EvergreenHealth revises failed Prop. 1 measure for the Aug. 6 ballot

The public hospital failed to pass a $345 million bond in April. The tweaked proposal will make its debut on the Aug. 6 ballot as a tax rate extension, not an increase.

  • Wednesday, July 10, 2019 8:30am
  • News

After coming up 900 votes shy of the 59,000 needed to pass a $345 million, 20-year bond in the April 23 special mail-in election, EvergreenHealth (King County Public Hospital District No. 2) has announced plans to put the bond issue on the Aug. 6 primary election ballot. This time around, EvergreenHealth will be proposing an extension of the current property tax levy to improve their facilities instead of an $0.18 per $1,000 assessed value increase, as proposed in the spring.

In 2018, EvergreenHealth collected $26.2 million in annual tax levy dollars; a percentage of the current tax rate represents previously voter-approved unlimited tax general obligation (UTGO) bond payments funding special EvergreenHealth initiatives (i.e. payments on top of the already existing tax obligation for being a resident in Public Hospital District No. 2). In 2004, district voters approved a $120 million bond to be used primarily for the construction of the 10-story Silver Tower.

In 2013, EvergreenHealth refinanced a portion of the original the 2005 Silver Tower UTGO bond, reducing taxpayer obligation by $9 million. These refinanced bonds are set to expire in December 2023. According to a written response provided by EvergreenHealth spokesperson interim CEO Jeff Tomlin, “If the measure passes, the new bond will take effect in 2020. At the same time, the rate of the 2005 bond will decrease and will expire in 2023. Therefore, while the actual debt amount increases over time, the new debt levy rates are expected to decrease overtime. Approving Proposition 1 will not increase the EvergreenHealth tax rate for hospital district residents.”

The official response goes on to state, “With Proposition 1, EvergreenHealth’s average tax rate will remain flat at approximately $0.28-$0.29 per $1,000 of assessed property value through 2042.”

The proposition, part of the hospital’s 10-year Master Facilities Plan dubbed “EverHealthy,” aims to update and expand facilities to accommodate a growing population in an area prone to seismic activity. The bond in question will, if approved, primarily fund the retrofitting of the original buildings inaugurated in 1972 to meet seismic safety standards.

It will also help redesign to the Family Maternity Center and expand the Critical Care Unit — integral moves in meeting public demand, Tomlin said. He listed the following as other factors necessitating taxpayer-funded upgrades: a wave of baby boomers needing senior care, a sprawling tech-sector attracting younger, child-bearing families to the area, and a commitment to providing patients with cutting-edge care.

In addressing why Prop. 1 failed to achieve a supermajority in April, Tomlin said some residents — especially those newer to the area — expressed an unfamiliarity with public hospital districts in general, while others desired more information on the specific projects funded by the bond. Others still were reluctant to see their property taxes increase.

King County Public Hospital District No. 2 was formed in 1967 as a means of providing adequate healthcare to the Eastside — then representing a substantially smaller, rural population — where a private hospital would have otherwise been unsustainable.

David Maehren, vice chairperson for the Northshore Fire Department Board of Commissioners and a Prop. 1 opponent, said dependence on taxpayer support to fund an Eastside hospital made sense decades ago, but that EvergreenHealth should now “pay its way” for infrastructure improvements. He claimed that the existing annual levy does not provide residents with substantial benefits beyond what can readily be found at other area hospitals, both public and private. Maehren said that the EvergreenHealth Board of Commissioners is “used to, for so long, using tax dollars that they don’t even know another way, they’re not even looking for another way.”

Tomlin cited the 24/7 Nurse Navigator Hotline and partnerships with local schools to bolster STEM curricula as notable levy-funded initiatives helping distinguish EvergreenHealth from its competitors.

“We are in this affluent area, but taxpayer support allows us to do some really special things for the community. The board of commissioners takes the taxpayer levy very seriously,” Tomlin said.

Maehren, who accused EvergreenHealth of being too focused on competing regionally and not prioritizing its district taxpayers, also voiced concern about the financial breakdown of the revised Prop. 1 bond pitch.

“With bond dollars, the further out you go, the more risk, because investors don’t know what the interest rates are going to be 10 years, 15 years, 20 years down the line. Most government agencies don’t go beyond 20 years because it gets really expensive,” Maehren said.

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