The Senate Finance Committee voted down the Office of the Governor’s request to transfer $3.3 million from an accidentally excessive utilities appropriation and re-appropriate it for renovations and capital projects, during budget hearings Tuesday. The committee also heard budget testimony regarding the Schneider Regional Medical Center and St. Thomas East End Medical Center.
Hillary Baker of the Office of Management and Budget, speaking on behalf of OMB Director Debra Gottlieb, said the funding would come from governor’s Fiscal Year 2014 line item budget for utilities, which was inadvertently budgeted at $7.5 million instead of $750,000.
A little over half a million dollars would go to boost the operating budget of the Office of the Governor and the rest – more than $2.1 million – would go for capital upgrades and repairs at Government House and the historic governor’s residence at Estate Catherineberg.
Some of the work includes pruning mahogany trees away from gutters and replacing termite damaged flooring and beams, said Nellie Varlack, director of business and administration for the Office of the Governor.
Post Auditor Jose George testified that the funding source was the result of a clerical error and said the large current year and upcoming year budget deficits may need this funding more urgently than the capital projects.
Sen. Nereida "Nellie" Rivera-O’Reilly said using a clerical error as the source of funds when there is a serious budget deficit was "an insult."
Sen. Judi Buckley agreed with Rivera-O’Reilly. "It is a bit of an insult to try to take advantage of a mistake in the utility bill to fund this," Buckley said, adding that the upcoming year’s budget would be worse than anticipated because the government will not be issuing two property tax bills this year as anticipated.
"We now have an additional $48 million deficit that we are going to have to somehow figure out how to close,” she said, adding that the work probably “should be done, but not now."
Sen. Clifford Graham, the committee chairman, said he was not convinced the work on the historic governor’s residence was a top priority. "We may have to lay off people to balance the budget and we don’t even know if the new governor will be living there," Graham said.
Varlack said that was a good point but, at the same time, the renovations still need to be done and, once complete, another agency can also be housed, saving rental expenses. "So it’s a win-win," she said.
Sen. Donald Cole said he preferred to let the next governor and Legislature handle the renovations. "The post auditor’s report is replete with reasons we cannot afford it due to the deficit we have right now," Cole said.
Voting to reject the appropriation transfer were Buckley, Graham, O’Reilly and Sen. Terrence "Positive" Nelson. Voting in favor were Sens. Myron Jackson and Donald Cole. Sen. Clarence Payne was absent.
The Finance Committee also heard testimony from Schneider Regional Medical Center Chief Executive Officer Bernard Wheatley, who presented the hospital’s FY15 General Fund budget request of $22.5 million. Of that, $13.97 is million for wages and salaries. Medicare and Social Security taxes and fringe benefits come to $5.23 million.
The hospital also projects net revenues from its own services of $77.7 million.
Total projected operating expenses for the hospital for the upcoming fiscal year are $110.3 million, a 1 percent decrease from the expenses for FY14, according to SRMC staff. That leaves a $9.9 million deficit for the upcoming year, Wheatley said.
"Furthermore, the capitol needs are approximately $9.6 million, which are currently not funded. SRMC is requesting further consideration to increase the organization’s budgetary allotments to offset its operating loss and fund depreciation,” Wheatley said.
Chief Financial Officer Fred Vitello said that, as of June 2014, Schneider Hospital has a debt of $12 to $13 million. Once the debt is annualized, the total will be $17 million.
Graham asked what SRMC is doing to reduce the debt. Wheatley said the medical center would continue to request more front-line payments and enter into contractual arrangements with patients prior to service being rendered.
Sen. Judi Buckley stated that, in comparison to the previous fiscal year, the amount of contributors who made donations has declined. She asked, “What is the total amount of donations collected for this year?”
Wheatley said there have been numerous in-kind donations to the hospital. However, he was unsure of the total monetary amount that was donated.
Graham asked, “During the 29th Legislature, funds were appropriated for SRMC to purchase energy efficient air conditioners that will help to reduce monthly utility costs. Were the units ever replaced?”
Wheatley said that two months ago a large air condition unit was installed with a crane and the emergency room and operating room services had declined during the installation process, he said
St. Thomas East End Medical Center Corporation’s executive director, Moleto Smith, and staff also testified before the Finance Committee in presenting the clinic’s $1.67 million General Fund budget request.
Chief Financial Officer Carmencita Dorsett said the full amount is needed to ensure that STEEMCC remains in compliance with the Health Initiative Center.