News Column

UMC presents $527 million budget to El Paso County Commissioners Court

August 14, 2014

By Aileen B. Flores, El Paso Times, Texas



Aug. 14--University Medical Center of El Paso on Wednesday formally presented the hospital district's new budget to County Commissioners Court.

The UMC Board of Managers on Tuesday adopted its 2015 budget of $527 million, which includes staff cuts, no tax increases, no merit-pay increases and an overall 4 percent hike over the 2014 budget. The budget also presents a $16 million net deficit with a positive cash flow from operations of $18 million. The capital budget was reduced to $5 million, about $7 million less compared to last year.

The board also adopted the effective tax rate of 22 cents per $100 property valuation, which will generate the same amount of money as last year from existing properties.

Commissioners said they were happy with the hospital's budget and were glad to see that taxes will not be increased.

Commissioner Pat Abeln said UMC has done a good job in making adjustments to avoid a tax increase.

UMC had initially proposed a 7.9 percent tax rate increase to generate about $5 million in new funds.

"I think they have done a good job in making adjustments to avoid the tax increase. I think that they are going to work very hard to keep up their service levels. I think the performance of UMC over the last decade has been exceptional.

"My concern is I want them to continue growing and continue that pattern of excellence and they convinced me today that they are going to do their very best to achieve those goals, but we are at a rough spot, there is no question," Abeln said.

Commissioner Vince Perez said he too was glad to see that the 2015 UMC budget keeps the promise that no taxes will be raise to support the children's hospital.

He said when the construction of El Paso Children's Hospital was approved by voters in 2007 was done with the understanding that the children's hospital would be able to sustain itself.

"This budget honors that promise so far," Perez said.

Commissioner Sergio Lewis said Commissioners Court will be having a follow up meeting with UMC officials in two weeks and at that point "we will be able to get a better grasp in this overall situation to make a determination whether we approve or disapprove UMC's budget."

UMC's budget was presented by CEO Jim Valenti and UMC chief financial officer Michael NuÑez.

NuÑez said that the most significant budget reductions are those related with administrative staff. He mentioned the 56 workers that were laid off about three weeks ago and the elimination of 39 unfilled positions. He said the reduction in force would save UMC about $2.1 million.

Budget reductions also include five furlough days for all UMC employees that would lead to a $1.3 million savings. Employees will be able to supplement the furlough days with personal time off.

In addition, UMC workers will not see a merit increase this upcoming year and will have to pickup part of the cost for their healthcare insurance program, NuÑez said. These two would represent $3.3 million in savings for UMC -- $2.9 million for the elimination of merit increases and $450,000 for the increase of medical benefits.

Other savings would come from reduction of travel expenses and tuition reimbursements, NuÑez said.

During Wednesday's meeting, UMC officials also highlighted the growth in patient volumes at the hospital and the primary clinics, as well as high patient satisfaction scores.

UMC is delaying the construction of three primary-care clinics in East, West and Central El Paso due to the budget problems.

UMC officials contribute their recent financial struggles to El Paso Children's Hospital inability to pay UMC millions for rent and services.

UMC and children's hospital officials are currently in legal negotiations to solve the multimillion dollar dispute. UMC claims the children's owes UMC more than $70 million. Children's hospital officials say its debt is half of what UMC is claiming.

Aileen B. Flores may be reached at 546-6362.

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(c)2014 the El Paso Times (El Paso, Texas)

Visit the El Paso Times (El Paso, Texas) at www.elpasotimes.com

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Source: El Paso Times (TX)


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