Levy could add $12 million a year for Renton's Valley Medical

RENTON -- Property owners in parts of King County south of Interstate 90 could see the hospital tax they pay annually to Valley Medical Center jump by nearly 600 percent next year, should Proposition 1 pass in a special election later this month.

That means the owner of a home assessed at $300,000 would pay $177 a year rather than $27.

The tax increase is expected to raise an additional $12 million a year to help the state's oldest hospital district, King County Public Hospital District No. 1, better manage the hospital, especially its emergency room.

The money would beef up a $400 million income stream officials say cannot support an emergency room overwhelmed by charity cases. Doctors and nurses would be added, according to the ballot's statement. There would also be financial help for firefighters trained in first-response emergency care.

The April 26 ballot is Valley Medical's first since 1994, when an attempt to boost the tax from 9 cents per $1,000 of assessed value to 50 cents "failed miserably," recalled Gary Kohlwes, a member of the district's board of commissioners, and a former superintendent of Renton schools.

The board represents a district of about 400,000 people inside a boundary that ranges across Renton and includes parts of Kent, Covington, Tukwila, Newcastle and Bellevue's Newport Hills.

Kohlwes acknowledged that the proposed increase will be as shocking to some as it was in 1994.

"Probably, in retrospect, it would have been better to have ratcheted it up incrementally through the years," he said. "But we need it, and the vote this time will be different -- I think, I hope."

Shocking as it was to Phyllis Knaff, 77, a retired telephone employee and hospital district resident.

She has been receiving hospital literature, but a mailing received across the district last week as ballots also were being mailed out did not help voters do the math.

Informed what the increase meant, Knaff fell silent before exclaiming, "Oh! My! That's quite a bit, isn't it?" and was quick to add, "I'm not for any increase in taxes unless I get an increase in my dividends, and I don't see that coming any time soon."

Retired Union Pacific Railway employee Glenn Bowers, 80, has similar fixed-income fears and also had not done the math.

He wondered whether his retirement check would snap if asked to stretch much more.

But Bowers, who also lives in the hospital district, added, "Yes, I'll vote for it -- probably. That hospital takes care of a lot of people who can't pay, and I think they should have some help with that if they need it."

There is no organized opposition to the tax proposal.

As it has squeezed hospital revenue across the region, the charity issue rides heavy in this election.

As reported to the state Department of Health for 2003, Valley absorbed almost $4 million in charity cases, an amount that represents a loss of 1.69 percent of charges billed and not covered by Medicare or Medicaid.

Valley is just below Kirkland's Evergreen Hospital on the list of local hospitals with losses from charity cases.

Evergreen reported nearly $5 million in charity cases for an income loss of 2.3 percent.

Topping the 2003 list is the county's premier trauma center, Harborview Medical Center.

Harborview accounted for more than $55 million in charity cases for an 18.5 percent income loss that year.

Kohlwes said charity cases are on the increase because medical costs have been rising but insurance payments have not been.

"Valley Medical has the same difficulties all hospitals have right now, " he said. "Our big expense is the ER. That's why it's the levy's focus.

"As insurance companies and the government cut back on coverage, the emergency room becomes the physician people go to first, and we have to take them -- no question, we should -- but it is law, and it is costly."

On the other hand through the years, Valley Medical commissioners have not been bashful about spending issues, and because of it, their institution has come a long way since its creation in the mid-1940s as Renton Hospital.

As a publicly funded, 100-bed facility, it replaced the tiny-and-ancient Bronson Memorial shortly after World War II, thanks to federal legislation that awarded matching funds to small communities.

That civic determination to pursue a hospital of its own has rarely lagged since.

When the board aimed to expand Renton Hospital in the 1960s, it sought out internationally known architect Edward Durell Stone, who didn't come cheap. Stone's design, built south of town, became Valley General and the sprawling complex eventually dubbed Valley Medical.

It was in the early 1980s when the board took another aggressive step. In a national search for a top administrator, it found one in Bartlesville, Okla., and paid top dollar to bring Rich Roodman to Renton.

It was headline stuff then and would be later.

By 1991, Roodman's annual income had hit $232,000.

At the same time, the University of Washington Medical Center was paying its chief administrator $127,692 while the position at Harborview was worth $111,774.

Those three positions today remain in similar orbits.

Roodman's salary today has reached $502,324, Harborview chief David Jaffee is currently making $310,200, and UW Medical Center administrator Kathleen Sellick is down for $299,196

Evergreen's executive director, Steven Brown, will make $405,000 this year.

Despite the disparity, Kohlwes said Roodman's salary is "very compatible" with that of others in his peer group across the country.

"We do a comparison every two or three years, hire an outside group to look at the salaries of CEOs around the country. We know that they make good money," he said. "And whether you agree with it or not, that is the market place."

Few question the notion that Roodman's arrival brought Valley Medical into a new attention zone, a place that included big-time media marketing as well as major-league salaries.

As Jeff Mero, executive director of the Association of Washington Public Hospital Districts put it, Roodman knocked the region on its ear as the first hospital to advertise.

At a time when his hospital had too many empty beds, for example, Roodman bought space on Metro buses to promise a private room for anyone venturing into Renton for medical care.

In 1988, Roodman struck a deal with McDonald's to bring a set of golden arches -- Big Macs included -- to Valley Medical's cafeteria. It was a controversial innovation that brought headlines and lasted 11 years.

But it remains to be seen if he can sell the tax increase.

"Compared to what the other (public-hospital) districts are getting right now," said Kohlwes, "we're not asking for a lot."

A TAXING ISSUE

Under state law, public-hospital districts are not allowed to levy more than 75 cents per $1,000 of assessed value for operating expenses. Taxes assessed to pay off bond issues are extra.

In all-mail balloting due April 26, King County Public Hospital District 1 is asking voters to increase their support for Valley Medical Center by raising the hospital tax from 9 cents per $1,000 of assessed value to 59 cents per $1,000. For the owner of a $300,000 house, passage would mean an increase from $27 to $177 a year.

King County has two other public-hospital districts. Kirkland-based District 2 (Evergreen Hospital Medical Center) already levies 33 cents for operating expenses, and collects an additional 26 cents per $1,000 to pay off bonds sold for a building project -- a 59-cent total. King County Hospital District 4 (Snoqualmie) levies 49 cents per $1,000 for services, but also collects 12 cents for a bond issue -- a 61-cent total. The other public hospitals in King County, Harborview and UW Medical Center, do not have their own property tax rates.

Not-for-profits Swedish of Seattle and Overlake of Bellevue are private, fee-based organizations that don't depend on tax support except as reflected in payments from Medicare and Medicaid.

P-I reporter Gordy Holt can be reached at 425-646-7900 or gordyholt@seattlepi.com

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