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EVSC School Board Hears Proposal to Establish Employee Health Clinics

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EVSC

Two employee health clinics may soon be established following a proposal presented to the Evansville Vanderburgh School Corporation Board of School Trustees tonight.

The clinics, which will be free to be used by eligible employees and their covered family members, will be a cost savings for those employees and ultimately the EVSC, as well as providing the opportunity to improve the quality of employees’ overall health and well-being.  This is one part of an ongoing effort by the EVSC. Past actions have included wellness consultants and revised insurance plans which slowed the upward trajectory of the cost of insurance that is occurring in the EVSC, as well as across the United States.  An added benefit of cost control will be the ability to reallocate compensation from health insurance to wages, while still providing affordable options for high quality healthcare.

For example, a 1% increase in wages for all EVSC employees would total about $1.5 million.  The increase in insurance costs for this school year totaled $3.5 million. If the EVSC had not seen that spike, that funding could have been used for a wage increase.

In 2008, the EVSC’s medical plan total cost was $30 million. Since that time, EVSC has undertaken several cost-savings measures including changing healthcare insurance plan designs, negotiating new cost-containment increases and incorporating wellness initiatives to help employees be as healthy as they can. In 2012, the EVSC spent $26.5 million on healthcare insurance.  “Naturally, despite all the changes we have already made, if we don’t change our framework – it would be difficult to imagine a time when our employees could receive increases in their wages. Not only is that model not sustainable, but it is not good for our employees,” said Superintendent David Smith.

“I applaud the Board’s vision and pro-active stance for providing health care coverage for our employees,” Smith said when addressing the board during the meeting tonight.   “Because of this paradigm shift, I firmly believe you are positioning our corporation to provide not only better access to health care, but we are also establishing a protocol that will control and contain the cost of this very expensive benefit afforded to our employees.”

Because of the continuous climb of healthcare costs across the nation, the EVSC has continued to look for additional ways in which to save money for the corporation and its employees. The healthcare clinics are part of an overall strategy to help in this endeavor.  Through Old National Insurance, which provides comprehensive consulting services to EVSC for life, long term disability, dental, vision and medical plan benefits, requests for proposals were solicited and the committee of EVSC employees investigating options is recommending Tri-State Community Clinics as the proposed provider for the two health clinics.

EVSC’s average health plan cost per employee has grown at a rate much less than the rest of the state, through the active work of the corporation and Old National Insurance.

Supt. Smith said that EVSC employees currently have access to one health insurance plan design.  “One of the benefits of a health clinic is that it incentivizes employees to be better healthcare consumers.  Studies have shown that when employees have a choice in healthcare designs in conjunction with a healthcare clinic – they choose the design that best fits their family needs, which may be at a lesser cost to them and to their employer,” he added.

Services to be provided for employees covered by the EVSC health plan include those that are normally provided in a primary care setting and the healthcare providers will have the ability to retrieve electronic medical records for all patients. All primary care services, laboratory services, as well as basic maintenance and antibiotic prescriptions will be provided at no cost to the covered employee or covered family member.  The clinic will also have a wellness component through Deaconess LifeQuest to help employees make healthy lifestyle choices. The proposal calls for a 24-hour call-in line for any health questions and wellness visits by nurses throughout the EVSC, as well.

The contract is still undergoing some revision and locations for the clinics have not yet been selected, although it is known that the clinics will not be located in any EVSC schools.

 

A Tale of Two Cities: Winnecke vows to “fight like the dickens”

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Brad Linzy

By: Brad Linzy

In a recent statement to an Indianapolis radio show, Mayor Lloyd Winnecke said his Administration would “fight like the dickens” to bring a proposed 4-year IU Medical School to downtown Evansville. In his statement, Winnecke suggested he would fight both developers without and developers within the City of Evansville who want the med school built anywhere but downtown. “We are in the early stages of putting together what we think will be a dynamite plan for downtown,” Winnecke said, “and we know that we will be competing with developers who will want it in another county. We know we will compete against developers who will want it in other parts of the city, but we’re gonna fight like the dickens to get it right downtown.” The Mayor’s remarks follow a trend of politicians supporting downtown growth in Evansville by pumping millions into downtown projects. The Ford Center, the Loft developments, Front Door Pride, and now the new convention hotel are just a few examples of this trend. According to statements released by several City Council members, a majority of them also support a downtown IU development, although it is unclear how many would support a development in another part of the city.

