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Hospital board tables TIRZ decision

December 5, 2018

The Ector County Hospital District board of directors tabled a decision Tuesday on whether or not to partake in the City of Odessa’s Tax Increment Reinvestment Zone.

City Manager Michael Marrero and Development Services Manager Vanessa Shrauner presented information to the board during their regular meeting. Odessa City Council has already approved an ordinance to create the TIRZ, which will run from Second Street to Eighth Street and Adams Avenue to Bernice Avenue, which includes Medical Center Health System facilities.

Within those boundaries, property tax revenues would be frozen at a base level for a 20-year period and as property tax values rise as the area is developed, revenues collected above that level would be used for further projects during the course of the 20-year period.

Shrauner explained the hospital district could choose which tax percentage to use, whether it be 100 percent like the city will be doing, 75 percent, 50 percent or 25 percent. The base level would include what the hospital district currently receives from property tax revenues today and over time, as property values increase, she explained the increase is the increment that would be used for projects.

If the hospital district joined at 100 percent, Shrauner said they could collect about $2.2 million over the 20-year period from the hospital district. The city is estimating to collect about $9 million.

Money from the TIRZ can only be used for public improvement, she added.

MCHS President and CEO Rick Napper said right now, most development in the Odessa-Midland area is happening in east Odessa, near Faudree Road.

“So for us as a hospital, what I looked at from a vision standpoint and where we’re going, it is in our best interest for the downtown area to be revitalized,” Napper said. “I could actually see in a 10- to 12-year period, if we’re not proactive in how we support the downtown, this facility could be less and less in the center of the healthcare district.”

Napper added that the board may have to look at relocating the facility where the population mass is at sometime in the future if the downtown area is not revitalized.

“The contribution we would be looking at compared to the benefit we would receive - is it a bet? Yes. I mean you could revitalize the downtown and nobody could continue to stay there, but I’ve watched town, after town, after town around the country that has revitalized their downtown and they get that population back,” he said.

Napper added he thinks it is in their best service interest to try to participate in someway in the TIRZ.

He asked the board choose to join at either 100 percent or 75 percent, with a strong recommendation of 75 percent. The hospital could also change their percentage after five years or seven and a half years, Shrauner said, adding it could be changed to zero percent if they wanted to opt out.

District 1 board member Bryn Dodd made the motion to table the item after some discussion about the full board not being present, a potential conflict of interest that could prohibit another board member from voting on the item, and due to the long-term nature of the TIRZ.

District 3’s Richard Herrera was absent from the meeting Tuesday. Board President Mary Thompson said Herrera was attending his daughter’s basketball game in Abilene and it could be an important game for the family if she makes the 1,000th shot of her high school career. Thompson said Herrera’s daughter would be the first female at Odessa High School to accomplish that if she hits the goal.

“That’s very important,” Thompson said. “That’s something that will not ever be repeated again. I think she’s only 19 points away from it."

The potential conflict of interest was noted after Dodd questioned the boundaries of the zone, asking if District 7 board member Ben Quiroz owned property within the zone, to which he said he did. There was some confusion as to whether or not Quiroz could vote on the item and at one point he said he would recuse himself.

Board President Mary Thompson and MCH’s current legal counsel discussed the issue, both saying Quiroz could vote on the item, as long as he made a declaration about having a financial interest in the zone, as long as it does not affect his vote.

Dodd was also wary about voting on the item the same night they received information on it due to the long-lasting effect it could have on the hospital district.

“This is a big decision and it affects 20 years down the line,” Dodd said. “It makes it very hard because we don’t have a lot of time to really consider the ramifications of this and the pros and cons and Richard is not here."

Dodd added she personally wants to do some more research and talk to the community about it and make sure it is something that is in the best interest of the hospital district before making a decision and she hopes other board members do the same.

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