FROM WHERE I'M SITTING...By jeff mero, executive director

Well, it's September. This always feels like the start of the year to me--a testament, I suppose, to the nuns who faced the task of re-civilizing me after months of being outdoors with little besides cookies, water, a bike and a baseball glove to--sustain me. I think we will turn some significant corners over the next few months:

• There seems to be a pretty solid consensus that political momentum will increase the working majorities the Democrats enjoy in Olympia. It's been quite a while since an election led to either party strengthening its grip on the wheel of government. It will be interesting to see where that leads…what I have learned from my time watching is that larger majorities are much more difficult to control than smaller ones.

• The state's latest revenue forecast was released last week. Despite a bit of a slowing from the very robust reports earlier in the year, it appears that the business environment is pretty good. There is still an enormous gap between what is happening within 20 miles of the interstates (both I-5 and I-90) and what is happening away from them, but the news from the report was the best in a long time…even our notoriously conservative chief forecaster seemed upbeat!

• It is, of course, impossible to ascribe cause and effect, but it seems noteworthy that health insurance premiums are increasing at dramatically lower rates this year than for the past several year--just as the Governor, the Health Care Authority and the Legislature are about to get very serious about health care cost control. If the same thing wasn't happening at the national level, I could get suspicious! In any event, a downturn in the health insurance spiral will contribute to the business economic performance, if past experience is any indicator.

• At least five or six major state health policy studies--electronic medical records, health technology assessment, the Medicaid payment system, Certificate of Need, long term care and public health are at the top of my list--are headed into the home stretch, with recommendations due in time for legislative review and action in January. All those groups will be sending their suggestions to the Health Care Blue Ribbon Commission as well, so it seems likely that it will be a very busy session come January!

On the association front, the AWPHD Board will review (and, hopefully, adopt) a budget for 2007 during its October meeting. The discussions to date haven't called out any special projects or new initiatives, so (thanks to your support!) the budget for 2007 will be quite stable.

I look forward to seeing all of you during WSHA's Annual Meeting time. AWPHD's Annual Meeting will occur on Thursday, October 12th at 8 a.m. at the Bell Harbor International Conference Center. Travel safely, and enjoy all this beautiful time of year brings!

SNAPSHOTS

Districts may be wondering how to develop their 2007 budgets in the wake of a June King County Superior Court ruling that Initiative 747 (I-747) is unconstitutional. To give you some guidance, we talked with attorneys Brad Berg and Hugh Spitzer in the Seattle firm of Foster Pepper and reviewed Budget Suggestions for 2007, a bulletin prepared by the Municipal Research and Services Center (MRSC). [As an aside: MRSC provides support services to Washington State counties and cities. This MRSC bulletin is available on-line at http://mrsc.org/Publications/bs2007.pdf and the discussion of I-747 is found at pages 54 through 56 of the pdf file.]

Without going into the details of the Superior Court decision, which has been appealed to the Washington State Supreme Court, here's a simplified history of property taxes over the past seven years. Prior to 2000, taxing jurisdictions could increase their annual property tax levy by up to six percent without voter approval. In 2000, Tim Eyman and others introduced and obtained passage of I-722, which dropped this limit to two percent. I-722, however, was subsequently declared unconstitutional. And in 2001, voters approved I-747, another Eyman proposal that limits taxing districts to a one percent increase unless voters approve a higher percentage.

Until the State Supreme Court rules on this case--which is unlikely before the November elections--taxing districts are left in a budgeting and levy conundrum. Should they play conservative and assume a levy increase above one percent will require voter approval? Or should they throw caution to the winds and count on the upper limit of six percent before voter involvement?

Brad and Hugh think there's a less than 50-50 chance the Supreme Court will uphold the lower court's ruling. So they suggest that districts do not seriously consider increasing their property tax levies by more than one percent.

If a district opts for the six percent increase and the Supreme Court rules that the one percent limit of I-747 is constitutional, then the district would have to refund the difference and also have to bear the expense of making refunds. In addition, the district may have to pay interest on the over-collected amounts.

Brad and Hugh, as well as MRSC, recommend that a district preserve its "banked capacity"--the difference between what it could have levied prior to I-747 and the 1 percent levied under I-747. This would enable a district to reserve the higher of the levy capacities for a future year if the Supreme Court upholds the ruling that I-747 is unconstitutional and the Legislature doesn't take action to hold levy increases to a lesser amount.

