Central Health Fiscal Year Update and Five-Year Financial Forecast

Transcription

1 Central Health Fiscal Year Update and Five-Year Financial Forecast Central Health Board of Managers May 24, 2017 Jeff Knodel, CFO Lisa Owens, Interim Deputy CFO

2 Five-Year Forecast is an Estimate Numbers developed based on broad assumptions and conservative estimates A proven tool to guide the Board of Managers in long-term financial decision making regarding the property tax rate Serves as a tool to identify revenue and expense trends and frame related policy issues Forecast is based on reasonable present day assumptions 2

3 External Factors Dell Seton Medical Center at The University of Texas opened May 21 Inaugural Dell Medical School class concludes first year in summer 2017 Uncertainty surrounding federal and state legislation, including the 1115 Medicaid Waiver Economy continues to increase at a rapid rate with low unemployment Taxable assessed values continue to increase Central Health continues to have the lowest tax rate of major Texas hospital districts Highest concentrations of low-income and uninsured residents continue to shift to eastern Travis County and suburbs 3

4 Projected Taxable Values by Tax Year Taxable Assessed Values Percent Change Year-Over-Year (in billions) $ % $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $ % 10.0% 5.0% 0.0% -5.0% -10.0% Taxable Assessed Value % YOY Projected 4

5 Local Property Tax Rates FY 2016 Travis County Tax Entity Percentages Austin ISD 53.7% Travis County 16.1% City of Austin 20.9% Austin Community College 4.8% Central Health 4.5% FY 2017 Travis County Tax Entity Percentages Austin ISD 55.1% Travis County 15.3% City of Austin 20.2% Austin Community College 5.0% Central Health 4.4% Jurisdiction Fiscal Year 2017 Property Tax Bill for Homestead Assessed at $356,438 Tax Rate (cents per $100 of valuation) Value Before Exemptions Reduction in Taxable Value from Homestead Exemption Average Taxable Value after Homestead Exemption FY 17 Property Tax Bill Percentage of Total Travis County $356,438 $71,288 $285,150 $1, % Central Health ,438 71, , % City of Austin ,438 28, ,923 1, % Austin ISD ,438 25, ,438 3, % Austin Community College ,438 5, , % $7, % 5

6 Tax Rate Comparison Tax rate = cents per $100 of property valuation Fiscal Year 2017 Major Hospital District Tax Rates Parkland University Health JPS El Paso Harris Health Central Health

7 Current Year Budget Highlights FY 2017 In partnership with Seton and the Dell Medical School, continue to fund, innovate and improve the delivery of safety net health care, via the Community Care Collaborative: $26.2M Tax rate of cents per $100 of property valuation 4.5% over FY 2017 effective rate Decrease from FY 2016 rate of cents/$100 Intergovernmental transfers budgeted at $141.6 million for local match for federal funds Timing issues no longer exist Investment in Sendero: $6 million Additional $1.4 million to Central Health s Emergency Reserve Fund 7

8 FY 2017 Year-End Forecast (in millions) Fiscal Year 2017 Sources of Funds Approved Estimate Ending Property Tax Revenue $169.8 $169.8 $0.0 Seton Lease Revenue (2.2) Other Revenue Total Revenue (2.2) Contingency Total Sources Uses of Funds Intergovernmental Transfers Indigent Care Payment to CCC Charity Care ACA Education and Enrollment Health Promotion Service Expansion Funds Personnel & Operating Transfer to capital Reserve Sendero Risk-based capital Transfer to Emergency Reserve Contingency Debt Service Administration Tax collection Total Uses Ending Balance - Contingency Reserve $49.8 8

9 Central Health Reserve Funds Emergency Reserve Funding source for dire necessities that arise from unusual circumstances 15% of eligible expenditures per best practice guidelines FY 2017 ending balance: $29.9M Contingency Reserve Funding source for one-time expenditures or for ongoing expenditures when needed for cyclical or temporary structural deficits FY 2017 estimated ending balance: $49.8M Capital Reserve Established to fund capital assets of projects FY 2017 estimated ending balance: $6M 9