John Friend, a Councilman from Ward 5, the most remote Ward in relation to downtown, has publicly stated support for a downtown development, but has also expressed reservations, “I think we should keep our options open as much as possible. We don’t know what [IU] are looking for exactly. We do know they’ll probably want access to teaching beds.”

Dan McGinn, the Councilman from Ward 1, also represents a remote ward with relation to downtown. He could not be reached for comment.

Ward 3 is the home to three of the proposed sites for the IU medical school (Roberts Stadium, Evansville State Hospital, and Old North High School). Stephanie Brinkerhoff-Riley, the Councilwoman from Ward 3 is adamant about finding out more about what IU wants. “We really need feedback from IU, because we haven’t asked. Warrick County has an active committee and they’re getting information somehow. We’re behind,” said Brinkerhoff-Riley.

She also thought the idea of pitching the Roberts Stadium site had merit and could reinvigorate the Boeke area. “Roberts would be a great site,” she said. “It’s an idea that eliminates a lot of problems. It’s already razed for development. It doesn’t put it on the tax rolls, but the dog park wouldn’t have done that anyway. At the Roberts location it bridges east and west. Boeke could be a Broadripple type development in the future with the right planning. East side has stretched out so much Roberts Stadium might be a perfect bridge.”

IS IT TRUE October 22, 2013

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Mole #3 Nostradamus of Local Politics
Mole #3 Nostradamus of Local Politics

IS IT TRUE October 22, 2013

IS IT TRUE it was reported over 4 years ago that the medians on Burkhardt Road were catching on fire from slovenly drivers who were throwing their cigarette butts out of car windows into the dry mulch?…at that time the area was under the jurisdiction of Vanderburgh County and was not the responsibility of the City of Evansville?…with the annexation of that area by the City of Evansville problems like this became the responsibility of the City?…business owners on Burkhardt have recently advised the City County Observer that this problem has not been fixed in the three years that the City has been in control?…these business owners have also complained about the fact that street lights are not abundant enough to keep the area from looking to dark to be safe?…one particular business owner was so aggravated that he made the following statement:

“It does not take a rocket scientist to figure out that replacing mulch with @*! #*@% rocks will solve this problem. Is our government aware that @*! #*@% rocks do not burn and are very cheap. I guess if we were downtown they would give us all of the @*! #*@% rocks we can stand.”

IS IT TRUE the sentiment among people and business owners outside of downtown Evansville is that the City of Evansville under the Weinzapfel and Winnecke Administrations has become the Mayors of the downtown with limited interest in anything that is not downtown?…this attitude has been verified first by the construction of the Ford Center which has yet to attract an entertainer that has not played at Roberts Stadium, second by the willingness of the Winnecke Administration to fork over $37.5 Million for a hotel downtown that competes with other businesses in and out of downtown, and most recently by the outward bias that downtown Evansville will be the only public response to the RFP for the IU Medical School campus?…there is no reason whatsoever that justifies other locations and private efforts to attract the IU Medical School going without the same support from the City that any downtown site will be given?

IS IT TRUE that last weekend saw another South Central Los Angeles style drive-by shooting in good ole Evansville?…this time the location was a residence near the corner of Covert and Kentucky Avenue that just a short 30 years ago was a premium location?…that it has been reported that a full 15 bullets were fired into the home but that no one got shot?…the “I didn’t see nothin” virus must still be at epidemic proportions because no one has come forward to identify just who or what fired 15 shots into a home?…of course the EPD will step up their patrols but the truth is that unless the people of any given neighborhood will find a cure for the “I didn’t see nothing” disease crimes like this will go unsolved and havoc will continue to expand?…we plead and encourage the people of areas plagued by drug and gang violence that this probably was to come forward and turn the perpetrators in so Evansville’s official homicide rate can once again be lower than LA’s?

IS IT TRUE that President Obama after 3 weeks has finally acknowledged that the technology launch of ObamaCare is not acceptable and that there is no excuse for the website to be crashing and reporting false and insufficient data to insurers?…he has also been holding some blame-storming meetings so he can visibly roll some heads over these problems?…some IT professionals and programmers are stating that the technology chosen by the Obama Administration is outdated and that the implementation may be better off if this $625 Million code mess is scrapped altogether?…rolling the heads of Sebillius and a few others for public show will not solve the problem of passing legislation without reading it and of not hiring capable people to lead a tech based effort?…we shall say again that if the Obama Administration would have been in charge of the Manhattan Project and the D-Day invasion that we would all be bilingual (German and Japanese) citizens of a very different nation?…it is time for these people to stop the bullcrap sessions and start to actually do something?