Assuming that your district's tax rate is not over the maximum allowed, here's how to preserve banked capacity:

• For districts with a population of less than 10,000: (1) pass the district's property tax levy resolution; and (2) pass the resolution required by RCW 84.55.120, which sets out the district's levy increase over the prior year in dollar and percentage amounts. (This latter requirement has been in effect since 1998.) According to MRSC, the district would automatically have the difference between what is levied--and MRSC recommends a one percent increase as being the safest--and six percent.

• For districts with a population of 10,000 or more: (1) pass the district's property tax levy resolution; (2) pass the resolution required by RCW 84.55.120; and (3) pass a resolution making a finding of "future substantial need" between what is levied--again, a one percent increase is the safest--and six percent. (Prior to the passage of I-747, these districts were allowed the lesser of six percent or a percentage tied to a certain index, which averaged about two percent a year from 2002 through 2006. MRSC noted, however, that a "finding of future substantial need" enables districts to obtain six percent.)

Towards mid-October, AWPHD has several activities that should be of interest to district commissioners, CEOs/Administrators and staff. Two of these are scheduled around the annual meeting of the Washington State Hospital Association (WSHA), which will be held in Seattle on October 12th and 13th.

• On Wednesday, October 11th, Dick Goldsmith, AWPHD's director of legal services and public policy, will kick off WSHA's Trustee/Commissioner Orientation and Refresher Workshop at 9 a.m. at the Edgewater Hotel in Seattle with a presentation on the statutory roles and responsibilities of PHD commissioners. Dennis Pointer, a faculty member at the University of Washington's School of Public Health and Community Medicine, will speak in the afternoon about "Mastering the Principles of Governance." For a brochure and on-line registration go to www.wsha.org/files/80/2006-Annual-brochure.pdf. Note: If you want to attend this program and won't be at WSHA's annual meeting the next day, you can fax your registration to (206) 283-6122.

• On Thursday, October 12th, AWPHD's Annual Meeting will be held from 8 to 9:30 a.m. at the Bell Harbor International Conference Center. It's the same site as WSHA's annual meeting, which begins later that day.

• On Thursday, October 19th, AWPHD will host a telephone conference call -- The Local Government Investment Pool (LGIP): Another Investment Option -- from noon to 1:00 p.m. Among the topics to be discussed by Doug Extine, the deputy state treasurer for investments, and Robbi Stedman, the LGIP's administrator, are how the LGIP works, participation requirements, how the LGIP's investment portfolio is managed, and historical LGIP yields. After Doug and Robin's presentation there will be a question and answer session.

To participate in the conference call you'll need to take two steps:

• By October 11th tell Wendy Ray via e-mail (wendyr@awphd.org) how many district staff will be participating in the phone call. (We have materials to send to you before the call takes place.)

• On October 19th dial 1-800-747-5150 and then enter access code 2162516 to join in on the conference call.

In our continuing joint efforts with the State Auditor's Office to improve the efficiency and effectiveness of PHD audits for everyone involved, AWPHD's SAO Committee recently put together and distributed an on-line survey to district CEOs/Administrators. Districts are reminded to complete the survey by Friday, October 13th. Once the responses are compiled and analyzed, AWPHD will be reporting its findings to the SAO and AWPHD members.

At what point does a district's collection of data to assess community health care needs conflict with Washington State laws governing the conduct of election campaigns? Although there is no definitive answer at this time, here's some guidance while the Public Disclosure Commission (PDC) completes its investigation into a complaint lodged against King County PHD No. 1 (Valley Medical Center, Renton) for its activities during a recent election campaign to annex territory into the district. One allegation of the complaint was the district improperly conducted a survey in the area proposed for annexation.

RCW 70.44.060(1) gives districts the power "To make a survey of existing hospital and other health care facilities within and without such district." And RCW 70.44.090(1) (b) requires the district's superintendent "To keep the [district's] commission fully advised as to the financial condition and needs of the district."

Although RCW 42.17.130 generally prohibits the use of the facilities of a public office or agency in opposing or promoting ballot propositions, this prohibition does not apply to "[a]ctivities which are part of the normal and regular conduct of the office or agency." The PDC's interpretation of RCW 42.17.130 is found in Guidelines for Local Government Agencies in Election Campaigns--and the PDC readily admits that "As in any matter where intent is to be considered, hard and fast rules, which will be applicable to all situations, are difficult to establish."

