Introduction to Public Introduction to Public Hospital DistrictsHospital Districts

April 25, 2002April 25, 2002

Association of Association of Washington Public Washington Public Hospital DistrictsHospital Districts

Goals of the PresentationGoals of the Presentation

Define hospital district

Describe hospital districts and benefits of being a hospital district

Consider aspects of running a hospital district--including tax revenue

Provide an overview of hospital district formation

Definition of a Hospital DistrictDefinition of a Hospital District

Community supported governmental entities that deliver health care to their communities

Creation is authorized by Ch. 70.44 RCW

Special purpose taxing districts

Purpose is defined by statute

Different from other health care entities

Statutory “Purpose” of a Statutory “Purpose” of a Public Hospital DistrictPublic Hospital District

“…“…operate hospital and other operate hospital and other health care facilities…and to health care facilities…and to provide hospital… and other provide hospital… and other health care services for the health care services for the residents of such districts and residents of such districts and other persons.”other persons.” RCW 70.44.003

Definition of “other health care “other health care service”service” is broad RCW 70.44.007(2)

Hospital District Benefits from Hospital District Benefits from Local Government StatusLocal Government Status

Immunity from taxation (federal)

Exemption from taxes (state) Property taxes Business and occupation taxes Retail sales tax

Power of condemnation and eminent domain

Ability to tax

Public Hospital District Public Hospital District Governance StructureGovernance Structure

Hospital Districts have a 3, 5 or 7 member board

Elected commissioners appoint an administrator

Certain duties expressly specified in hospital district statute

Other PersonsOther Persons

District Treasurer

District auditor

Medical Staff

Employees

Conflicts of Interest:Conflicts of Interest:Basic RuleBasic Rule

Municipal officers are prohibited from “...being “...being beneficially interested, directly or indirectly, in beneficially interested, directly or indirectly, in any contract which may be made by, through, any contract which may be made by, through, or under the supervision of such officer in whole or under the supervision of such officer in whole or in part, or which may be made for the benefit or in part, or which may be made for the benefit of his or her office, or of his or her office, or accept directly or indirectly accept directly or indirectly any compensation, gratuity any compensation, gratuity or reward in connection with or reward in connection with such contract from any other such contract from any other person beneficially interested therein.”person beneficially interested therein.” RCW 42.23.030

MeetingsMeetings::The Open Public Meetings ActThe Open Public Meetings Act

““All meetings of the governing body of a All meetings of the governing body of a public agency shall be open and public public agency shall be open and public and all persons shall be permitted to and all persons shall be permitted to attend any meeting of the governing attend any meeting of the governing body of a public agency, except as body of a public agency, except as otherwise provided in this chapter.”otherwise provided in this chapter.” RCW 42.30.030

Public RecordsPublic RecordsHospital districts must make all public

records available for public inspection and copying

Some hospital district records are not public records

District should establish policies for accessing records

Property IssuesProperty Issues

Hospital District Bid Law bidding on construction projects required

Eminent Domain condemnation and

purchase of private land authorized

Surplus Property procedures for sale

or lease of surplus property must be followed

Sources of FundsSources of Funds

Tax LeviesTax Levies

Borrowed Funds

Patient Revenue

Taxing PowerTaxing Power::Regular/Maintenance Regular/Maintenance and Operation (M&O) Leviesand Operation (M&O) Levies

Authority to levy property taxes: Maximum levy rate limitation is $0.75 per $1000

assessed value ““Competition”Competition” with other local governments Levy lid is established by limit factors Impact

of I-747 Future initiatives

may also change law

Taxing PowerTaxing Power::Raising the Levy LidRaising the Levy Lid

Levy lid may be raised if a simple majority of voters approves an increase

Taxing PowerTaxing Power::One Year Special LevyOne Year Special Levy

One year levy, in excess of regular levy

Revenue may be used for any purpose

May be for any amount the voters approve

Supermajority and validation requirements must be met

General or special election

Taxing PowerTaxing Power: : Special Levy for Special Levy for Unlimited Tax General Obligation Unlimited Tax General Obligation

(UTGO) Bonds(UTGO) BondsNeeded if levy to pay debt service on

bonds exceeds the district’s regular levy

Supermajority and validation requirement

Amount levied is whatever is necessary to pay debt service on bonds

Bonds issued only for capital purposes

Taxing PowerTaxing Power: : Emergency Medical Services LevyEmergency Medical Services Levy

District authorized to run Emergency Medical Services (EMS) levy if no other EMS levies cover all or part of the district (Exception for county-wide EMS levy)

May impose a regular levy of up to $0.50 per $1000 assessed value for 6 years, 10 years or permanently, based on voter approval

Supermajority and validation requirementEMERGENCY

Hospital District FormationHospital District Formation

Governed by Chapter 70.44 RCW

More complicated that creating private entity

Procedure for forming district will depend on how boundaries relate to county boundaries

Sample Scenario: Hospital Sample Scenario: Hospital District Within A CountyDistrict Within A County

Precinct district boundaries must be maintained

May only be initiated through a public petition process

Hearing process requiredCounty commissioner resolution submits

proposal to electorate within the districtSimple majority of those voting must

vote “Yes” to create the district

CommissionersCommissioners

Elected from the same ballot that proposes hospital district formation

Terms of inaugural board members are fixed by statute ranging from one to six years

Greater number of votes means longer term in office

Commissioner DistrictsCommissioner Districts

Not a requirementTheoretically serve geographic

constituencies of the hospital districtMay be created at the same time as the

hospital districtMay be more trouble than they are

worth

Actions Taken Upon District Actions Taken Upon District FormationFormation

Adopt bylawsElect president and secretary

of boardDetermine number of

commissionersAdopt sealAdopt resolution for

commissioner compensation

More Actions Taken Upon More Actions Taken Upon District FormationDistrict Formation

Survey existing health care facilities and services

Adopt plan of improvements

Adopt budgetAppoint

superintendentDesignate auditor

ResourcesResources

www.awphd.orgwww.awphd.org

Thank you forThank you forlistening!listening!

Taya Briley, Director, Legal ServicesTaya Briley, Director, Legal Servicesand Health Policy and Health Policy

(206) 216-2554(206) 216-2554tayab@awphd.orgtayab@awphd.org