Cliffhanger

Just like a season finale in a rivoting television series, this thing ain't over. The Wishard referendum won in a landslide, but its not the end, its just a cliffhanger. Left to linger in anticipation for the next go round are the following issues:

For how long will Matt Gutwein and the Marion County Health & Hospitals Corporation be able to pay off the general obligation bonds with profits? When will they turn to property taxes, which, had they been totally honest about things, more folks would have known about when they voted. Will they just try to hide it in the budget and let taxpayers read it in their property tax bills?

Will the Legislature again pick and choose favored projects that they feel should escape the minimal requirements set for public questions?

Will the Star repair its reputation after flaunting itself so wantonly for Wishard?

Will any legal authority look into the use of public facilities, like the Mayor's office, the distribution of pro-literature to school children to take home, the decisions on where to locate satellite voting centers, etc., that were an assist to the landslide?

Will the feds decide the nursing home 'business' of H&H is too much like a scam to continue to qualify for higher fee payments than other nursing home businesses?

As the flashbulbs illuminate the raised champagne glass and the scene fades, remember to tune in next time as we resume the story.

What If....

What if the Wishard project referendum fully disclosed :

the cost of the project (maximum of $703,040,000),
the term of the bonds (maximum of 30 years),
revealed that the bonds would be secured with property taxes,
the lease arrangement with the Indianapolis-Marion County Building Authority,
that there would be two or more buildings whose function related to medical care,
that there would be one or more garage and/or parking lot,
that there would be a power plant built,
that the maximum annual payment would be $54,807,604,
which could end up with a maximum increase in the property tax rate of $0.1474 per $100 of assessed value,
and that the tax increase would be outside the property tax caps (so homesteads would pay up to 1% of gross assessed value PLUS up to $0.1474 per $100 of net assessed value)
that the total debt owed by all taxing units in Marion County secured by property taxes is $2,160,112,176,
that the maximum interest rate for the bonds would be 6.1.%,
that the maximum interest to be paid over the life of the bonds would be $830,478,858,
and that none of the preceding included the $120 million to be obtained through the Build America bonds (which is used to pay down interest) or the $150 million that Health & Hospitals has stashed away already for the project ???

What if they included in the referendum the very information they were required to publish in the public notice? Required to publish because it is pertinent information for the voters?.... What if they included that information in the actual referendum question?

At the end of the day I must assume that the reason they chose to be relieved of the onus of full disclosure in the referendum question, is that they were worried the public would reject their project due to the property tax guarantee for the repayment of the bonds.

Matt Gutwein, CEO of Marion County Health and Hospitals, Corp., says that they fully intend to repay with ongoing revenues, but are proposing bonds secured with property taxes because the interest on that type of bond is lower. That would be true if the bond buyers are reluctant to believe that the ongoing revenues are a sure thing for the next 30 years. Which of course begs the question, if savvy investors would reject the notion of an ongoing profit for Wishard, why should a savvy voter believe it?

But, anyway, what if full disclosure was the approach the Wishard folks had taken. What would the discussion then be? Well, I think it would be a closer scrutiny by the public of the cost figures, the proposed assortment of buildings, the amount of financial support Wishard should be getting from the IU School of Medicine, and how costs could be trimmed to simultaneously accommodate the needs of our County Hospital and be frugal with taxpayer dollars. Important points when you are the one who must repay the bonds with taxes you pay on your property. Not so important if you consider it all 'free'.

If H&H were to switch entirely to revenue bonds to finance the project, then no referendum would be needed. Looking at it the other way, if the outcome of the referendum is 'No', then H&H can still build its new Wishard campus, it just would have to switch to revenue bonds.

The County Hospital purpose fulfilled by Wishard is a very important one. It is an obligation, in my view, to be sure everyone can get access to medical care regardless of ability to pay. And, I do think it should be in decent facilities.

Here are the questions I would raise if the property tax issue were either fully disclosed or taken off the table:

What is the expected cost of each building?

Given the per square foot cost of the power plant is $1335.55, how much do you need that building? Will it generate efficiencies? If so, how long before the cost to build is recouped through the efficiencies? Would IUPUI or IU Medical School share in the utilities produced by the plant? If so, why are they not helping to pay for it? Would the plant generate energy through a green technology?

The 'faculty office building' -- who is it for? IU School of Medicine faculty? If so, why isn't IU helping to build that building?

In any case, why doesn't IU School of Medicine chip in for the cost of the new hospital or even pay an ongoing access fee for using it as a teaching hospital? They certainly gain from having new facilities to teach in and the faculty certain pull down added income by using the hospital and offices for a private practice on top of their teaching and/or research duties. IU School of Medicine charges tuition - why should they get the use of a teaching hospital for free?

Would you disclose the latest cost per square foot of comparable hospitals that were used for your projected costs?

How many beds would the new facility have and how many does the current facility?