Survey and research activities allowed by the Guidelines are:

• "surveys and/or other community research, including demographic questions, to determine the community's priorities, public perception of performance, and/or to inform the community about agency programs and policies."
• "community research (including but not limited to the use of questionnaires, surveys, workshops, focus groups, and forums) to determine the community's priorities for both programs and/or facilities and their associated total costs and projected dollars per thousand assessment."

Activities prohibited by the Guidelines are:

• Conducting surveys to determine what level of taxation the public would support.
• Conducting surveys designed to shore up support or opposition for a ballot measure.
• Using survey results to support or oppose a ballot measure.
• Conducting election-related surveys that target registered voters or other specific subgroups of the district.

Among the general considerations the PDC takes into account when approving or disapproving survey and research activities are:

• Whether these activities are "consistent with normal and regular activities of the agency."
• Whether the elected legislative body has passed a resolution authorizing a measure to be placed on the ballot. Although surveys and research can be conducted after a resolution has been approved, the PDC may scrutinize those activities more closely. (Our comment--the more time that elapses between survey or research activities and a board resolution is likely to mitigate an argument that these activities were tied to an election.)

Recently, Lori Anderson, the PDC's communications and training officer, discussed some of these topics with us. She expounded upon the Guidelines by noting that local governments shouldn't be conducting surveys to determine what tax rate voters will approve. She also emphasized that local governments shouldn't be targeting voters to determine what measures should be placed on the ballot. She did remark, however, that surveys could ask respondents to prioritize services or give their views on services that should be cut.

Should you have questions about what your district can and can't do in election campaigns, we suggest you begin by reviewing the Guidelines which can be found on-line at www.pdc.wa.gov. If the Guidelines aren't helpful, then contact Lori at landerson@pdc.wa.gov or (360) 664-2737.

Districts considering remodeling, renovating or demolishing buildings constructed in 1956 or earlier might be running into federal, state or local historic preservation requirements. The May edition of In Focus talked about the need for districts to be sensitive to archeological concerns resulting from "ground-disturbing" construction projects. In this issue we'll address above-ground construction activities.

According to Russ Holter, a project compliance reviewer with the State Department of Archeology and Historic Preservation (DAHP), federal or state historic preservation requirements would be triggered when the following conditions are met: (1) the building undergoing remodeling, renovation or demolition is at least 50 years old; (2) federal or state funds are paying--wholly or in part--for the construction or demolition; and (3) the building is listed, eligible, or could be eligible for inclusion on the National Register of Historic Places.

Assuming that these three criteria are met and federal funding is involved, the project would be subject to a federal Section 106 review; the use of state funds would necessitate a review mandated by Governor's Executive Order 05-05. The reviews are similar and DAHP does both. So if the project is paid for with federal and state funds, only one review is necessary.

But don't panic. Russ said that a project is not considered to be funded by federal or state monies if hospital revenues, local property tax revenues and/or private funds are paying for the construction or demolition. (Hospital revenues derived from Medicare and Medicaid payments for the delivery of health care services won't trigger a federal review--these monies aren't a direct source of funding for the project.)

Russ also noted that districts can ask for an exemption from state and federal review when the project has no direct or indirect effect on cultural resources found in the built environment (historic structure) or the natural environment (archeological artifacts).

To generalize these rules: You can't take federal or state monies to alter or destroy an historic property. But if you do use these monies and the building doesn't meet historic standards, you can alter or destroy it once the historic preservation review process is completed.

In addition to conducting federal and state historic preservation reviews, DAHP also makes recommendations to local governments on ways they can preserve the historic integrity of their buildings. To find out more about the federal and state historic preservation review processes and other DAHP historic preservation activities, contact Russ at russell.holter@dahp.wa.gov or (360) 586-3533.

You also should be aware that your district still may face historic preservation requirements. Cities and towns--through Landmarks Preservation Boards--have greater authority and apply more stringent standards than the federal and state governments in determining whether or not a building is historic. But at least you'll encounter these standards "up front" because they'll be integrated into your local construction permitting process.

PEOPLE AND PLACES

Brenda Schneider has returned as the CFO of Klickitat Valley PHD No. 2 (Skyline Hospital, White Salmon).

Grant County PHD No. 2's new controller is Ken Keihn. Prior to coming to Quincy Valley Medical Center, he worked in the banking industry for 15 years as a controller.