Indiana State Police to Participate in Drug Take Back VII

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ISPIndianapolis: This Saturday the Indiana State Police will be partnering with the U.S. Drug Enforcement Administration (DEA) and numerous other law enforcement agencies across the United States in the seventh drug take back event in three years.

Last April, Americans turned in 371 tons of prescription drugs at over 5,829 sites operated by the DEA and its thousands of state and local law enforcement partners across the U.S.
This initiative addresses a vital public safety and public health issue. Medicines that languish in home cabinets are highly susceptible to diversion, misuse, and abuse. Rates of prescription drug abuse in the U.S. are alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs. Studies show that a majority of abused prescription drugs are obtained from family and friends, including from the home medicine cabinet. In addition, Americans are now advised that their usual methods for disposing of unused medicines—flushing them down the toilet or throwing them in the trash—both pose potential safety and health hazards.
This Saturday, October 26 Hoosiers can dispose of any expired or unwanted drugs by simply taking those drugs to their nearest Indiana State Police Post (with the exception of the Toll Road Post in Bristol, IN) between the hours of 10 a.m. and 2 p.m. and dispose of them in a designated receptacle, no questions asked. There will also be a drop off site located at the Indiana Government Center on Friday, October 25 between 10 a.m. and 1 p.m. It should be noted the drug take back is for pills, capsules, and liquids only. No sharps will be accepted.
For those individuals who do not live near an ISP facility, the links below will assist you in determining the nearest drop off location.
http://www.deadiversion.usdoj.gov/drug_disposal/takeback/
https://www.deadiversion.usdoj.gov/NTBI/NTBI-PUB.pub?_flowExecutionKey=_c1955CC4A-07CC-19A6-B5FD-0D10B9B3CBAD_k39620E77-8DA9-FC3B-741E-A09A85CEB267

For full details, view this message on the web.

WALORSKI, INDIANA LAWMAKERS CALL FOR HEALTH CARE ENROLLMENT NUMBERS

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WASHINGTON, D.C. – Congresswoman Jackie Walorski and Hoosier lawmakers sent a letter to Health and Human Services Secretary Kathleen Sebelius today requesting information on the number of Hoosiers currently enrolled in the health care exchange.  Over the past three weeks, numerous malfunctions and problems have been reported with the website, preventing applicants from successfully enrolling in the health care exchange.

“We have received numerous reports from Hoosiers who have been unable to enroll due to website malfunctions as well as complaints from Hoosiers who can no longer afford the new premium amounts.  As we work to assist these constituents, it is important that we are able to provide them accurate data regarding the health insurance exchange,” wrote lawmakers.

Since Saturday, roughly 476,000 applications have been filed in state-run and federally-run health insurance exchanges that started October 1st.  These filed applications do not represent the number of individuals who have actually obtained coverage through the exchange.  The Administration has released no information to the public on this figure.  Low enrollment numbers have been largely attributed to technical problems, such as trouble creating accounts and confusing error messages.

This Thursday, the House Energy and Commerce Committee has scheduled a hearing to examine the health care law’s rollout.  To date, Secretary Sebelius has refused to testify, despite written requests from the committee to reconsider the invitation.

Full text of the letter:

October 21, 2013

The Honorable Kathleen Sebelius
Secretary of Health and Human Services
The U.S. Department of Health and Human Services
200 Independence Avenue, S.W.
Washington, D.C. 20201

Dear Secretary Sebelius,

We are writing to request information about the number of Hoosiers who have applied for and enrolled in insurance plans on the health insurance exchange since its launch on October 1, 2013.

Please provide the total number of applicants in Indiana as well as the number of applicants in each Indiana congressional district.  Please also provide the total number of enrollees in Indiana as well as the number of enrollees in each Indiana congressional district.

We have received numerous reports from Hoosiers who have been unable to enroll due to website malfunctions as well as complaints from Hoosiers who can no longer afford the new premium amounts.  As we work to assist these constituents, it is important that we are able to provide them accurate data regarding the health insurance exchange.

