1. Halifax Health Special Taxing District Impact Study 1

2. Topics of Discussion 2008 Property Tax 2008 Property Tax Fact Fact Ad Valorem Tax Revenue Ad Valorem Tax Revenue Halifax Health Waste Halifax Health Waste Access to & Cost of Health Care Access to & Cost of Health Care Financial Review Financial Review Board of Directors Fiduciary Responsibility Board of Directors Fiduciary Responsibility Citizens Referendum Citizens Referendum 2

3. 2008 Property Tax 2008 Property Tax 3

4. 2008 Property Tax % Daytona Beach District 4 4

5. Fact 5

6. 6

7. Fact –Halifax Hospital Medical Center is a Community owned health care center, owned by the residents of the Halifax Special Taxing District. –The Halifax Special Taxing District is governed by a seven (7) member Board of Commissioners Source of data: Florida House Bill HB 1457 Source of data: Florida House Bill HB 1457 7

8. Fact –Board of Commissioners shall be a resident of the “Taxing District” –Board of Commissioners are political patronage appointees, appointed by the Governor & are accountable to “NO” one. Source of data: Florida House Bill HB 1457 Source of data: Florida House Bill HB 1457 8

9. Fact –According to The Florida Hospital Association there are 226 acute care hospitals in Florida Source of Data: Florida Hospital Association—fla.org Source of Data: Florida Hospital Association—fla.org 9

10. Fact –Of the 226 acute care Florida hospitals: 34 are Special Districts Hospitals. 34 are Special Districts Hospitals. –16 Ad Valorem Tax Authority 12 Appointed Board of Directors 12 Appointed Board of Directors 4 Elected Board of Directors 4 Elected Board of Directors –18 Revenue Sources Varied. –85% of all Florida Acute Care Hospitals are not " Special District Hospitals" they are Privately held. Source of data: MyFlorida.com Source of data: MyFlorida.com 10

11. Fact –Of the 16 acute care hospitals with Ad Valorem Source of Revenue in Florida, 3 are located in Volusia County. Halifax Hospital Medical Center Halifax Hospital Medical Center SE Volusia / Bert Fish Medical Center SE Volusia / Bert Fish Medical Center West Volusia Hospital Authority West Volusia Hospital Authority Source of data: floridaspecialtaxingdistricts.org Source of data: floridaspecialtaxingdistricts.org 11

12. Fact Florida Memorial located in Daytona Beach, is owned by Adventist Health Care, is a Not For Profit, Acute Care Hospital & receives no Ad Valorem tax revenues. Florida Memorial located in Daytona Beach, is owned by Adventist Health Care, is a Not For Profit, Acute Care Hospital & receives no Ad Valorem tax revenues. Source of Data: Hospitalcompares.hhs.gov Source of Data: Hospitalcompares.hhs.gov 12

13. Facts In 2007 Halifax records show the Emergency Department Outpatient Activity exceeded 120,000. National statistics show 87% of the patients in the Emergency room did not require Emergency room services. In 2007 Halifax records show the Emergency Department Outpatient Activity exceeded 120,000. National statistics show 87% of the patients in the Emergency room did not require Emergency room services. Source of Data: The Feasibility of a Managed Indigent Health Care Plan for Volusia County, Fl.; Prepared by: Health Management Decisions. Inc. and Wittner Companies; October 1993 & Halifax 8/05/08 Financials 13

14. Ad Valorem Tax Revenue Ad Valorem Tax Revenue 14

15. Ad Valorem Tax Revenue Halifax Medical Center approved Ad Valorem Taxing District revenues for 2008-9 is $41.6 million. Halifax reports these revenues are used to provide Indigent Care. Halifax Medical Center approved Ad Valorem Taxing District revenues for 2008-9 is $41.6 million. Halifax reports these revenues are used to provide Indigent Care. Source of data: Florida House Bill HB 1457 Source of data: Florida House Bill HB 1457 15

16. Ad Valorem Tax Revenue District Ad Valorem Tax Revenues can be used for: District Ad Valorem Tax Revenues can be used for: Debt Service Payment on Notes & Bonds Debt Service Payment on Notes & Bonds Expenses of Operation Expenses of Operation Maintenance Maintenance Construction & Repairs Construction & Repairs Source of data: Florida House Bill HB 1457 Source of data: Florida House Bill HB 1457 16