Will the parking garage be just for patients and doctors, or would parking by University and/or School of Medicine personnel also be allowed. If the latter, why aren't those institutions chipping in for the cost of increased parking on their campus?

How does the Wishard role as the County Hospital include an outpatient facility? Perhaps I need an explanation of what indigent care is required and what care is provided for profit by Wishard. How much of the outpatient facility is for profit, and how much to fill a need that the other medical enterprises in town cannot fill.

Will the furniture and equipment in the current facility be moved to the new facility? Or, will it all be junked and all brand new equipment and furniture provided by the project? How much of the total cost is represented by new furniture and equipment?

And last but not least, the project you are proposing would increase the total Marion County debt secured by property taxes, by a whopping 33%. Is it wise to have so much debt or for so much of it to be encumbered by just one project?

Those are the questions that would come to me about this project if Gutwein and Co., weren't out there selling a referendum legally required because of bonds secured with property taxes, all the while saying they will not raise property taxes to repay the bonds. I think we deserve honesty from our government, even if it means they won't get their pet project built. At the end of the day, it isn't their government or their project, it is ours.

Wishard Referendum - Role of Legislature and Added Information

I want to take a short detour into the actions of the Legislature, that in the 11th hour of the last night of the 2009 Special Session, gutted the democratic process inherent in a referendum. Representative Bill Crawford and Senator Luke Kenley are the two names that arise most often as the major players in the special law written for Wishard. Whoever the players were, shame on you.

The referendum law for large capital projects requires the following wording:

"Shall ________ (insert the name of the political subdivision) issue bonds or enter into a lease to finance ___________ (insert a brief description of the controlled project), which is estimated to cost not more than _______ (insert the total cost of the project) and is estimated to increase the property tax rate for debt service by ___________ (insert increase in tax rate as determined by the department of local government finance)?".

The midnight insertion for Wishard provides that they can use the following wording:

"Shall the Health and Hospital Corporation of Marion County, Indiana, issue bonds or enter into a lease to finance (insert the description of the project)?".

The additional specifics must be provided in a legal notice that links the project information to the referendum. Of course, few people will see or read the legal notice. It has been provided at HadEnoughIndy previously. Unlike with other referenda, nowhere is the total cost of the project required, just the amount of the bonds that will finance the deal. So, as Matt Gutwein, CEO of the Marion County Health & Hospitals Corp., likes to brag about, there is a savings account with $150 million that H&H has managed to squirrel away. According to the Wishard project website, that $150 million will also be spent on this project and add to the bonded amounts that require disclosure and which were disclosed not to exceed $703 million. That website, by the way does not describe the project at all - no number or uses of the buildings - nothing - not even the artist renderings Gutwein has been hauling around the County. http://www.wishardfacts.org/ check it out, its just a PR piece.

Required of all referendum questions, is specific details, including per square foot charges, that are to be posted on the State Department of Local Government Finance website. The per square foot charges listed there for the Wishard project are:

Hospital building and ambulatory clinic - $635.96 (estimated).
Administrative office building - $286.43 (estimated).
Parking garage - $56.69 (estimated).
Central utility plant - $1,335.55 (estimated).

The per square foot information would be far more valuable if there were also an estimate of the total square footage of each structure. But, even the above information has value.

The 'central utility plant' has received very little attention. The only question I have heard posed, but not answered, was if it was going to be based on 'green' energy. Given the cost per square foot, renewed efforts to gain clarification of its purpose and usefulness, especially since there is access to electricity from more conventional sources, should be undertaken.

The Administrative office building is listed on the artist rendering, available through the IBJ, as 'Faculty Office', as in an office building for IU Medical Instructors. So, a good question is, why should Marion County taxpayers be on the hook, either through proceeds of its Health & Hospital Corp. or through increased property taxes, for a building to benefit the IU Medical School? Which, by the way, is contributing nothing to the project, either for construction or for ongoing operations, even though it is a vital asset as a teaching hospital for IU and provides its faculty with the opportunity to also have a private practice.

More questions to come in a future entry entitled "What If..." But, for this moment, lets not forget that the Legislature allowed our first public referendum to be watered down to essentially say "We do good works. Shall we continue?" Hopefully the democratic process promised by referenda will not be gutted for any future project and the rights of the voters will be held in higher esteem than shown for the Wishard project referendum.

Um - What Happened to No Property Taxes for New Wishard Project?

Matt Gutwein has been absolutely everywhere these days, selling the community on the "New Wishard Project" that is the subject of a public referendum on November 3rd. Mailings - glossy and not - as well as phone calls polling opinion. Who knows how much money H&H is spending on this blitz.

