Why the Special Hospital District will not pass along more debt?

Sublette County currently has a Rural Health Care District.  When it was approved by the voters in the past, the Rural Health Care District was enough.  Since that time, our community has grown, and the healthcare needs have grown with it.  Our community is ready for a Hospital District. 

You might ask what the difference between a Rural Health Care District and a Hospital District is – in a nutshell, a Rural Health Care District can tax up to 2 mills without asking the voters for more, with a total possible of 4 mills; while a Hospital District can tax up to 3 mills without asking the voters for more, with a total possible of up to 6 mills with voter approval.

With the Rural Health Care District mills, the extra 2 mills, once approved by the voters, stays in place permanently until repealed by the voters.  In contrast, with the proposed Hospital District, the voters get to vote on the additional up to 3 mills every 4 years – giving the voters more control.  See Wyoming Statutes § 35-2-708(e) and § 35-2-414(c).

 Some have been trying to scare voters away from voting for a much-needed Hospital District by pointing to statutes that allow Hospital Districts to ask pass on debt to the voters without their approval. The Sublette County Rural Health Care District currently does not have any long-term debt.  If the Hospital District is approved, then it will apply to the USDA for a loan. 

Lorraine Werner of the USDA writes:

“If this application is approved and the Letter of Conditions is issued, no other debt can be issued by the borrower without prior approval of the Government.  The government takes all security, so without our permission other debt, lines of credit, or additional liens cannot be placed on the project.  That is one of the reasons we require a capital needs reserve and a debt service reserve to be established at the very beginning of the loan.  This will be included in the underwriting and the feasibility of the project.  A line of credit should not be needed because start-up costs will be addressed in the feasibility study and will be part of the funding package.  Finally, if this is approved, you will be required to submit quarterly financials to our office for the first two years from closing.  If there are no issues we will go to yearly financials, if there are problems with cash flow (sustainability)  we will continue quarterly reviews and present ideas, tools, to help with the project’s sustainability.  We are a hands on agency.”

Some have also been trying to scare voters away from voting for a much-needed Hospital District by pointing to statutes that allow Hospital Districts to ask voters to approve bonds for construction, facilities, and equipment.  Bonds are the way for a Hospital District to acquire debt (though as noted above if the USDA loan is approved than the USDA will not allow further debt).   The funny thing is, Rural Healthcare Districts have similar rights to ask for bonds under Wyoming Statute § 35-2-709.  Whether we operate under a Rural Health Care District or a Hospital District, the voters have the right to approve or deny any bond proposal – Hospital Boards do not get to decide this, the voters do.

Wyoming Statute § 39-13-104(e)(ii) summarizes these powers for Hospital Districts and (e)(xi) summarizes these powers for Rural Health Care Districts.  It does not grant additional taxing powers to either type of entity.

To sum up – any extra mils need voter approval.  The RHCD currently has no debt.  Any further debt that might be acquired by issuing bonds, needs voter approval.  And if the USDA application is approved to build a new hospital, the USDA will not allow any further debt to be accrued.

If you have questions about why Sublette County should vote for a Hospital District, please contact the Hospital District Political Action Committee at 307-231-3210, and please vote for Sublette County to form a Hospital District!

Can a Special Hospital District raise taxes to 6 mills without voter approval? What about a bond?

The simple answer is no it can't. Although state statute allows for up to 6 mill levies, the Special Hospital District is prohibited by state law from obtaining an increase without voter approval. According to state law, any future mill levy increases must be first approved by the Sublette County Commissioners to be placed on the ballot and then must be passed by a majority of voters in the county.

A bond deal is not even remotely applicable at this point. But if the Special Hospital District pursued a bond deal, THE COMMISSIONERS WOULD HAVE TO APPROVE PUTTING IT ON THE BALLOT, AND THE VOTERS WOULD ONCE AGAIN VOTE ON THIS QUESTION.  

According to the latest Eide Bailly Forecasted Financial Statement, a critical access hospital in Sublette County is very sustainable. The forecasted report already examined the ability of the hospital to pay off the USDA loan and the projected debt to service ratio is excellent.  A critical access hospital would generate an estimated $7 million more revenue than the existing Rural Health District clinic system. Medicare reimbursements at current vary from roughly 40-60% at clinic designation, but a hospital designation would give us cost-based reimbursements at a level of 101%.  