17. (Continued) Payment of indebtedness Payment of indebtedness District expenses District expenses Downtown redevelopment District fees Downtown redevelopment District fees Tax collector fees. Tax collector fees. Source of data: Florida House Bill HB 1457 Source of data: Florida House Bill HB 1457 17

18. Ad Valorem Tax Revenue Halifax Medical Center Taxing District Ad Valorem revenue is not the only source of revenue to pay for Indigent /Emergency Care. Halifax Medical Center Taxing District Ad Valorem revenue is not the only source of revenue to pay for Indigent /Emergency Care. 18

19. Ad Valorem Tax Revenue In 1986 Congress enacted the Emergency Medical Treatment & Labor Act (EMTALA) and in 2007 Florida Legislature passed Statute 395.1041 which ensures public access to emergency services & care regardless of ability to pay. In 1986 Congress enacted the Emergency Medical Treatment & Labor Act (EMTALA) and in 2007 Florida Legislature passed Statute 395.1041 which ensures public access to emergency services & care regardless of ability to pay. 19

20. Halifax Health Ad Valorem Tax Revenue 2003 $23.6 Mil. 2003 $23.6 Mil. 2004 $25.5 Mil. 2004 $25.5 Mil. 2005 $37.6 Mil. 2005 $37.6 Mil. 2006 $45.6 Mil. 2006 $45.6 Mil. 2007 $52.7 Mil. 2007 $52.7 Mil. 2008 $52.8 Mil. 2008 $52.8 Mil. 2009 $41.6 Mil. 2009 $41.6 Mil. Source of data: Halifax Health Source of data: Halifax Health 20

21. Ad Valorem Tax Revenue From 2003 to 2008: From 2003 to 2008: –Halifax Health Ad Valorem Tax Revenue increased 224% –CPI increased 14.4% (2003 to 2007) Source of data: Halifax 2006 Bonding Data & Halifax Health Source of data: Halifax 2006 Bonding Data & Halifax Health 21

22. 2003-08 Ad Valorem Tax Revenue Systemic Flawed Model 22

23. Volusia $131.00 Volusia $131.00 Lee 6.00 Lee 6.00 Pasco 11.00 Pasco 11.00 Flagler 10.00 Flagler 10.00 Brevard 10.00 Brevard 10.00 Counties of Comparable Size- 2006 Per Capita Property Tax for Indigent Care 23

24. 2008--09 Special Hospital Taxing District Gross Ad Valorem Tax per capita Appointed Boards: –Baker County $31.90 –Graceville Hospital $52.25 –Citrus County $91.31 –Halifax Hospital $184.80 –Lake County $72.79 –Lower Florida Keys 0 –Madison County 0 –North Broward $153.67 –North Sumpter –South Broward $98.18 –South Lake $79.45 –Southeast Volusia $274.35 Elected Board: –Hendry Country $151.34 –Indian River County $103.78 –North Lake County $84.23 –West Volusia $79.29 24

25. Ad Valorem Tax Revenue 2008-09 Halifax Health Ad Valorem Tax Revenue $41.6 Million. 2008-09 Halifax Health Ad Valorem Tax Revenue $41.6 Million. For 2008-9 Halifax millage is 2.25 mills; $ 184.80 per (special taxing district) capita. For 2008-9 Halifax millage is 2.25 mills; $ 184.80 per (special taxing district) capita. Source of data: December2, 2007 News Journal; Halifax 2008-09 Budget Source of data: December2, 2007 News Journal; Halifax 2008-09 Budget 25

26. Halifax Waste Halifax Waste 26

27. Halifax Waste Halifax Marketing expense are about twice what hospitals nationwide spend on average. Approx. 1.1% of Gross Revenue. Halifax Marketing expense are about twice what hospitals nationwide spend on average. Approx. 1.1% of Gross Revenue. –Halifax Spent about $1 million for TV advertisements –$275,000 in salary for a chief marketing officer, twice what similar hospitals spend $40,000 signing bonus $40,000 signing bonus $127, 000 moving expense $127, 000 moving expense $101,666 severance $101,666 severance $60,000 Country Club Membership $60,000 Country Club Membership –$45,000 Butterfly Logo Source of data: The news Journal December 2, 2007. Source of data: The news Journal December 2, 2007. 27

