Tuesday, April 9, 2019

The $2.5M "Ask" from Independent Bank to McKinney Residents

When the ask comes, McKinney’s City Council needs to vote no on a partnership with Independent Bank and their $2.5M request for the city, MEDC, and MCDC to help them build a new Medicare/Medicaid clinic building.

from Shippensburg University
Independent Bank leapfrogged over McKinney’s traditional routes of funding for community investment, like the Community Grants board, theMCDC, and the MEDC that already have specific budgets for giving. They also have transparent, easy to follow processes. Instead, Independent Bank got a straight shot to the City Council. Are other worthy charities and non-profits able or capable of that feat? Isn’t this why we are supposed to have processes for charities and non-profits with easy to follow funding routes?

A little over a year ago, Independent Bank's head of Corporate Responsibility, James Tippet, came before City Council asking for a Public Private Partnership (PPP) with us to help finance a health clinic in McKinney. There were two reasons presented by him and Mayor Fuller as to why the city would want to get involved in the health clinic business: 

1st reason- This FQHC would be built along Highway 5 to revitalize the area and bring jobs to the east side of McKinney.

2nd reason- This FQHC would serve uninsured/underinsured (the working definition of which was vague and a source of confusion) on the east side.

The February 2018 resolution of support was to show City Council’s support for the efforts of Independent Bank to build a new clinic. No money was ever promised. The resolution passed 7-0.

After a recent CCAD search, I found that the North Texas Family Health Foundation (the money-raising arm for the clinic) has recently purchased vacant land at 1620 W. Virginia Street, presumably as the home for the new clinic. That address is far from Highway 5 which was where it was supposed to be located to provide the needed revitalization, jobs, and direct access to the most needy of our city. 

At the City Council Work Session on April 2nd, two spokesmen from Independent Bank, Mr. Temple, an Executive VP, and Mr. Tippet, the Executive VP of Corporate Responsibility,  gave an update on their plans and asked for money unofficially. An official ask will happen soon at a City Council meeting. At this update, no mention of a location was made. No one mentioned Highway 5 or any revitalization. There was barely a mention of this clinic's "economic development" angle. 

The Independent Bank spokesman asked for a total of $2.5M. Of that total, $1.5M would come from the city directly.  The spokesman said they would be or were in the process of asking the MEDC for $150k to help pay for fees and $800k for horizontal building funding from the MCDC. Independent Bank has put in $2.5M and the spokesman said they are currently raising $2.5M from private donors. Residents of McKinney would be partners in the clinic for around a fourth of the total $9M cost. Even if the city, MEDC, and MCDC give the funding Independent Bank wants, the clinic will still be short $1.5M of the total $9M cost. 

Who will be serviced in this clinic on Virginia?

Mr. Temple said, “The model is not a free clinic.” Mr. Tippit clarified that this FQHC model operates on volume of Medicare/Medicaid patients.

The spokesmen for Independent Bank said they asked Collin County for $1M last year and they were turned down. They said Collin County Commissioners Court told them it is county’s mandate is to cover only the truly indigent and this clinic does not do that. The spokesmen said they would ask Collin County Commissioners Court for the $1M again soon.

James Tippet said that after its first year in operation at the Wysong Building, this clinic served 1,923 unique patients. Out of that total, 115 did not pay. The representatives said they won’t go after the patients for the cost of health services. If the patients who didn't pay for services were required to sign financing paperwork (which the clinic's website says is required), those patients may still think they owe the clinic money. There is no official indigent care program at this clinic.

This Medicare/Medicaid clinic would be a great project for Independent Bank and private donors to build--on their own. 

Avoidance of the processes already set up for such funding requests is troublesome and it will lead to many future “asks” that go directly to City Council from just about any group wanting a city partnership. The precedence will be established if City Council approves this request. After this, charity organizations will just need to talk up the economic development angle to get put on City Council’s agenda, right? How will the city budget for all the future Public Private Partnership requests?

The city and City Council both need to get back to enforcing our traditional routes of funding for community-type activities. If they do not, they need to establish and codify a process for non-profits and charities to ask the city directly for Public Private Partnerships. Transparent processes outline rules everyone must follow so every applicant gets a fair shake. 

For more information about Community Reinvestment Act requirements for large banks and how Independent Bank is choosing to meet its CRA requirements, click here.

Also, read Two Clinics: Is One of Them to Get Special Funding?
For examples of city processes in place already, look here or here.

1 comment:

  1. Wondering if there is a connection between this property discussed is located at 1620 W Virginia Street, and Richard Franklin, running for city council who works at RT investments at 1650 W. Virginia Street?