10 Five-Year Forecast Assumptions Covers FY Taxable assessed property values continue to rise but at a slower rate UMCB hospital operations moving; anticipate reduced lease revenue due to relocation of services from UMCB to Dell Seton Medical Center at The University of Texas Central Health assumes costs to operate UMCB campus beginning late FY Medicaid Waiver remains in place: DSRIP and UC funding remain intact Sendero adequately capitalized over forecast period Includes value of service inflator beginning in FY 2020 Cost drivers: Salaries/benefits 4% Health care delivery providers 8% Contractual services 5% 10

11 Five-Year Forecast Health Care Delivery Expenditure Highlights (in millions) Uses of Funds FY 18 FY 19 FY 20 FY 21 FY 22 Intergovernmental Transfers $141.6 $144.6 $146.6 $148.7 $151.4 Central Health Member Payment to CCC Service Expansion Funds Capital Reserve Transfer Intergovernmental transfers Federal match rate decrease assumed More local share required to draw same amount of federal funding Central Health member payment to the Community Care Collaborative increases by $2M per year Service Expansion Funds at $2M annually Capital Reserve Transfer at $2.2M in FY18, then $1.5M annually 11

12 Five-Year Forecast Expenditure Summary (in millions) FY 18 FY 19 FY 20 FY 21 FY 22 Health Care Delivery and Operations* $204.0 $205.3 $211.7 $217.4 $222.8 Administration Total Expenditures $213.0 $214.6 $221.4 $227.4 $233.2 % Increase YOY 4.7% 0.8% 3.1% 2.7% 2.6% *excludes con,ngency reserves 12

13 Projected Brackenridge Campus Lease Revenue (in millions) $40 $35 $30 $25 $20 $15 $10 $5 Seton Lease Revenue - Budget $0 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 13

14 4.5% Over Effective Property Tax Rate Year-Over-Year (in millions) 4.5% Over EffecCve 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 FY18 FY19 FY20 FY21 FY22 Total Sources Total Uses Total Reserves

15 4.5% Over Effective Property Tax Rate Maintain Same Strategy as Last Year 4.5% Over EffecCve Property Tax Rate YOY $240 $220 $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 4.5% Over EffecCve Property Tax Rate YOY FY18 FY19 FY20 FY21 FY22 Total Sources Total Uses Total Reserves Emergency Reserve 2016 Projection 2017 Projection FY17 FY18 FY19 FY20 FY21 Total Sources Total Uses Total Reserves FY18 FY19 FY20 FY21 FY22 Total Sources Total Uses Total Reserves

16 Recommendation Central Health staff recommend preparation of the FY 2018 proposed budget at a property tax rate of 4.5% over the effective rate to achieve priorities approved by the Board of Managers in the Central Health Strategic Plan while the University Medical Center Brackenridge Campus is being developed. 16

17 Next Steps May 30 Travis County Commissioners Court (FY 2017 update and FY 2018 budget guidelines) June 21 Central Health Budget and Finance Committee (proposed budget) June 28 Central Health Board of Managers (budget update) July 19 Central Health Budget and Finance Committee (FY 2018 CCC proposed budget) July 26 Central Health Board of Managers (FY 2018 CCC proposed budget and Central Health budget update) Aug. 9 Central Health Budget and Finance Committee (FY 2018 Central Health proposed budget and property tax rate) Aug. 16 Central Health Board of Managers (FY 2018 Central Health proposed budget and property tax rate) Aug. 22 Travis County Commissioners Court (Central Health proposed budget and property tax rate) Aug. 30 First public hearing Sept. 6 Second public hearing Sept. 13 Central Health Board of Managers (FY 2018 budget adopted) Sept. 20 Travis County Commissioners Court (FY 2018 Central Health proposed budget and property tax rate) 17

18