28. Halifax Waste $15 plus million for 220 acres of land on LPGA Blvd. (TNJ 1/04/08) $15 plus million for 220 acres of land on LPGA Blvd. (TNJ 1/04/08) Federal Medicare administrative costs are less than 2.0% of gross revenue. Federal Medicare administrative costs are less than 2.0% of gross revenue. ( Source of data: TNJ July 1, 2008) ( Source of data: TNJ July 1, 2008) In 2007 Halifax administrative cost exceeds 15% of Gross Revenue. In 2007 Halifax administrative cost exceeds 15% of Gross Revenue. (2007 Deloitte Independent Audit Report) 28

29. Halifax Waste $350,051.00 Tower Ground Breaking Ceremony. ( Halifax internal Memorandum dated: July 12, 2007) $350,051.00 Tower Ground Breaking Ceremony. ( Halifax internal Memorandum dated: July 12, 2007) –Halifax Appears to be in violation of Florida Code of Ethics. Will File a Form 50 with Commission on Ethics. Due to Halifax Medicare errors &“over- billing”; discovered as part of U.S. “RAC” Audit Program, Halifax was required to refund Medicade $3,867,455.10. Due to Halifax Medicare errors &“over- billing”; discovered as part of U.S. “RAC” Audit Program, Halifax was required to refund Medicade $3,867,455.10. (Halifax letter dated May 12 & June 13, 2008) (Halifax letter dated May 12 & June 13, 2008) 29

30. Access to & Cost of Health Care Access to & Cost of Health Care 30

31. Access to Health Care For Humana Choice PPO & HMO and Blue Cross Blue Shield Advantage Medicare Plans participants (approximately 35, 000 plan members in the Halifax Taxing District) Halifax is considered a “Out of Network” provider because Halifax & Humana & BC/BS can not agree to fee for services. For Humana Choice PPO & HMO and Blue Cross Blue Shield Advantage Medicare Plans participants (approximately 35, 000 plan members in the Halifax Taxing District) Halifax is considered a “Out of Network” provider because Halifax & Humana & BC/BS can not agree to fee for services. Source of data: Humana, BC/BS & Halifax Health Source of data: Humana, BC/BS & Halifax Health 31

32. Cost of Health Care Florida Ormond Memorial is the “In Network Provider” for these Medicare Plan Participants. Florida Ormond Memorial is the “In Network Provider” for these Medicare Plan Participants. With Insurance A “Out of Network” stay at Halifax will cost the patient $750.00 per day compared to Ormond Memorial “In Network” cost of $500.00 regardless of length of stay. With Insurance A “Out of Network” stay at Halifax will cost the patient $750.00 per day compared to Ormond Memorial “In Network” cost of $500.00 regardless of length of stay. 32

33. Cost of Health Care Medicare (HUMANA & BC/BS) Plan Participants living in the Halifax Special Taxing District & Paying Ad Valorem Property Taxes, to support the Hospital they own, can not utilize Halifax Hospital with out paying “Out of Network” charges. Medicare (HUMANA & BC/BS) Plan Participants living in the Halifax Special Taxing District & Paying Ad Valorem Property Taxes, to support the Hospital they own, can not utilize Halifax Hospital with out paying “Out of Network” charges. 33

34. Cost of Health Care Additionally cost of Hospital services ONLY (Patient W/O insurance) depend on family size, patient net worth & income level and vary significantly between Halifax & Ormond Memorial. Additionally cost of Hospital services ONLY (Patient W/O insurance) depend on family size, patient net worth & income level and vary significantly between Halifax & Ormond Memorial. Source of data: Halifax & Ormond Memorial Procedures. Source of data: Halifax & Ormond Memorial Procedures. 34