We look forward to receiving the requested information in a timely fashion and appreciate your attention to this matter.

Sincerely,

Rep. Jackie Walorski

Senator Dan Coats

Rep. Susan Brooks

 

Rep. Larry Bucshon, M.D.

Rep. Luke Messer

Rep. Todd Rokita

Rep. Marlin Stutzman

Rep. Todd Young

Debunking the Myths of ObamaCare So Far

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By: Megan McArdle

I’ve been seeing a few things floating around the blogosphere about Obamacare that aren’t true. They’re not really conservative or liberal talking points; they’re just misconceptions that people may have about how the health-care law works. So it seems worth pointing them out, especially because relying on some of these “facts” could get you into big trouble:

You have until March 31 to buy health insurance. This is technically true: Open enrollment ends on March 31. So you can buy health insurance up until then. But you have to buy insurance well before that if you want to avoid paying the mandate’s penalty. Basically, the Patient Protection and Affordable Care Act says that in order to avoid paying the fine for being uninsured, you have to be insured by the end of March. But insurance policies begin on the first day of the month, which means that you need to buy insurance by February. And because it takes a couple of weeks to process a policy, in practice, you need to purchase by Feb. 15. If you buy insurance after that, you will still be insured — but you will also need to pay a penalty. Which brings me to my second untrue “fact”:

The penalty for being uninsured next year is $95. Again, this is partly true. In fact, the penalty for being uninsured next year is $95 or 1 percent of your income, whichever is higher. So if you make $75,000 a year and you decide to go without insurance, the penalty will be $750. There are a number of things you can do to avoid having to pay it, from deliberately getting your utilities shut off to under-withholding taxes from your paycheck so that they don’t have a refund from which to take out the penalty. But that number is what will go on the books at the Internal Revenue Service, not the $95 you’ve probably heard.

If the exchanges don’t work, as a last resort, we can always get people signed up through call centers. It’s true, there are call centers. But the computer systems at the call centers for states running the insurance exchanges are the same as the computer systems that consumers are having such a hard time with. A nice woman at a federal call center told me that (at least for the state of Florida, where my in-laws live) there is an alternate procedure: They can fill out a manual application in PDF format. But she also told me that it takes three weeks for that application to be mailed to your house. After you receive it, you check the application to ensure it’s accurate, and then mail it in. One to two weeks later, you will be notified of your subsidy eligibility. Then you can actually enroll in a plan, though she wasn’t quite clear on how that part would work — do you call back again?

This may work for older people who simply can’t figure out how to use computers, or for desperately ill people who have been rebuffed by the computer system . . . but so will repeatedly logging in until you finally get the system to work. It is unlikely to get loads of healthy, young, premium-paying folks to sign up for insurance and thereby make this whole thing financially viable. And by the time we’re ready to default to this option, it’s unlikely that there will be enough time to make it work.

The state exchanges are doing fine. This isn’t exactly wrong. It’s just that it’s actually very hard to tell how the state exchanges are doing. The numbers being thrown around by various news sources are inexact and confusing. People are using “enrolled” to mean all sorts of things, from creating an account on the exchange to actually selecting and signing up for a plan. (The latter is what it should actually mean. Arguably, we should restrict it to people who have actually paid a premium, but because premiums aren’t due until Dec. 15, that wouldn’t be very useful.)

David Freddoso at Conservative Intelligence Briefing points out that people are also blurring together two numbers that should be kept separate: people who have bought insurance through the exchanges and people who have signed up for Medicaid. The latter is important in terms of reducing the number of uninsured. But getting a bunch of people signed up for Medicaid doesn’t do anything for the health of the exchanges, because people on Medicaid do not pay premiums or participate in the risk pool. The Barack Obama administration has been expecting 7 million people to join the exchanges in the first year, with a slightly larger number going onto Medicaid.

