'Taxpayers are getting their money back': Madison County to distribute checks from long-closed hospital

News-DemocratMay 7, 2014 

— Checks will soon be in the mail for residents who used to pay taxes to the long-closed Wood River Township Hospital.

The hospital closed in 2000, and for more than a decade the trustees had to close up accounts, pay off debts and cover the pensions of employees who worked for the hospital.

By the end of 2012, however, an estimated pension surplus remained of $4.9 million, with another $3.5 million in cash reserves.

The hospital board and state legislators decided to give the money back to the taxpayers of the hospital district. In November, the state legislature approved a bill ordering payments to current property owners scaled by the individual properties' values.

Now the $8.4 million has been deposited in a special account with the Madison County treasurer, and distribution will be set for the date of dissolution, which is May 12, according to Madison County Clerk Debbie Ming-Mendoza.

Ming-Mendoza said officials will take the $8.4 million vs. the total property value of the district, which will allow them to come up with a tax rate in reverse. Then that rate is applied to the individual property's value in 2005, which was the last year that hospital taxes were assessed.

"That's how the amount of the return is calculated," Ming-Mendoza said.

But the checks will go to the current owners as of May 12, not to the owners of the properties in 2005 or the years before. The formula was detailed in the bill that the state legislature drafted last fall for disposition of the funds, Ming-Mendoza said.

Since every property has a different assessed value, checks range from very small up to hundreds of thousands for the largest property owner, Conoco-Phillips, Ming-Mendoza said.

Slusser said they don't yet know what the average will be, but as of last year, preliminary calculations showed a house worth about $100,000 would get a refund of $400-450. "It's real money, not just $20 back," he said.

It's important to note that it is not a tax rebate, Ming-Mendoza said -- it is not based on what the property owner has paid in hospital taxes in the past, but on the value of the property in 2005. She said she's been getting calls from people insisting that they've paid much more than $400 in taxes, and also from people who have since sold their Wood River properties but paid the taxes for years.

"Those poor folks who sold their properties keep telling me, 'It doesn't seem fair, I paid the taxes, not the person who bought the house,'" Ming-Mendoza said.

But that's how the legislature set down the rules, she said. "It goes to the person who currently owns the property."

Slusser said the board also has contracted with St. Anthony's Hospital in Alton to keep the old hospital records for employees, patients and the Occupational Safety and Health Administration. Records must be kept at least 21 years, and there are still six or seven years left to maintain them, he said.

St. Anthony's Hospital will be compensated $10,000 plus legal fees for maintenance and eventual destruction of the records, Slusser said. "We considered that a very good deal," he said. "We're blessed that they decided to take it; other hospitals turned us down."

Slusser said he was pleased with the way the process turned out. While early on there were calls to give the money to local municipalities for public projects, he said the board was unanimously opposed to that and wanted to get it back to the taxpayers.

In the meantime, Ming-Mendoza's staff is working on the amounts each household is due. "It does take time to print 15,000 checks and verify that those checks are accurate," she said. "We're hoping that the check printing process and verification process will go smoothly."

The cost of the check printing and postage to Madison County will be about $7,000, Ming-Mendoza said, not including the work hours necessary. It cannot be reimbursed from the hospital fund, she said, because it was not included in the legislation.

Slusser said the legislators, township board, treasurer and clerk have all worked together "really well" to get the project done. "At least the taxpayers are getting their money back," he said.

Contact reporter Elizabeth Donald at edonald@bnd.com or 618-239-2507.

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