35. HALIFAX HEALTH HALIFAX HEALTH FINANCIAL REVIEW FINANCIAL REVIEW 35

36. Halifax Health 2008 Uses of Tax Dollars. 2008 Gross Ad Valorem Property Tax $52,720,269 2008 Gross Ad Valorem Property Tax $52,720,269 Less: Less: Discounts & Uncollectible Tax ($1,845,216) Discounts & Uncollectible Tax ($1,845,216) Tax Collection & Appraiser Comm. ($1,484,530) Tax Collection & Appraiser Comm. ($1,484,530) Volusia County Medicare Assessment ($2,079,000) Volusia County Medicare Assessment ($2,079,000) Redevelopment Taxes paid to Cities: ($3,333,356) Redevelopment Taxes paid to Cities: ($3,333,356) TOTAL DEDUCTIONS: ($8,742,102) TOTAL DEDUCTIONS: ($8,742,102) 2008 Net Ad Valorem Property Tax to Halifax: $43,978,166 2008 Net Ad Valorem Property Tax to Halifax: $43,978,166 Sources of Data: Halifax Health Sources of Data: Halifax Health 36

37. Halifax 2007 Waste Interest on LPGA /Williamson property: $1,000,000 Interest on LPGA /Williamson property: $1,000,000 US Government RAC Audit: 3,867,455 US Government RAC Audit: 3,867,455 TV Advertising Costs 2,000,000 TV Advertising Costs 2,000,000 Chief Marketing Officer 563,000 Chief Marketing Officer 563,000 Butterfly Logo 45,000 Butterfly Logo 45,000 Tower Project Groundbreaking 350,000 Tower Project Groundbreaking 350,000 Excess Physicians Salaries (MGMA-95%) 2,061,796 Excess Physicians Salaries (MGMA-95%) 2,061,796 Senior Executive Excess Benefit Plan 773,000 Senior Executive Excess Benefit Plan 773,000 Annual Car allowance for 19 Employees 151,200 Annual Car allowance for 19 Employees 151,200 TOTAL $10,811,451 TOTAL $10,811,451 Source of Data: Halifax Health, MGMA< TNJ Source of Data: Halifax Health, MGMA< TNJ 37

38. Halifax 2007 Profit Reconciliation Halifax Health 2006-7 Pre Tax Profit $59,228,000 Halifax Health 2006-7 Pre Tax Profit $59,228,000 Less: Less: – 2006-7 Net Ad Valorem Property Tax ($43,978,166) 2007 Pre Tax Profit W/O Ad Valorem Tax $15,249,834 2007 Pre Tax Profit W/O Ad Valorem Tax $15,249,834 Source of data: Halifax Health Fiscal 2008-09 Preliminary Operating Budget Source of data: Halifax Health Fiscal 2008-09 Preliminary Operating Budget 38

39. 2004 to 2007 Halifax Gains W/O Ad Valorem Property Tax-($)Millions Sources of data: 2008-9 Halifax preliminary budget 39

40. Halifax 2004-07 Profit Reconciliation Halifax Cumulative Excess (Deficiency) of Revenue and Gains Over Expenses and Losses including Ad Valorem Property Tax $192,180,000 Halifax Cumulative Excess (Deficiency) of Revenue and Gains Over Expenses and Losses including Ad Valorem Property Tax $192,180,000 Halifax Cumulative Net Ad Valorem Revenue (tax) $132,841,000 Halifax Cumulative Net Ad Valorem Revenue (tax) $132,841,000 Halifax Gains W/O Ad Valorem Tax Revenue $59,339,000 Halifax Gains W/O Ad Valorem Tax Revenue $59,339,000 Sources of data: Halifax 2008-09 Budget Preliminary Operating Budget Sources of data: Halifax 2008-09 Budget Preliminary Operating Budget 40

41. With Out Ad Valorem Taxes--Cumulative 4 Year Tax District Savings $161,540,000 41

42. Use of Funds !!! Reduced Property Taxes City Infrastructure After School / Summer Programs Homeless Programs Additional Police Attracting New Businesses Drug rehabilitation ECT 42

