John Peter Smith Hospital (JPS) and the  Tarrant County Commissioner’s Court have overlooked yet another obvious problem with the faulty financial forecasts underlying their $809 million debt proposal—hundreds of millions of dollars in ambiguous “operational improvements” from new buildings that haven’t been built.

As compared to the current trajectory, JPS’s financial forecasts assume the hospital will reduce operating costs at an additional rate of 1% per year, every year, from 2016 through 2024. This reduction is above and beyond the 4% “productivity and efficiency improvements” assumption already included in their baseline figures, which their forecasts fails to substantiate or explain.

Their consultants, Financial Resource Group (FRG), suggest this additional 1% will come from layoffs, but JPS officials say they will not reduce staff at all, let alone the 366 full-time employees FRG projected. So why do the financial forecasts with higher debt and expanded facilities include an annual 1% “improvement?”

Inflating an annual cost savings of 1% a year may not sound significant at first glance. But the cumulative effect compounded over time is staggering. The 1% in annual savings totals $80.2 million through 2019, and $181.5 million through 2022, when all construction has ended. By 2024, the cumulative amount exceeds $258.5 million in phantom cost savings.

Remember, this is over and above the ambiguous 4% savings already imbedded in the baseline.

JPS claims these assumptions are “conservative.” But it would be impossible for the hospital to lower operating costs in 2016 from new buildings and renovations that won’t be built until 2020, even though that’s precisely what they’re suggesting.

Neither JPS nor the Tarrant County Commissioner’s Court appear interested in explaining this $258.5 million discrepancy, let alone other non-financial questions.

It’s clear FRG’s projections are, at best, wildly exaggerated. They’ve created overinflated “improvements” to help JPS absorb the cost of larger facilities and massive new debt. Perhaps that was the plan all along; to provide political cover for local politicians seeking to promise “no tax increase” to constituents.

The JPS Board of Directors and Tarrant County Commissioner’s Court are either grossly incompetent or intentionally misleading local residents. They’ve already demonstrated an inability to answer questions during recent town hall meetings. Most importantly, they’re failing to uphold their fiduciary responsibility to taxpayers. To date, only Commissioner Andy Nguyen and JPS board member D.T. Nguyen have publicly challenged any aspects of the package and its underlying financial forecasts.

Residents deserve better. At the very least, they deserve the truth. But unless Tarrant County taxpayers continue to hold their officials accountable, these questions will go unanswered. They’ll also find themselves saddled with yet another sloppy debt deal on November’s ballot that hasn’t been properly vetted.

Ross Kecseg

Ross Kecseg was the president of Texas Scorecard. He passed away in 2020. A native North Texan, he was raised in Denton County. Ross studied Economics at Arizona State University with an emphasis on Public Policy and U.S. Constitutional history. Ross was an avid golfer, automotive enthusiast, and movie/music junkie. He was a loving husband and father.


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