UofL Required to Trade Sports for Indigent Care!

Well… maybe.

A few weeks ago, Louisville’s Metro Council approved with only few changes the 2012-13 Budget prepared with Mayor Fischer’s administration. The University of Louisville had protested strongly over what it called a “reduction” in the funding of the QCCT fund that goes solely to UofL for indigent care, and incidentally makes it possible for the hospital to transfer large sums to the University for other undisclosed purposes. In reality, the net amount for the University’s benefit was the same as it has been. The Mayor and Council rightly refused to play the same misleading bookkeeping game of payment and rebate. Looming over our local deliberations was a threat by some state legislators to reduce their contribution to the QCCT fund by the same amount as any reduction by local government. This despite the fact that Frankfort has been playing its own version of a shell game with UofL for just as long, and indicates that many in state government are also losing their patience with current University leadership. We are left with having to parse the meaning of the word “reduction.”

Initial reports of the Councils deliberations told of added language to the effect that if the City’s income were better than projected, additional funds might be given to the University through of the QCCT. No demands were made on the University to become more transparent and accountable in its use of the money as others, including Metro Council have requested. It seemed that once again, the University had gotten what it wanted through bully and bluster. I waited to see the final budget language, and now that it has been published, I am quite surprised. Here is the exact language added as it appears in the Public Health and Wellness portion of the approved budget.

Read and passed, June 21, 2012.
c. To the extent the University of Louisville or its designee makes payments to the Louisville Arena Authority that serve to reduce Metro Government’s obligations with respect to its annual guaranteed payments to such Authority, Louisville Metro will increase its payments by an equal amount to the quality care charity trust to benefit the University medical center and the indigent care it provides. In the event the administration brings forward an expenditure plan of fiscal year 2012-13 budget to appropriate excess revenues the mayor should consider including QCCT in that plan.

This part of the added budget language was struck:

Further, should Metro Louisville FY 2012-13 surplus exceed its planned $3.45 million addition to its rainy day fund, (as limited by ordinance number 21, series 2011) then by June 30, 2013, the Mayor of Metro Louisville is hereby authorized to pay such surplus, up to $1.4 million, directly to the Quality Care Charity Trust as an advance on Metros fiscal year 2013-14 $7 million contractual requirement.

The new language seems intentionally to echo that from Frankfort and appears to be a reaction to the fact the public has been left holding the bag for the predictable losses incurred by UofL’s yummy new basketball cathedral. If UofL (or any designated friend of UofL) comes up with money to make Metro Government more whole with respect to the Louisville Arena Authority, then Louisville Metro will make matching payments to the QCCT. Disappointingly, the very next sentence keeps the door open for the Mayor to give even more money to UofL regardless of any payments to the Arena Authority or the rainy day fund. The taxpayer pays the final bill in any event.

Although I love the gentle scolding of the budget language, it does nothing to require any of the previously demanded meaningful accountability from the University, nor does it diminish the tax burden on the public. Any money saved by decreasing city payments to the Arena goes right into the pocket of UofL!  In fact, no upper limit is mentioned: UofL can end up with even more that it asked for! A door has been opened wide for large-scale financial manipulations that could put the old match-and-rebate scam to shame. For example, some friendly athletics booster can now contribute to the upkeep of the Arena with the firm knowledge that the money will go directly to UofL, whose use of the QCCT was roundly criticized by the Office of the State Auditor. Here is a way for the UofL Foundation or other “designee” to look like a hero by compensating for the the city’s losses on its arena and at the same time returning money for the use of its own system. That would be the old shell game on steroids. It would not surprise me if this new language was actually proposed by the University!

The language that was struck sounds like that which was reported by the Courier-Journal. How and when did that happen? Where did the arena language come from or was it there all the time?  Were there additional meetings? Whose idea was it, and what was the justification?   Anyone who can help is invited to clarify events in the comments section. Can anyone convince me that the University of Louisville has not once again ridden roughshod over the rest of us? Should we assume that the University of Louisville Board of Trustees approved its administration’s current directions that involve both its sports and academic activities? Is it any of our business?

Peter Hasselbacher, MD
President, KHPI
Emeritus Professor of Medicine, UofL
July 17, 2012