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UMC, County meet again to try and hammer out budget

By Staff Report
Published On: Aug 13 2014 04:21:03 PM CDT
Updated On: Aug 14 2014 12:28:28 PM CDT
Umc budget

UMC approves 2015 budget

EL PASO, Texas -

University Medical Center's Board of Managers continues to wrangle with its budget.

This afternoon, they met with El Paso County commissioners in a special budget workshop.

Commissioners must approve the budget presented by UMC, which is the county's public hospital district.

Topics discussed included UMC's effective tax rate and financial health.

The hospital last month laid off 56 employees and has proposed further cuts to deal with its budget shortfall. They are also proposing an "effective tax rate."

The hospital said this will keep the tax rate the same for homeowners, but generate more revenue for the hospital due to new construction.

Commissioner Vince Perez disagreed, saying, "A lot of governmental agencies will say, well, we're not raising taxes we're starting at the 'effective tax rate.' But in the case of UMC, the effective rate is higher than the tax rate they adopted last year. There is a chance, base depending on, your own property value that you might see a slight tax increase."

UMC's tax rate last year was $0.21 cents per $100 of home valuation. This year they are proposing $0.22 cents at the effective rate.

UMC officials partly blame a debt of more than $70 million from the neighboring El Paso Children's Hospital, for which UMC provides some services.

Children's disputes that amount.

During the meeting, UMC's CEO Jim Valenti said UMC considered 15 furlough days for its employees but administrators considered that was too severe and brought it down to five mandatory furlough days which would save $1.3 million.

He also stressed there is no hiring freeze at UMC, as they continue to hire nurses and doctors.

County commissioners asked UMC board how things changed within a year's time and how it is a different environment from last year.

"UMC will continue to be an amazing beacon in this community," said UMC board member, Brother Nicolas Gonzalez.

Umc CFO Michael Nunez revealed during the meeting that El Paso Children's Hospital receivables moves quickly and that last year's Children's receivables was $53 million.

But towards the end of 2013, a Children's Hospital auditor told Children's officials to "slow down."

UMC said they were alarmed, then found out there would be no more payments as of this March from Children's and in early April, UMC began taking emergency measures.

Valenti has said UMC was told Children's will not be able to provide any more payments in 2014 or 2015.

Commissioner Patrick Ablen asked whether UMC was given misleading financial statements by Children's former financial team. Valenti replied that team is no longer at Children's, and he has faith in the current management team, made up of Children's board Chair Sam Legate and CEO Ray Dziesinski.

Commissioner Patrick Ablen said, ""I think all of us have a great deal of confidence in the new management team at Children's, we have confidence in the existing management team at UMC. And the very best outcome is those outcome is those two teams working together and come to a resolution that's a win-win for both, I think that's possible."

The next budget meeting will be in two weeks.

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