The tale of two projects, a new school and hospital

Passing a bond issue to build a new high school in Brady is not something to be taken lightly. Passing that bond while there are a host of other economic opportunities on the playing field at the same time brings up questions about funding, and more specifically, taxes. The trustees of the Brady Independent School District have called for a May 12 election to decide whether ‘John Q. Taxpayer’ should commit to pay for a $14.5 million bond. If passed, the bond will provide for a new high school instructional facility that will be located adjacent to the current middle school which is the next phase of the master plan for the school district. At the same time, the Heart of Texas Memorial Hospital, another taxing entity in the county, is considering action that has many in the community pondering the same question’what will it do to our taxes’ If passed, the school bond will build a new facility which will include classrooms, science labs, a library, a separate student dining area, office and administration, a band practice facility that will actually be added on to the current band hall at the middle school, an athletic practice field, a gymnasium and dressing areas and also a weight room that will be part of a separate detached vocational building. The bond election is the first real opportunity Brady citizens will have to address an aging school campus since a bond election in 1985 failed to get approval from voters. This bond election will build a new facility that will replace the current high school which was built in 1929. This opportunity comes from a state-mandated reduction in the maintenance and operations tax rate charged by the school. This reduction from $1.33 to $1.00 is being implemented by the state with the idea that the state should be picking up more of the annual operating costs of public school systems. How does that affect Brady’ The tax rate for the 2007 fiscal year (ones that were due Jan. 31) were based upon the $1.33 M&O tax rate plus 0.04 local option. Add that to the Interest and Sinking tax rate of 0.157 (the monies a district pays for bonded indebtedness) and the total tax rate was $1.527. The bond will use those cost savings to build the new high school. If the bond passes, the realized tax rate will actually decrease only slightly from what was paid this year. If voters do not pass the bond, the 1929 structure will continue to serve as the high school and the tax rate will decrease. The graphic with the tax rate impact shows the difference in savings on an annual basis both with and without the bond. How does the hospital play into this equation’ The discussions of renovating the hospital began when estimates for repairs on the heating and air conditioning system came back at a value between two and three million dollars’simply to repair the aging system. An opportunity presented itself in another avenue that stemmed from discussions within the community to bring an assisted living facility to McCulloch County. In working with Cen-Tex Certified Development Corp., in Austin in an option to renovate the hospital into an assisted living facility and take advantage of a long-term, low-interest note was presented. That opportunity is also supported with the fact that the hospital currently has the ability to receive cost-based reimbursement of 60 cents of every dollar required to build a new patient care addition to the current hospital. The board of trustees at the local hospital has formed a finance committee to see how all of these factors can be put into one successful project. Using numbers submitted by the hospital’s accountants, the cost-based reimbursement provides an opportunity that requires the hospital board to come up with only 40 percent of the funds necessary to build the new hospital facility. Using the numbers provided by the accountant and projecting future budget numbers, the hospital predicts that they can financially afford the amount using revenue generated through daily operations. What does this mean for Brady’ What this means is that there is no projected increase in any tax rate for the hospital district and that all of the modifications and new construction can be paid for using funds that are available through regular operations. This is only possible if the hospital takes advantage of the cost-based reimbursement which is only available because the local hospital is designated as a Critical Access Hospital. According to Tim Jones, administrator of the hospital, the Critical Access designation will sunset and will eventually cease to exist, but when that will actually occur has not yet been determined. When it no longer exists, the cost-based reimbursement will also disappear. What this also means is that a new hospital with a new business (assisted living) run by the hospital foundation, will have a new revenue stream that will assist in the progressive development of medical care in McCulloch County. What is the bottom line’ The taxpayers of Brady are faced with the real opportunity to support two separate, but related issues. Both are vital parts of this community. The possibility of the new high school will never again be this perfectly timed to where the issue causes the least amount of disruption in taxes that are actually paid. The bond will address issues of construction costs that will never be lower than they are right now. If the bond fails, the reality is that the high school will be faced in the near future with upgrades and repairs that will cost several million dollars. The hospital is also a vital part of the community. The health of the community is directly correlated with the health of its health care field. New hospitals could mean new doctors, new services and new standards of care. Both boards of the hospital and of the school district are open and willing to discuss the facts associated with these issues. Citizens with questions or concerns are encouraged to contact them at their respective offices. Tim Jones can be reached at the hospital at 597-2901 and Brady Supt. Steve McCarn can be reached at 597-2301.

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