Here is a breakdown of the state statutes about mill levies:

The commissioners can set the mill for a hospital district but cannot exceed 6 mills. The hospital can levy 3 mills initially. If they want to increase the mill levy beyond 3 mills, the county commissioners must have an election, and the voters decide whether the mill levy should be increased over the 3 mills. 

Wyo. Stat. 39-13-104 says a couple of pertinent things:

(b) There shall be annually levied and assessed upon the taxable value of property within each Wyoming county the following county taxes when applicable:

(i) Not to exceed 12 mills as determined by the board of county commissioners which shall include mill levies, if any, for the following purposes:

(A) The number of mills to be dedicated to the operation of a county hospital.

Then if you head to (e) There. shall be annually levied and assessed upon the taxable value of property within the limits of the following special districts the following special district taxes when applicable:

(ii) Nor to exceed 6 mills by a hospital district as provided by Wyo. Stat. 35-2-414(b), (c), and (d) plus the number of mills necessary for the payment of the district debt plus interest thereon, not to exceed the limitations prescribed by Wyo. Stat. 35-2-415.

Wyo. Stat. 35-2-414:

(b)The board of county commissioners, at the time of making the levy for county purposes shall levy a tax for that year upon the taxable property in such district in its county for its proportionate share based on assessed valuation of the estimated amount of funds needed by each such district, but in no case shall the tax for such district exceed in any one (1) year the amount of three (3) mills for operation on each dollar of assessed valuation of such property except as provided by subsection (c) of this section. There shall be no limit on the assessment for the payment of principal and interest on bonds approved by the board of county commissioners and approved by the electors of the district as provided in W.S. 35-2-415. The taxes and assessments of all special hospital districts shall be collected by the county collector at the same time and in the same manner as state and county taxes are collected, provided, however, said assessment and tax levied under the provisions of this act [§§ 35-2-401 through 35-2-421] shall not be construed as being a part of the general county mill levy.

(c) Notwithstanding subsection (b) of this section, if the board of trustees votes to increase the mill levy beyond three (3) mills as authorized by subsection (b) of this section, the board of county commissioners shall call an election within the district upon the question of whether the mill levy should be increased beyond three (3) mills. The election shall be called, conducted and canvassed as provided for bond elections by the Political Subdivision Bond Election Law, W.S. 22-21-101 through 22-21-112, on the first date authorized under W.S. 22-21-103 which is not less than sixty (60) days after the trustees vote to increase the mill levy beyond three (3) mills. In no event shall the tax in a district exceed in any one (1) year the amount of six (6) mills for operation and maintenance on each dollar of assessed valuation of property. The increase in mill levy is effective only if the question is approved by a majority of those voting thereon within the hospital district. The cost of any special election under this subsection shall be borne by the board of trustees.

So what why not pursue a bond instead?

There is no limit on the payment of principal and interest on BONDS that HAVE BEEN APPROVED BY THE SUBLETTE COUNTY COMMISSIONERS AND THE VOTERS!!!! The bond deal is not even remotely applicable at this point. If the Special Hospital District pursued a bond deal, THE COMMISSIONERS WOULD HAVE TO APPROVE PUTTING IT ON THE BALLOT, AND THE VOTERS WOULD ONCE AGAIN VOTE ON THIS QUESTION.

Wyo. Stat. 35-2-415: The board of trustees of a hospital district may upon approval of the board of county commissioners submit to the electors of the district the question whether the board shall be authorized to issue the general obligation coupon bonds of the district in a certain amount, not to exceed five percent (5%) of the assessed value of the taxable property in the district, and bearing a certain rate of interest, payable and redeemable at a certain time, not exceeding twenty-five (25) years for the purchase of real property, for the construction or purchase of improvements and for equipment for hospital purposes.

Why doesn't the RHCD just raise 1 more mil themselves?

A Special Hospital District is the only option that allows the Sublette Center to merge as an equal partner. The Sublette Center Board majority and the Sublette Center administration agree that this is the best path forward to combine the two organizations. Without the new Special Hospital District, the Sublette Center and the Sublette County Rural Health Care District (RHCD) cannot officially merge because you cannot merge a nonprofit with a governmental entity. The RHCD would have to acquire the Sublette Center, and the Sublette Center would risk losing their voice. A Special Hospital District would allow a true merger where both entities could be equally represented.

