Harris County ESD 11 secures $8.5 million loan to help fund operational costs
Harris County Emergency Services District No. 11 commissioners approved a loan totaling $8.5 million during a special session on July 19.
The $8.5 million loan bears interest at 3.23% over a 15-year term. ESD 11 officials said the loan was necessary to ensure sufficient funds were available for operational costs, such as salaries, for the remainder of the year.
According to Doug Hooten, CEO of ESD 11 Mobile Healthcare, the loan was a one-time measure needed to repay approximately $5 million in expenses related to the September 2021 launch of the district’s ambulance services, ESD 11 Mobile Healthcare, which included the purchase of 40 ambulances. as well as the construction of a new 43-acre campus.
“The loan was necessary … to prepay for items that were capital in nature but had not previously been funded by previous loans, such as additional construction costs and capital emergency services equipment needed for the starting an EMS,” Hooten said in an email response. “Because all construction and capital equipment was not funded from the start of construction, the district used its existing unrestricted operating funds to prepay these expenses.”
According to Hooten, most of the district’s revenue comes from collecting fees associated with providing emergency services, although he noted that collecting some of that revenue can sometimes take up to 18 months. .
“As this is the start of a new EMS service, it takes time to start collecting revenue from providing emergency services, which is 65% of the revenue needed to run the system,” Hooten said. .
Additionally, Hooten said much of the loan was needed to offset costs associated with the approximately $20 million first phase of construction and renovation of its new campus, which included the new 911 call center. , billing center, and ESD 11 Mobile Healthcare fleet maintenance and deployment facilities. .
“With any remodeling construction project like this, you run into unforeseen problems, such as excessive water damage, termite damage, [or] insecure or out-of-code compliance [issues from] previous construction,” Hooten said.
District officials are working on the second phase of construction on campus, which will house ESD 11’s main administration building. Hooten noted that district officials are still working on the proposed budget for the 2022-23 fiscal year in order to Investigate any potential future funding issues.
ESD 11 commissioner Dorothy Dalton, who was elected to the board in May, raised concerns about the loan at the July 19 meeting.
“It needs to be explained,” Dalton said. “The public needs to know exactly what happened, and it needs to be detailed. … All this must be made public and transparent.
As previously reported by Community Impact JournalHooten said he believes ESD 11 Mobile Healthcare’s finances will eventually become self-sufficient once the district is able to fully collect revenue from its ambulance services.