Here’s what Freddoso found when he dug into the numbers:

In Oregon, that 56,000 number you’re hearing today is all Medicaid. Their online exchange doesn’t even work yet. The state bulked up its Medicaid rolls by targeting food stamp recipients. So great, those folks have some kind of insurance (whether or not a doctor will see them), but it tells us nothing about the private health insurance exchanges — the middle class version of Obamacare — or how they’re going to fare.
Something similar is happening in many other states as well. Minnesota, for example, said it had 3,800 applicants. But when you scratch the surface, only 406 of these are Obamacare exchange applicants — again, most of the signups were low-income customers who were steered to Medicaid instead.
Washington State is Obamacare’s biggest success story so far. But it has only about 3,000 people actually enrolled in the private exchange plans. Nearly 90 percent of enrollees so far are going to Medicaid instead. Although it isn’t completely clear from their confusing presentation of the numbers, it appears they have as many as 25,000 exchange applicants in all, if you include people who have applied but haven’t paid. Even so, that’s half the number people have been bragging about from Washington. So even the best success story is perhaps less exciting than believed.

California, has put 600,000 new people on Medicaid, but their last hard number of actual, completed applications for the exchanges was under 17,000. That’s over a week old, but I’m still skeptical when I see them say that 100,000 “are in some stage of applying for insurance on the marketplaces.” Why all those weasel words? Have those people completed applications — in which case California is doing great — or have they merely entered their zip code and started looking at plans? California may not release any reliable numbers on their exchange enrollment until next year.

Now, that doesn’t mean that you should freak out and declare that no one’s ever going to sign up for insurance on the exchanges. In the early days of the program, we would expect to see most of the interest coming from people who are older, sicker and poorer than average, because those are the people who have found it hardest to buy cheap insurance — and who will benefit the most from getting it, through subsidies or community rating.

But it does mean we should watch those numbers. Ultimately, Obamacare will only be economically and fiscally sustainable if it can also get the rest of the uninsured to join the ranks of the insured. Almost all of the reporting has focused on people who have found it hard to get insurance in the past. But the health of the program ultimately depends on roping in people who could easily buy insurance right now — but haven’t bothered, for one reason or another.

It’s too early to know at this point whether most of the state exchanges can handle a big rush of people who want to buy insurance policies, because at this point, few state exchanges have yet to do so.
This is a good reminder to everyone of just how many things are in flux about this system right now. Even things you’ve seen reported widely may turn out to be more complicated than you think.

Source: Bloomburg

Andrew McNeil Announces Bid for 8th District Congressional Seat‏

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Download CandidancyAnnouncement_10-08-13.JPG (848.8 KB)
 Andrew McNeil of Freedom, Indiana has announced that he 
will be running against Rep. Larry Bucshon in the 2014 Republican 
primary.

“Today I stand before you in the spirit of 1776,” said McNeil. “Now is 
not the time for timidity. It is not the time to cower in fear. Today we 
must lead. We must stand and fight with dependence upon the same God who 
saw us through 237 years ago, albeit with humility.”

McNeil will focus his campaign on listening to the voice of the people 
of the 8th district and representing their concerns as opposed to the 
interests of the political structure in Washington. He will also 
highlight the responsibility of leaving a prosperous and free nation for 
future generations.

Issues that McNeil has placed at the top of his priorities include 
REPEALING Obamacare, fiscal responsibility, returning America to 
Constitutional government, and reviving a stagnant economy.

“Obamacare is an unprecedented betrayal of all that we are as a nation,” 
said McNeil, “from its violation of our religious freedoms to its 
unconstitutional control over every area of our lives. This fight should 
have been fought a long time ago, but now that we are engaged, it must 
be seen through until there is a clear victory.”

McNeil, along with Andrea, his wife of 19 years, and 7 children, resides 
in Freedom, Indiana, where he has lived for 28 years. In addition to 
operating a family farming business, he works at Ronnoco Coffee Company, 
where he has been employed for 16 years. For more information about 
Andrew McNeil and his platform visit www.andrewmcneilforcongress.com.

The 30 for 30 Project

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The 30 for 30 Project

I turned 30 on Friday, September 27th. In general, I don’t “make a big deal” of birthdays, but this year feels special, and I want your help in celebrating.

 

I’m putting out a challenge: sometime during the next 30 days, I’m asking you to donate to the Arts Council. Think about it… if just 30 people give $30.00, the Arts Council will receive $900.00! That’s enough to host three receptions at events or openings, or enough to hire three bands to perform in the gallery, or to commission a small mural. $900.00 is enough to cover the awards for a new juried show, or to use as a first investment in some of the exciting arts ideas being generated by the community and in our office (so new and exciting that I can’t tell you about them yet, but believe me, they’re good).