The idea for a critical access hospital began roughly six years ago under a different RHCD board. Failure to obtain support in the entire county, including the Sublette Center, made the effort very polarizing. The U.S. Department of Agriculture (USDA) even denied the loan application for the hospital and suggested that the solution include both groups working together.

The USDA loan is necessary to build the hospital. After discussions, the Sublette Center and RHCD agreed to merge together to create a new health care system owned, operated and governed by a Special Hospital District, and build one new campus to house a modest critical access hospital, utilizing the existing Pinedale Clinic building with an attached new long-term care facility and memory care unit. Additionally, the Sublette County Commissioners agreed to provide up to $20 million to build the long-term care facility wing, but only if the Special Hospital District passed.

 A Special Hospital District equates to a merger of two groups for better healthcare for all ages. If the RHCD  proceeded alone, the USDA loan application could likely be denied again for lack of community support. More importantly, the Sublette Center would be stuck with an aging facility and, as a nonprofit, no way to obtain its own USDA loan to build a new facility. 

The best path forward is working together!

What does the latest Eide Bailly Forecasted Financial Statement say?

We received the draft Eide Bailly statement on Oct. 15, 2020. The final version is expected to be released in November.

conceptual site plan shows the proposed project

• Forecasted Financial Statements Five Years Ending June 30, 2025: Sublette County Rural Healthcare District -Download the PDF

What kind of services can a critical access hospital provide?

A critical access hospital would be able to provide a broad range of vital healthcare services, including inpatient and outpatient care that Sublette County residents previously had to travel over 60 miles to receive.

The critical access hospital model works for Wyoming's rural communities. Congress created the critical access hospital designation through the Balanced Budget Act of 1997 to reduce the financial vulnerability of rural hospitals and improve access to healthcare by keeping essential services in rural communities. Of the 27 hospitals in Wyoming, there are 16 a total of critical access hospitals in Afton, Basin, Buffalo, Cody, Doulas, Kemmerer, Lovell, Lusk, Newcastle, Powell, Rawlins, Sundance, Thermopolis, Torrington, Wheatland and Worland.

SERVICES

The following are examples of services that a critical access hospital could provide in Sublette County.

Care of complicated, non-critical infections

• Pneumonia

• Pyelonephritis (kidney infections)

• Diverticulitis (intestinal infections)

• Cellulitis (skin infections)

• Osteomyelitis (bone infections)

Management of Acute Intractable Pain

• Kidney stones

• Acute low back pain

• Colitis

Acute Respiratory Treatment

• COPD Exacerbation

• Asthma Exacerbation

• RSV Pneumonitis

Acute Management of Congestive Heart Failure

Alcohol Detoxification

Post Trauma Observation

• Head Trauma – Concussions, brain bleeds

• Chest Trauma- pneumothorax

Facilitation of Orthopedic Surgical Services

• Hip Fractures

Stabilization /Observation of acute mental health crisis

Another added benefit would be the ability to care in-house for involuntary admissions (Title 25) that currently are required to be sent out of the county. This costs Sublette County a significant amount of money each year, that could instead be saved by providing that care at our own facility. Last year, Sublette County spent $120,000 for Title 25 transfers, surpassing its budget of $60,000.

Inpatient/Outpatient infusion therapy

• Chemotherapy for cancer or rheumatological disease

• Blood transfusions

• Outpatient IV antibiotics

• Outpatient IV infusions for osteoporosis, severe iron deficiency

Why do we need a hospital when we can rely on telemedicine?

Even with telemedicine, Sublette County residents will need access to a hospital for blood tests, diagnostic tests, blood transfusions, inpatient care and intravenous fluids. Those are the services that a critical access hospital can provide.

Combining telemedicine with a critical access hospital presents an amazing opportunity to access important care, such as medical specialists, while staying in Sublette County. Travelling to specialty care can create a burden for individuals and their families due to traveling costs, long wait times for appointments and added health care costs.

We currently use tele-stroke, tele-psychology, and tele-clinic visits.  The telemedicine technology will increase the number services provided at a Critical Access Hospital.  The combination of telemedicine and a critical access hospital will create a stronger legacy of health care in our communities.  

What is on the ballot relating to the Special Hospital District?

The Nov. 3 General Election ballot has several items relating to health care in Sublette County.