The September 19th elections brought both good and bad news to several PHDs. Voters passed a six-year emergency medical services levy for Whidbey Island PHD (Whidbey General Hospital, Coupeville) by a 44 point margin: 72 percent "yeas" vs. 28 percent "nays." This levy rate will increase from 37 cents to 50 cents/$1,000 of assessed value. At the time In Focus "went to press," the $13.5 bond levy proposed by Whitman County PHD No.3 (Whitman Hospital and Medical Center, Colfax) appears to have won voter approval. Unfortunately, Garfield County PHD's $3.5 million bond levy for remodeling Garfield Memorial Hospital in Pomeroy failed. Although over 56 percent of the voters approved this measure, it fell short of the necessary 60 percent supermajority by about 28 votes. However, the district's commissioners immediately voted to bring the bond proposal to the voters once again at the November 7th general election.

Skagit County PHD No. 1 (Skagit Valley Hospital, Mount Vernon) reports that its 220,000 square foot hospital expansion project has passed the halfway point and it anticipates occupancy by August 2007. And with equipment already being installed in its new Regional Cancer Care Center building, the district expects this facility to open late this year. (As a sidelight, the Skagit Valley Hospital Foundation's $4 million capital campaign for the Regional Cancer Care Center has exceeded the $2 million mark.)

Klickitat County PHD No. 1 (Klickitat Valley Health Services, Goldendale) has a new name and logo: Klickitat Valley Health and "Caring for the community."

UPCOMING EVENTS

Patient Safety Committee
October 3 - 5:00 p.m. • Washington Athletic Club, Seattle
Contact: Angela Segerra (206) 216-2539

Medicaid Advisory Committee
October 10 - 11:00 a.m. • WSHA Offices
Contact: Melissa Waddell (206) 216-2510

Trustee/Commissioner Orientation
October 11 - 9:00 a.m. • Edgewater Hotel, Seattle
Contact: Angela Segerra (206) 216-2539

Rural Hospital Committee Meeting
October 11 - Noon • WSHA Offices
Contact: Melissa Waddell (206) 216-2510

RHQN Board Meeting
October 11 - 3:45 p.m. • RHQN Offices, Seattle
Contact: Brad Vollegraaf (206) 216-2550

PHD & WAH Workers' Compensation Board Meeting
October 11 - 5:30 p.m.• Edgewater Hotel, Seattle
Contact: Anita Badri (206) 216-2553

AWPHD Board Meeting
October 11 - 6:30 p.m. • Fish Club, Seattle
Contact: Beionka Moore (206) 216-2530

WSHA Annual Meeting
October 12-13 • Bell Harbor International Conference Center, Seattle
Contact: Toni Fox-Corwin (206) 216-2518

AWPHD Membership Meeting
October 12 - 8:00 a.m. • Bell Harbor International Conference Ctr., Seattle
Contact: Beionka Moore (206) 216-2530

WSHA Board Meeting
October 12 - 9:30 a.m. • Bell Harbor International Conference Ctr., Seattle
Contact: Lisa Rusk (206) 577-1852

AWPHD Conference Call - The Local Government Investment Pool (LGIP): Another Investment Option
October 19 - Noon • Conference Call
Contact: Wendy Ray (206) 216-2516

WSHA Medicaid Hospital Advisory Committee
October 24 - 1:00 p.m. • WSHA Offices
Contact: Melissa Waddell (206) 216-2510

Safe Table Eliminating Nosomial Infections
October 25 - 9:00 a.m. • DoubleTree Hotel, SeaTac
Contact: Angela Segerra (206) 216-2539

RHQN Board Meeting
November 8 - 10:00 a.m. • Conference Call
Contact: Brad Vollegraaf (206) 216-2550

WSHA Executive Committee
November 17 - 10:00 a.m. • WSHA Offices
Contact: Lisa Rusk (206) 577-1852

WHF Board Meeting
November 28 - Noon. • WHF Offices
Contact: Heather Pitre (206) 577-1848

WSHA Public Policy Advisory Committee
November 29 - 10:00 a.m. • WSHA Offices
Contact: Melissa Waddell (206) 216-2510

The deadline for the next In Focus is Friday, October 20th. Send articles or information to Dick Goldsmith (richardg@awphd.org), Fax: (206) 577-1897, 300 Elliott Avenue West, Suite 300, Seattle, WA 98119-4118.

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