Sabetha officials ask for portion of county tax
Officials from Sabetha Community Hospital and the City of Sabetha were on hand at the Brown County Commission meeting Monday morning, March 25, to ask that the commissioners amend a resolution calling the question for a 10-year, 1/2 percent sales tax question to support healthcare services in Brown County. Lora Key, Sabetha Community Hospital’s CEO, presented a formal request to commissioners, asking that they amend the resolution to include Sabetha’s hospital.
“As the CEO of a critical access provider in a small community, I want to see Hiawatha and Horton [hospitals] be successful,” Key said. “It is my desire and the desire of my hospital board that these hospitals be successful, but we also ask that you look at those dollars that are from Sabetha retail sales.”
Two weeks ago, the Brown County commissioners approved Resolution 19-07, calling the question to an election on May 21. At that time, the stated use for the generated funds would be to first pay industrial revenue bonds obtained through the City of Hiawatha for $2 million, then subsequently be directed to Hiawatha Community Hospital as general tax support for the hospital. If approved, the sales tax would be implemented on Oct. 1.
This decision by the county commissioners came after months of meetings of a joint advisory committee that included officials from the Hiawatha hospital, as well as Brown County and the cities of Hiawatha and Horton. The committee, which did not include any City of Sabetha or Sabetha Community Hospital representatives, was formed after the urgent situation at Hiawatha’s hospital was brought to light.
Last week, Norm Schmitt — a Sabetha City Commission member, and member of the SCH Board of Directors — made the same informal request, but at that meeting, the matter died due to the lack of a motion.
This week, Key made the request official — presenting a resolution from the SCH Board of Directors. This resolution called for the election question to specify allocation of funds from the sales tax, should it pass.
She said SCH would agree that the first two years of the sales tax funds should go to pay for a $2 million bond taken out by the City of Hiawatha to take care of Hiawatha hospital’s urgent needs. However, after the first two years, Key said SCH is asking that the portion of retail sales tax generated by retailers located in the city limits of the City of Sabetha be paid to Sabetha’s hospital as healthcare support, with the remainder of the tax still going to Hiawatha’s hospital.
Within the resolution, the SCH Board of Directors states that Brown County patients comprise 27 percent of SCH’s total patients served. Additionally, SCH has provided home health services directly to Brown County residents since April 2018 when SCH assumed that role for the western portion of Brown County. In that time, SCH has served 22 home health patients, totaling 348 visits.
In addition to the formal resolution from the SCH Board of Directors, Key presented commissioners with statistics from the Kansas Hospital Association, as well as service statistics from Nemaha County Home Health and Hospice, SCH’s home health wing.
According to the Kansas Hospital Association 2018 reports, Brown County patients comprised 16.8 percent of SCH’s outpatient visits, and 10.6 percent of inpatient visits. For Nemaha County Home Health and Hospice, in 2018 Brown County patients made up more than 25 percent of the caseload. So far in 2019, Brown County patients have made up more than 13 percent of the NCHH&H caseload.
Martin Mishler, attorney for the City of Sabetha, informed commissioners that they still have time to make adjustments to the resolution and question.
“As long as you have the first publication of your resolution 21 days prior to the election, it is still compliant,” Mishler said.
Noting that the SCH Board’s goal is not to delay the election, Mishler said, “Their goal is to see the Hiawatha and Horton hospitals succeed. But it is a matter of acknowledging that healthcare is provided to Brown County residents by SCH, and there is a significant portion of sales tax provided by Sabetha residents.”
Acknowledging the need for the special election to take place on May 21 due to Hiawatha hospital’s urgent situation, Key said she has no wish to delay the timing.
“It is not our desire to delay your resolution. We are just asking for an amendment,” Key said. “We understand the plight that is before everyone. But we do want the realization that we do serve a proportion of Brown County residents. Ten years is a long time for this sales tax to be serving only the Hiawatha hospital.”
Commissioner Dwight Kruse noted that, with the recent developments at the Horton Community Hospital, officials there need to be brought into the discussion as well. Last week, it was reported that Horton’s hospital would be implementing a three-phase re-opening in the coming months.
Commissioner Richard Lehmkuhl said that the commissioners are going to have to look at this issue “completely different” considering the news coming out of Horton.
“We are not back to square one, but we do have to go back and look at this whole thing again,” Lehmkuhl said.
Commissioner Keith Olsen asked Key if she had spoken with the Hiawatha or Horton hospitals.
Key said that, while she had not spoken with anyone at Horton, she had talked with Hiawatha Community Hospital’s interim CEO, John Broberg.
Broberg, who was present at the meeting, stated that he had no problem with collaborating with Sabetha to receive a portion of the funds.
“What is more important to me is that we cannot delay this vote,” Broberg said. “We think it is still very important to this community.”
Broberg said there are numerous variables, in addition to percentage of patients, that would go into determining how the proportions should be allocated. For example, he said, Hiawatha Community Hospital had $2.2 million in un-reimbursed Medicare, while Sabetha had substantially less.
Mishler said that when Nemaha County approved a retail sales tax for healthcare in 2015, it was split 55 percent to Nemaha Valley Community Hospital and 45 percent to Sabetha Community Hospital. This split was based on the sales tax revenue being generated by each community.
“Sabetha received a significantly smaller portion, because we have a big part of our tax base in Brown County,” Mishler said.
Commissioner Olsen asked what the timeline was on the Nemaha County sales tax.
Key said that it was a 10-year timeline, approved in 2015. The two hospitals worked on the request for more than a year prior to making the request to the county.
Commissioner Kruse said he struggles with the demographics served by the three hospitals.
“The demographics are not identical. We [Hiawatha Community Hospital] have a higher number of uninsured, under-insured patients being seen,” Kruse said. “What I am struggling with is a fair and honest way to divide up the money. We have to shoulder the burden and make sure to serve those citizens.”
Kruse said that the big issue is figuring out what is fair and equal to everyone, but getting it done quickly because there is “an urgency to have something done.”
“The time is very short,” Kruse said. “It is absolutely critical that it goes to a vote.”
Commissioner Olsen asked if the joint committee could meet again this week, this time including representation from the Sabetha and Horton hospitals. The Brown County Commission has a regular meeting scheduled for Friday, March 29, and he said he would like the committee to bring a recommendation to the commissioners at that time.