Chairman Jeff Turner said at Tuesday’s meeting he felt the Southern Regional Medical Center needed the full $9 million they asked for to stay afloat. (Photo by Curt Yeomans)
JONESBORO — Clayton County Board of Commissioners failed to approve a budget Tuesday night after members disagreed on how to support Southern Regional Medical Center.
A budget must be approved by June 30, according to state law.
Under state law, Southern Regional Medical Center must offer free care to patients who can’t pay for it. Because of the law, the hospital will be short about $12 million for fiscal year 2015.
The 2015 SPLOST voters passed in May kicks in $3 million of that money, but providing the additional $9 million has become a problem.
“Do we need a hospital? Yes,” said Chairman Jeff Turner. “How do we help the hospital? That’s what we need to decide as a board.”
The budget that Chief Financial Officer Ramona Thurman presented to the board Tuesday budgeted $5.7 million to the hospital from the county’s general fund. If the board members wanted to pay the hospital the requested $9 million, they would have to raise the millage rate 0.75 mils on top of the 0.3 mil raise the budget already suggested.
The 1.05 mil increase would mean a resident with a house worth $150,000 in incorporated areas of Clayton County would need to pay an additional $52.70 a year. Residents in unincorporated Clayton County with the same value house would need to pay an additional $15 on top of that.
“So, for an individual — like myself — that lives in unincorporated Clayton County, my tax bill would go up $67.70 for next year,” Thurman said.
The board seemed reluctant to consider a raise in property taxes and Turner asked Thurman and Financial Advisor Ed Wall if the full $9 million could be taken directly out of the general fund. Thurman and Wall agreed that could be considered an option — but for one year only.
“We can’t sustain $9 million out of fund balance every year,” Thurman said. “We would eventually have to do something other than paying out of fund balance. If we do the $9 million this year, our fund balance would be at $49 million the next year. We wouldn’t be able to do the $9 million the next year out of fund balance. That would almost deplete us down to where we don’t want to go.”
Taking the $9 million out of the fund balance would be only a one-year plan, but Commissioner Michael Edmondson said he thought it might be best to plan year-by-year in light of the economic change coming to Clayton County.
“Next year, whether we raise taxes, lower taxes or keep them the same — that’s a year from now,” he said. “I’m in favor of increasing the budget from the $5.7 million to the full $9 million and then we deal with next year and hope the Affordable Health Care Act fixes it or the tax digest goes up or all these new jobs being created in Clayton County help these people get insured health care.”
Thurman said it was unlikely the economic changes in Clayton County would eliminate the need to raise the millage rate to help the hospital in coming years, but she acknowledged the millage rate may not need to be raised by as much as 0.75.
Edmondson made a motion to pay the hospital the full $9 million out of the fund balance, but it was voted down by commissioners Sonna Singleton, Gail Hambrick and Shana Rooks.
Rooks said she wasn’t in favor of raising the millage rate either — but she didn’t feel comfortable giving the hospital $9 million out of the general fund’s budget. She suggested the county give $5.7 million without raising the millage rate to give the hospital the full $9 million.
“I’m hoping they can cut more expenses,” she said.
Not Edmondson, Turner nor the audience seemed optimistic about that proposal.
“I don’t believe the hospital can cut an additional $3.3 million,” Edmondson said. “I’ve attended all those meetings over the last nine months with our chairman and with our CFO and with our financial advisor and our legal council and their financial advisers and their legal council. I’m convinced that there’s not enough to cut — not that deep.”
Rooks made a motion to give the hospital only $5.7 million, but the motion died without receiving a second.
“The hospital needs to be saved,” Turner said. “We need to come up with $9 million some kind of way.”
But both Hambrick and Singleton said they felt uncomfortable bailing out the hospital year after year without seeing the hospital’s plan to eventually improve on its own. Both said they didn’t want to let the hospital fail, but that they wanted to make sure it could eventually operate without help from the county.
“[In the past] we made sound financial decisions based on the fundamental premise of sustainability,” Hambrick said. “Simply put, if we created an ongoing expense, we needed to identify an ongoing revenue. Sadly, the budget being presented tonight is not based on this sound fiscal principle.”
Hambrick and Singleton also felt taxpayers were misled to believe voting on 2015 SPLOST would completely take care of Southern Regional Medical Center’s financial problems.
The board needs to hold a special called meeting and agree on a plan for aiding the hospital before June 30. If members fail to agree by the end of the month, the county will be breaking state law and could lose its revenue from the hotel and motel tax.
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