge Ramon Garcia has outlined, that the cap is going to be at 25 cents and what the board make-up is going to be. We are going to have an MOU that the Senator is going to use to amend his legislation that allows for the setting up of a hospital district,” Garza added. “I am glad see the process moving along.”

McAllen Mayor Roy Rodriguez told the Guardian that the City of McAllen deserves to have a big say on what the hospital district looks like and the parameters it will work within because there is so much property wealth within the city limits.

“There is more than one issue that I think the cities are going to have to agree on (in order to finalize the MOU), not just the composition of the board of directors,” Rodriguez said. He confirmed that McAllen has made a commitment for five years towards helping pay for the medical school. Because McAllen has more than 40 percent of the property wealth in Hidalgo County, “we believe we need to be a large part of this discussion,” Rodriguez added.

Sen. Hinojosa spoke at last week’s Commissioners Court meeting about the hospital district. Afterwards he was peppered with questions from reporters and members of the public about the project. He explained in detail why the district would be beneficial to the county.

“If we don’t set up the hospital district and we cannot bring down the matching funds that means we will pay extra costs in taking care of the indigent. More than what we are already paying. The hospital district can draw down three dollars for every dollar it raises. Hidalgo County by itself cannot do that.

“In the past the hospital districts around the state would pool their money and allow counties that did not have a hospital district to use their taxpayers’ money to draw down matching federal funds. The federal government did away with the Upper Payment Limit program and created a new program called the 1115 Waiver. Under the 1115 Waiver those counties with a hospital district no longer wanted to share their monies with Hidalgo and other counties that did not have a hospital district.

“So, we created legislation to set up a provider fund that included three counties, Cameron, Hidalgo and Webb counties. The hospitals then assess themselves a fee and deposit that fee in a provider fund that was controlled by the county. You needed a governmental entity. Those monies were used to draw down 1115 Waiver funds. It was almost 3-1. Those monies are then used by the hospitals to take care of the indigent.

“But that has a sunset provision and will expire in 2015. So, once it goes away we have no mechanism in place other than to extend that for another two, or four years, to be able to bring down matching funds from the federal government. The health care issue is pretty confusing and complex.”

OWLS (Objective Watchers of the Legal System) leader Fern McClaugherty asked Hinojosa if he was not trying to “get blood out of a turnip” because taxpayers are so “overburdened” these days. Hinojosa responded:

“Go into any other county that has a hospital district. They have brought in thousands of new jobs. They brought in hundreds of health-related businesses. They expanded their property tax base and lowered the property taxes on a long term basis. Go to northwest San Antonio and you will see the impact that a medical school and a hospital district had on an economy. They created thousands of jobs, bringing in many health-related businesses that paid higher wages than the minimum wage. At the same time they added state of the art medical equipment to improve healthcare, not just for the poor but for all of us. There was nothing there (in northwest San Antonio) before (the medical school),” Hinojosa said.

“What we are talking about is a medical school that will produce more doctors, create more access to healthcare, increase the quality of care and on top of that bring in health-related businesses that will create thousands of new jobs and bring state of the art equipment. At the same time the tax base will expand. Every county that has had a medical school has proven to be very successful.”