• Nonpartisan Offices - Rural Health Care District trustees - 2 open positions for four-year terms

• Nonpartisan Offices - Special Hospital District trustees - 2 open positions for four-year terms

• Nonpartisan Offices - Special Hospital District trustees - 3 open positions that are two-year terms  

• Ballot proposition - Proposed Special Hospital District - Vote for or against

Voting for the trustees for both the Rural Health Care District and Special Hospital District is necessary, even with the Special Hospital District's passage.

The Special Hospital District is not eligible for the 3 mills until the start of the fiscal year in July of 2021. Until then, the Rural Health Care District and Special Hospital District would work together to maintain the operation of the county's health care system. Both districts would be able to pursue the necessary steps to apply for the USDA loan, begin the process of constructing the critical access hospital and pursue the merger between the Rural Health Care District and the Sublette Center.  

At the end of the 2020 fiscal year in June of 2021, the Rural Health Care District would vote to disband and turn over the operation to the Special Hospital District. 

 Look at the sample ballots at http://www.pinedaleonline.com/pinedalelocal.htm#ballotsT

Why can the former ball fields property be used for the hospital?

In 1925, the U.S. federal government patented to the Town of Pinedale 80 acres, on which the former ball fields are located and where the proposed critical access hospital would be built. This land was patented to the Town of Pinedale in 1925 as a means to provide additional public lands at the disposition of an incorporated municipality to grow and develop. The use of this land for a hospital intending to serve our residents entirely conforms with the intentions of the Act of 1890 and the Patent of 1925

 Since the patent of the lands, some of the land has been conveyed away to third parties for various uses, including:

• Upper Green River Cemetery District

• Pinedale Medical Clinic

• Senior Housing

• Rendezvous Point

• Discovery Center

• Taylor Addition

• Mountain Man Museum

• Faler Addition (portion)

• SCSD#1 (portion)

• Sublette Center (portion)

• Shadow Brook Town Homes

• Ridley’s (portion)

• U.S. Forest Service Building

• Pinedale Dental Building

• Nystrom Building

At no time was the conveyance of these 1925 Patent lands contested and at no time has any of the land reverted back because it was not used as a cemetery or park.

Interested in learning more?

• Download Town of Pinedale brief on the 1925 patent

• Read about why moving the ball fields was necessary

What are the cost savings of the project?

Here are some estimated cost savings of the project:

• Building a hospital will make us more sustainable than less. A critical access hospital would generate $7 million more revenue than the existing Rural Health District clinic system. Medicaid reimburses 60% of clinics now, but a hospital would receive 100% reimbursement.

• Another added benefit would be the ability to care in-house for involuntary admissions (Title 25) that currently are required to be sent out of the county.  This costs Sublette County a significant amount of money each year, that could instead be saved by providing that care at our own facility. Last year, Sublette County spent $120,000 for Title 25 transfers, surpassing its budget of $60,000.

• On average, around $1,000 per ambulance trip is transferred to a patient’s out-of-pocket expense for patients who do not have an insurance plan that covers transports to a physician's office.  Whereas, under a critical access hospital, the patient’s out-of-pocket expense holds the possibility to lower considerably.

What is the estimated economic impact of the project?

Adding jobs, increasing services, and keeping more medical revenue here would have an overall benefit to Sublette County. The estimated economic impact is 167 total jobs and an $11.84 million in wages, salaries and benefits.

The critical access hospital would create an estimated 20 new, permanent jobs, adding over $1.8 million in wages, salaries and benefits to Sublette County.

Using just existing jobs numbers for both the Sublette County Hospital District and the Sublette Center, the economic impact of the hospital with an attached long-term care facility is 167 jobs with an average of $10.71 million in total wages, salaries and benefits.

• The Sublette County Hospital District and the Sublette Center currently employ 147 employees and pay $9 million in wages, salaries and benefits.

• According to the National Center for Rural Health Works, an additional .34 jobs are created for other businesses and industries for every job in the hospital. The secondary employment impact is 41 jobs with $1.71 million in wages, salaries and benefits.

How are we going to staff the hospital, when it seems like we are having a hard time keeping providers?

We have had many providers reach out that are interested in moving to our area, and the board has not had to pay recruitment fees for years.  We have found providers that want to stay in the county and love the Sublette County lifestyle.

Prior to these circumstances, though, we implemented an Employee Education Program to assist those interested in further training, as well as a Scholarship Program with local high schools designed to encourage education in the medical field for our graduates with incentives to bring them back after training.

What will happen to the Marbleton/Big Piney Clinic?