Since blogger Paul Ogden first broke the wimpy wording of the referendum question itself, others, including Advance Indiana's Gary Welsh, have questioned the use of property taxes to repay the bonds on the project. There remains the key, outstanding question, also, as to whether or not the referendum question legally binds the Health & Hospital Corporation (H&H) to any particular project for any particular sum of money. To me the wording can be boiled down to: "We do good works. Shall we continue?". When I brought that up at last Saturday's McANA meeting, Matt Gutwein said that the Board would be meeting on Tuesday (now two days ago) and the wording they adopt for the project's bonds would legally tie down the referendum question. I'll leave it to the legal scholars among us to decided if the two acts - board action on some bonds and a public referendum are legally linked in any way.

Over and over and over again Gutwein tells us how there will be no property taxes used to repay the bonds floated to pay for this project.

So, imagine my surprise when I saw the legal notice of the H&H Board's decision at it's Tuesday meeting to float bonds for the New Wishard Project. The notice is reprinted below, along with a link to the IndyStar's publication of same -- I don't know if the link will give tomorrow's public notice, so please use it today if you wish.

What I learned from the notice:
1) The bonds cannot be for any more than $703,040,000, and must be repaid within 30 years.
2) The Indianapolis-Marion County Building Authority will actually float the bonds and lease the facilities back to H&H.
3) "All or any portion" of the bonds may be repaid from "property taxes collected by the Health and Hospital Corporation on all taxable property within the geographical boundaries of Marion County, Indiana".

I have changed the typeface to bold for the property tax statement within the public notice and put it in the paragraph form found in the print version of the Star.

http://www2.indystar.com/webcat/classified/classlist?category=Public+Notices&page=12

THE HEALTH AND HOSPITAL CORPORATION OF MARION COUNTY, INDIANA NOTICE OF PRELIMINARY DECISION BY THE BOARD OF TRUSTEES OF THE HEALTH AND HOSPITAL CORPORATION OF MARION COUNTY, INDIANA, TO ISSUE GENERAL OBLIGATION BONDS AND TO ENTER INTO A PROPOSED LEASE OR LEASES OF FACILITIES OPERATED OR TO BE OPERATED BY THE HEALTH AND HOSPITAL CORPORATION IN CONNECTION WITH THE WISHARD HOSPITAL PROJECT

Notice is hereby given that on September 22, 2009, the Board of Trustees of The Health and Hospital Corporation of Marion County, Indiana (the “Health and Hospital Corporation”), did adopt a resolution making a preliminary decision: (1) that a need exists for all or any portion of the construction and equipping of a replacement hospital and related facilities for Wishard Health Services currently located at 1001 West Tenth Street (the “Wishard Complex”), together with land acquisition and site development related thereto and all projects and activities related to any of the foregoing, including, but not limited to, all or any portion of the following: (a) acquisition of land and any improvements located thereon and any site development related thereto, (b) renovation and equipping of any such buildings, and the construction and equipping of one or more buildings which will replace the existing hospital and related facilities for the Wishard Complex and provide all or any portion of (i) inpatient services, (ii) diagnostic and treatment, (iii) clinical support, (iv) non-clinical support, (v) offices and education, and (vi) public and building functions (c) construction and equipping of a new ambulatory care building, (d) construction and equipping of one or more related parking garages and/or surface lots, (e) construction and equipping of a central plant for all of the foregoing facilities, and (f) all projects related to any of the projects or facilities described in clauses (a) through and including (e) (clauses (a) through and including (f), collectively, the “Wishard Hospital project”); and (2) to the extent permitted by law, to take all of the necessary steps to finance all or a portion of the costs of all, or as much as is possibly based on the facts and circumstances at the time, of the Wishard Hospital project by: (a) entering into a proposed lease or leases (collectively, the “Lease”) between the Indianapolis-Marion County Building Authority (the “Building Authority”), as lessor, and the Health and Hospital Corporation, as lessee, relating to all or any portion of the Wishard Hospital project operated or to be operated by the Health and Hospital Corporation; and (b) issuing one or more series of general obligation bonds of the Health and Hospital Corporation (the “General Obligation Bonds”). The Building Authority will issue one or more series of revenue bonds, as lessor, secured by and payable from the lease payments under the Lease (the “Revenue Bonds”).

All or any portion of the Health and Hospital Corporation’s payments of principal of and interest on the General Obligation Bonds and/or rental payments under the Lease may be payable from ad valorem property taxes collected by the Health and Hospital Corporation on all taxable property within the geographical boundaries of Marion County, Indiana. The proposed General Obligation Bonds and Revenue Bonds (collectively, the “Bonds”) shall be issued in an original aggregate principal amount not to exceed $703,040,000. The maximum term of each series of the Bonds will be 30 years, and the Bonds will bear interest at a rate or rates estimated not to exceed 6.16% per annum. Dated this 25th day of September, 2009.THE HEALTH AND HOSPITAL CORPORATION OF MARION COUNTY By: Dan Sellers, Treasurer (S - 9/25/09, 10/2/09 - 5543528) - 09/25