Commission approves tax relief for hospital

Thursday, December 11, 2008
By John I. Carney

Bedford County Board of Commissioners voted Tuesday night to create a Health Facilities Board, made up of the same members as the local Industrial Development Board, so that Heritage Medical Center can be taken off the county's property tax rolls.

Commissioners, County Mayor Eugene Ray and County Attorney John T. Bobo said that an in-lieu-of-tax agreement to make the hospital exempt from property taxes was part of the original contract when the county sold Bedford County Medical Center to Community Health Systems of Brentwood. CHS built a new facility for the hospital in Airport Industrial Park and renamed it Heritage Medical Center. The county is required to grant the tax relief as a condition of the sale contract, said commissioners, or else it must pay a $175,000 penalty to CHS.

County officials had originally assumed that the Industrial Development Board could arrange such an in-lieu-of-tax agreement, as it does for new or expanded industries. But state law requires that such agreements for hospitals be created through a Health, Educational and Housing Facility Board.

Commissioners created the board Tuesday night, but appointed the same members to it who already serve on the industrial board.

Members of the board would be Ray, John T. Pope, David Crowell, Larry Wells, Ron Reed, Wendell Agnew, James Winnette and Anne Blanton.

The property on which Heritage Medical Center and Heritage Medical Plaza are located is appraised at $22,047,800, according to Assessor of Property Ronda Clanton. Heritage Medical Plaza is not part of the in-lieu-of-tax agreement, she told the Times-Gazette, and so the property will need to be subdivided at some point. The parcel containing Heritage Medical Plaza will remain on the tax rolls, while the parcel containing the hospital will be taken off.

The full property, including Heritage Medical Plaza, has an assessed value of $8,819,120, which at current tax rates would give it an annual tax bill of $324,544.

While commissioners were more or less agreed on the need for the in-lieu-of-tax arrangement, some objected to the fact that it had not gone through the commission's normal committee process. Commissioner P.T. "Biff" Farrar said the commission's rules require issues to be placed on the agenda by the rules committee.

Ray, however, said he placed the item on the agenda himself and that it's not necessary for the rules committee to place every item on the agenda. He said the county was under time constraints to meet its obligation to Community Health Systems.

Commissioner J.D. "Bo" Wilson said the contract calls for tax abatement to be in place by this month.

The motion to create the Health Facility Board passed 14-4. In favor were Wilson, Phillip Vincent, Bobby Vannatta, Tony Smith, Jimmy Patterson, Janice Brothers, Jimmy Woodson, Linda Yockey, Joe Tillett, Jeff Yoes, Tony Barrett, Joyce Tune, John Brown and Ed Castleman.

Opposed were Farrar, Billy King, Bobby Fox and Mark Thomas.

Ray indirectly scolded those who voted against the motion, reminding them that if their side had prevailed, the county would have been liable for the $175,000 penalty.

A second motion, to appoint the slate of members to the board, passed 15-2-1. Fox and Farrar were opposed with King abstaining.

Comments

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Kudos to Fox and Farrar for standing their ground! Rules are in place for reasons. If every item didn't have to be on an agenda...what the point of having one? Ray only further proves he's a pawn in a bigger chess game. If it was so critical, why wasn't it done sooner? Sounds like he's not keeping up with what he's supposed to be doing.

So...how much of the 324K is the county getting?

-- Posted by Jacks4me on Thu, Dec 11, 2008, at 9:48 AM

First,let me see if my math is correct? The article states the tax revenue from the hospital would be $324,544 while the penalty would be $175,000. I don't know about you but it looks like the county would have been financially better to pay the penalty. We would have had $149,544 in tax revenue due to the county from the hospital.

Second, "Ray indirectly scolded those who voted against the motion, reminding them that if their side had prevailed, the county would have been liable for the $175,000 penalty." I would encourage TAXPAYERS and VOTERS of Bedford County to remember this statement IF Ray should attempt to run again for county executive.

The only way to improve our county is to purge the old leadership and get new people in office. If your commissioner is voting with the majority instead of standing up for what is right, replace him/her.

-- Posted by what??? on Thu, Dec 11, 2008, at 11:27 AM

If we are giving them a tax break, then why were they so worried about not making a profit and cutting OB services?

-- Posted by stardust on Thu, Dec 11, 2008, at 12:53 PM

Small minds trying to accomplish large tasks.

-- Posted by tatersue on Thu, Dec 11, 2008, at 2:41 PM