The Marbleton/Big Piney Clinic is a priority.  The goal is to reinstate comprehensive after hour care, and possibly expand other services as well.  We are taking steps to that end, though it is taking more time than we hoped.  The steps we have taken at present are working to employ full time providers who live in the community and working with the State Department of Engineering to ensure that we can get the ER area up to code in regards to ventilation and installation of a required firewall between the ER and the rest of the existing clinic.  Given current affairs, we are also planning to construct an area for isolation/negative pressure while working on the ventilation.

Why did we have to move the ball fields? How is moving the ball fields equate with reducing costs/being fiscally conservative?

Moving the ball fields was necessary in order to make use of the existing $10 million Pinedale clinic and EMS buildings. Using the 15,000 square feet of existing Pinedale Clinic is estimated to have saved nearly $8 million in new construction. Utilizing what we already have is being fiscally responsible.

The Town of Pinedale, Board of County Commissioners and the Sublette County Rural Health Care District were willing to cost-share the cost of replacing the ball fields.

• The total combined cost for both the new fields and the completion of Wilson St. is $4.6 million. The Town of Pinedale is paying $1,907,000, the county paid $1.35 million, the Sublette County Rural Health Care District paid $1.35 million and SCSD#1 helped with a practically free long-term lease on the land.

• The town spent $907,000 more to pay for $333,000 for Wilson Street required as a second entrance to the new ball fields and $575,000 for field improvements, which is beyond the like-for-like agreement with RHCD and the commissioners.

The Town of Pinedale had over the years spent nearly $5 million on the “old” ball fields on top of the hill. They are much more than a grassy hill as some may think; it has fences, lights, dugouts, irrigation, a building, etc. and is used by multiple hundreds of county residents young and old alike from spring to fall.

The town of Pinedale is building nice fields but there is nothing extravagant on the fields. The costs and plans have been openly studied for nearly seven months by the Pinedale Town Council, the county commissioners, the RHCD, SCSD#1, multiple engineers and the public. The overall site will be much more pleasant and have a greater capacity as a future sports complex, including trails and a new pond. This new complex will add value to our community and increase the opportunity of sports tourism and recreation.

Why do we need an additional mill levy?

With the formation of a Special Hospital District, the project will have access to one additional mill levy. The additional mill would equal roughly $2 million in tax revenue to help fund and operate the critical access hospital with an attached long-term care facility.

Sublette County receives funding for budget requests through mill levies, which are the number of dollars in taxes that a property owner must pay for every $1,000 of assessed value. An additional mill is equal to an estimated .10 cents of tax for each $1,000 assessment. 

HOMEOWNER EXAMPLES

Homeowners would pay based upon the assessed value of your home  

• $200,000 home - Proposed tax is estimated at $20 per year

• $500,000 home - Proposed tax is estimated at $50 per year

BUSINESS EXAMPLE
$2 million business on main street with $800,000 worth of equipment is assessed at $2.8 million total. The proposed tax is estimated at $280 per year.

AGRICULTURE EXAMPLE
Agricultural lands are valued based upon their capacity to produce income. Agricultural property in Wyoming is not taxed, for the most part, at fair market value. Your mill will be based on your Assessed Value, not the market value.

• 4,700 acres (mix of rangeland and irrigated land) is assessed at $575,000. The proposed tax is estimated at $57 per year.

• A $4 million ranch (including 2,000 acres, 1 home, 9 outbuildings) with $1 million worth of equipment is assessed at $5 million total. The proposed tax is estimated at $500 per year. 

The additional levy will help us compensate for significantly decreasing county valuations, as well as assisting in the absorbing of the Sublette Center, which has been heavily subsidized for years.  The goal is to eventually be financially independent of the county, and to use tax revenues only for capital improvements, not daily operations.

If approved by voters in the 2020 General Election, the Special Hospital District cannot access revenue generated by mill levies until the start of the fiscal year in July of 2021. Until then, the Special Hospital District would operate using the revenue from the two mills appropriated to the Sublette County Rural Health Care District. In June of 2021, the Sublette County Rural Health Care District would vote to disband and turn over the operation to the Special Hospital District.  At that time, the Special Hospital District would be eligible for its 3 mill appropriation.  In the meantime, both districts would be able to pursue the necessary steps to apply for the USDA loan, begin the process of constructing the Critical Access Hospital and pursue the merger between the Health Care District and the Sublette Center.