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County OKs vote on Floyd County Medical Center reorganization to allow it to levy taxes

County OKs vote on Floyd County Medical Center reorganization to allow it to levy taxes
Floyd County Medical Center infographic regarding referendum to change hospital organization to allow it to levy property taxes. Graphic submitted
By Bob Steenson,

Voters will decide in November whether to modify the organization of the Floyd County Medical Center to change how its governing board is selected and to allow it to levy property taxes.

The Floyd County Board of Supervisors accepted a petition from the hospital Tuesday morning to put the question before county voters, then passed a resolution setting that vote for Nov. 5, during the general election.

Rod Nordeng, medical center administrator, presented the petition to the board.

Currently, the medical center is organized as a county memorial hospital under Chapter 37 of the Iowa Code. The members of its board of trustees are appointed by the county Board of Supervisors, and that hospital board has no power to tax.

The hospital is requesting to be organized under Chapter 347 of the Iowa Code, Nordeng said.

If approved, the trustees governing the hospital would run for office and be elected, rather than being appointed, and that board would have the power to issue a tax levy against all the taxable property in the county.

The initial tax levy is being proposed at $500,000 annually.

Nordeng has been making the case for about two years that the hospital is faced with new financial challenges, primarily because of reductions in state Medicaid reimbursement, but increasingly also because of reductions in private insurance reimbursement.

Nordeng handed out an “infographic” sheet at the supervisors meeting that shows:

• $742,370 reduction in annual Medicaid reimbursement since the state privatized this coverage for low income and other Iowans.
• $247,737 reduction in the amount Blue Cross reimburses the hospital for services under its contract with the hospital.
• $1,707,605 in charitable care required by law and in bad debt.

Nordeng said that there are 44 county hospitals in Iowa. Forty-two of those are Chapter 347 hospitals and have been levying property taxes for decades. The other two are Floyd County and Grundy County.

Last fiscal year, the Floyd County Medical Center had requested but did not receive $100,000 in support from the Floyd County supervisors. It was the first time in decades that the hospital had sought taxpayer support.

This fiscal year the hospital requested $500,000 in county support and was granted $250,000.

If the organization question passes in November, the new hospital Board of Trustees will have more control over the medical center’s finances by being able to levy property taxes to supplement operating funds.

If property taxpayers ever feel the board members are abusing that authority, they would have the same remedy available as with any other elected taxing body — at the ballot box.

Nordeng’s infographic sheet says that supporting a $500,000 annual tax collection will cost the average dwelling in Floyd County — listed as a home worth $103,043 — $33.45 annually, or “a tank of gas.”

Information previously prepared by the medical center broke that down further. For example, hospital taxes for a residence with an assessed valuation of $50,000 would be about $16; about $49 for a $150,000 home. A business with an assessed value of $500,000 would pay about $214 a year more, and agricultural property would pay about 47 cents per acre.

The hospital was required to gather at least 318 signatures on its petitions to put the measure on the ballot, based on a percentage of voters in a recent election.

Nordeng said he handed in 578 signatures and more could have been collected if they had kept going, “but we wanted to get that in in a timely manner.”

He said a community task force with 16 members is helping spread the word about the proposal and providing feedback, and he has been speaking regularly with community groups and organizations about the need for the change.

“We’ll need to travel the county,” he said.