43. Halifax Board of Directors Fiduciary Responsibility 43

44. Fiduciary Responsibility The Halifax Board of Directors has a fiduciary responsibility to the citizens of the taxing district they were appointed to represent. The Halifax Board of Directors has a fiduciary responsibility to the citizens of the taxing district they were appointed to represent. “A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.” “A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.” Defination; Webster,s New Collegiate Dictionary Defination; Webster,s New Collegiate Dictionary 44

45. The Governor Appointed Halifax Health Board of Commissioners has failed the citizens they were appointed to serve, when they… The Governor Appointed Halifax Health Board of Commissioners has failed the citizens they were appointed to serve, when they… 45

46. Fiduciary Responsibility ? Consistently Approve Administrative costs in excess of 15% of gross revenue: 13% points higher than U.S. Medicare. Consistently Approve Administrative costs in excess of 15% of gross revenue: 13% points higher than U.S. Medicare. Approve Increasing Ad Valorem tax revenues by 224% over five years while CPI increased 14.4% Approve Increasing Ad Valorem tax revenues by 224% over five years while CPI increased 14.4% 46

47. Fiduciary Responsibility ? Approved $15 million purchase of land on LPGA—Approx. $1 mill. annual Interest Approved $15 million purchase of land on LPGA—Approx. $1 mill. annual Interest Approved Excessive Employment Agreement for Physicians & Executives while reducing Nurses Compensation. Approved Excessive Employment Agreement for Physicians & Executives while reducing Nurses Compensation. 2007 Approved $773,383 for 3 Senior Executive Retirement Benefit Plans for 12 Senior Executives. 2007 Approved $773,383 for 3 Senior Executive Retirement Benefit Plans for 12 Senior Executives. 47

48. Fiduciary Responsibility ? Approve Indigent care costs of $131 per capita: 13 times comparable counties. Approve Indigent care costs of $131 per capita: 13 times comparable counties. Failed to Implement 1993 Volusia County Indigent Care Study. Failed to Implement 1993 Volusia County Indigent Care Study. 48

49. Fiduciary Responsibility ? Approved construction of $200 million “Tower Project” –creating the largest ER in Florida without addressing 87% of the ER patients that could have been treated in a less costly manner Approved construction of $200 million “Tower Project” –creating the largest ER in Florida without addressing 87% of the ER patients that could have been treated in a less costly manner 49

50. Fiduciary Responsibility ? Deny 35,000 Volusia County Residents Medicare patients “in network” fees because Halifax can not agree on “fee for Service” costs with Humana & Blue Cross/Blue Shield. Deny 35,000 Volusia County Residents Medicare patients “in network” fees because Halifax can not agree on “fee for Service” costs with Humana & Blue Cross/Blue Shield. 50

51. Faduciary Responsibility For 2008-09 approved a 2.25 mil. Ad Valorem tax on all taxable property within the taxing district. For 2008-09 approved a 2.25 mil. Ad Valorem tax on all taxable property within the taxing district. $41.6 Million: $184.40 per capita $41.6 Million: $184.40 per capita 2.5 Greater than West Volusia 2.5 Greater than West Volusia Second highest in Florida Second highest in Florida 51

52. Legislative / Citizens Action ??? 52

53. Legislative & Citizens Actions Citizens/Taxpayers have no input or oversight over the Halifax Special Taxing District. –Governor Appointed Political Patronage Board of Directors –Florida Statute 189.428 Special District; Oversight, Review Process Excludes Health Special Districts. –Florida Statutes 189.4051 & 189.408 “Referenda-Special Districts” applies to Special Districts with elected Board of Directors & excludes Governor appointed Board of Directors. 53

54. Citizens Initiatives U.S Supreme & Florida Court has ruled in numerous cases that “taxation must be proportionate to representation” U.S Supreme & Florida Court has ruled in numerous cases that “taxation must be proportionate to representation” 54

55. Legislative & Citizens Actions 2009 Florida Legislature to introduce / pass legislation to make all Florida Special District Boards with taxing authority elected. Failing to make Halifax Special Taxing District Board elected pursue legal action to make taxation proportionate to representation. Referendum to reduce Halifax Special Taxing District Ad Valorem Millage Rate form 4 mills to.25 mills. 55