[StBernard] If OK'd Nov. 2, St. Bernard Parish hospital tax might be for nine years instead of 10

[Westley Annis]

If OK'd Nov. 2, St. Bernard Parish hospital tax might be for nine years
instead of 10

Published: Wednesday, October 20, 2010, 6:36 PM     
Updated: Wednesday, October 20, 2010, 6:44 PM

 Chris Kirkham, The Times-Picayune 

St. Bernard Parish voters considering a 10-year property tax proposal to pay
for the startup of a new parish hospital may end up voting for only nine
years of tax revenue.

That's because the language on the Nov. 2 ballot for the 8-mill St. Bernard
hospital tax says the tax would be collected from 2010 through 2019. But the
parish's tax rolls for 2010 have already been finalized and approved by the
Louisiana Tax Commission, meaning it will likely be too late for the parish
assessor's office to tack the additional hospital millage onto this year's
tax bills if voters approve the measure.

St. Bernard Parish Assessor Marlene Vinsanau said she was never told by
Parish Council members or hospital board members that the intent was for the
8-mill tax proposition to be applied to 2010. She also said she told the
Parish Council at a September meeting that it would not be possible for the
additional tax to be applied to the 2010 rolls because the referendum is
being held late in the year.

The Louisiana Tax Commission approved the rolls Oct. 5.

"Once my tax rolls are approved, I'm doing assessment changes for 2011
already, and I'm already in the middle of the 2011 reassessment," Vinsanau
said. "They were already informed in September that I could not do that."

If approved by voters, the 8-mill tax is expected to generate about $23
million over 10 years to pay for initial startup costs once the hospital is
built. Lags in reimbursement programs, such as private insurance, Medicare
and Medicaid, mean the hospital would naturally be operating in the red from
the start.

If the tax is approved, the parish's hospital board plans to leverage the
tax to bond out $16 million upfront for the operations. The remaining $7
million of the $23 million would pay off interest fees for the bonds.With
the likelihood of collecting only nine years of the money, there could still
be an additional financing gap needed to keep the hospital afloat once it is
built.

The issue was brought up at this week's Parish Council meeting by Councilman
Mike Ginart. The language for the Nov. 2 proposition, which asks voters
whether the hospital service district should levy an 8-mill tax "for a
period of 10 years, beginning with the year 2010 and ending with the year
2019," cannot be altered.

Councilmen George Cavignac and Wayne Landry, who are also on the parish's
hospital board, said at the meeting that they had been advised by a bonding
attorney that Vinsanau could possibly add the additional tax to the 2010
rolls after Nov. 2, based on the outcome of the referendum.

Cavignac suggested that the council approve a resolution asking Vinsanau to
add the millage if it is approved, but the rest of the council did not
support the move.

Councilman Kenny Henderson said at the meeting that he remembered Vinsanau
telling council members last month that it would not be possible to add the
tax this year.

Vinsanau said after the meeting that the question was moot since the tax
rolls have already been certified by the Tax Commission, and because there
simply wouldn't be enough time to redo everything in order to get tax bills
out to residents and businesses.

She said she had been clear about that since the September meeting when she
told the council.

"They're telling me to sit there and wait idle in my office for two months
until Nov. 2 ... for the possibility that it might pass," Vinsanau said.
"And if it does pass, I have to have my tax rolls approved by Nov. 15."

Landry said Wednesday that he still planned to discuss the issue with the
bonding attorney from the Foley & Judell law firm and get a firm answer on
whether the tax could be applied to 2010.

If it isn't possible, he said the hospital board will have to find another
way to make up for the small gap in the anticipated $16 million. But he said
he's much less worried about a small shortfall in that money than a huge
shortfall if the tax doesn't pass.

If the millage doesn't pass, he said it would raise questions about how the
hospital could be operated, and would also jeopardize $10 million in federal
new market tax credit funding that is going toward construction of the $69
million hospital and medical office building.

"Looking at the whole picture, I'm less concerned about that than I am with
the millage not being successful and losing the $10 million in construction
money for the hospital," Landry said. "At the end of the day, the most
critical thing we have to do is start it up. At the end of the day, I don't
have a problem trying to have two years to find a solution to a very small
number."

.......

Chris Kirkham can be reached at ckirkham at timespicayune.com or 504.826.3321.

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