 

I’m making the first gift. $30.00 to the Arts Council in honor of my birthday. Please join me by calling 1(812) 422-2111 or sending a donation to 318 Main Street Suite 101, Evansville, IN 47708, and help to make my 30th year the best yet for arts in our community!

Foodborne Illness: Touch, Time, Temperature and Tidiness

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Dr. Arnold

By

Roy M. Arnold, MD

“Salmonella Outbreak Sickens Hundreds in Multiple States.” “Caribbean Cruise Cut Short Due to Norovirus Outbreak.” We’ve all seen the headlines telling of the latest foodborne illness outbreak in the country. Are there really more foodborne illnesses these days, or is medical science just able to detect them more efficiently? Let’s take a look.

Gastroenteritis is the medical term for an illness which involves nausea, vomiting and/or diarrhea. It is often referred to as “stomach flu,” a misnomer since the disease has nothing to do with influenza or respiratory illness. With better case definition, the number of cases of gastroenteritis has declined over the past 12 years by about 33 million cases per year from 211 million in 1999 to 178 million in 2011. Less than 1% of all cases of such gastrointestinal illness or about 9 million are traceable to contaminated food. The most common types of food associated with foodborne illness are produce, accounting for over half, followed by meat products, mainly poultry and dairy accounting for 42% and finally fish or shellfish.

The most common organisms accounting for foodborne illnesses were Norovirus, Salmonella, Listeria and Campylobacter. Norovirus is a highly contagious virus that causes a 2-3 day gastrointestinal illness. Most frequently the virus is spread person-to-person by direct contact or through food prepared by sick workers. This virus has caused many cruise ship outbreaks. Salmonella is a bacteria found on nearly all poultry and eggs. It cannot be effectively removed by washing but can be easily killed by thorough cooking and proper storage. Listeria is more commonly found in unpasteurized dairy products or in deli meats like sliced turkey or bologna. Campylobacter is a bacterium that is most commonly found in birds or domestic animals. It can be spread through undercooked poultry, contact with contaminated objects like cutting boards or utensils, or by contact with an infected animal.

Foodborne illnesses can largely be prevented by practicing the 4 T’s of food safety: Touch, Time, Temperature and Tidiness.

Touch – Never handle cooked food or raw meat with your bare hands. Always use vinyl gloves or clean utensils. Utensils, knives, cutting boards and counter tops must be thoroughly washed in hot water and soap or decontaminated with a bleach containing disinfectant before reuse. Never use plates that have touched raw meat to hold or store cooked food. If dining at a buffet always use a clean plate if returning to the buffet for seconds.

Time – Cooked food must not be allowed to cool to room temperature, or to sit at room temperature for more than 1 hour

. Leftovers stored in the refrigerator must be discarded, used or frozen within 48 hours. Make a habit of time/dating leftovers with a marker.

Temperature – Buy a digital meat thermometer and use it to judge the internal temperature of food to ensure thorough cooking. Poultry should be cooked to an internal temperature of 165 degrees, Ground meat to 160 and whole meat to 145 degrees. Fish should be cooked to 145 degrees or until the flesh is opaque and flakes. Eggs should be cooked until the white is completely opaque. If serving food at a buffet, it should be kept below 40 degrees or above 140 degrees during the entire period of serving.

Tidiness – Always wash your hands with soap and water before handling food and use vinyl gloves. Wash all dishes, cutting boards, utensils and countertops with soap and hot water after contact with raw food, or decontaminate with a bleach-containing disinfectant.

As the holiday season approaches take extra caution to ensure that your family and guests are not exposed to possible contamination. Forget about stuffed turkey and bake the stuffing separately from the bird. Even 1 drop of uncooked poultry juice can cause illness in humans. Make certain all cooked food reaches an internal temperature of 145 degrees, or in the case of poultry 165.  Be attentive to internal and storage temperatures, time at room temperature and cross-contamination. Persons who are ill with a gastrointestinal disease (nausea, vomiting or diarrhea) should not prepare or serve food.

If you do become ill with a gastrointestinal illness, contact your primary health provider if high fever or bloody diarrhea are present, if dehydration develops or if the illness does not resolve in 2-3 days. Children, the elderly, and those with chronic illnesses can be quite vulnerable. Have a happy and healthy holiday season!

IS IT TRUE October 21, 2013

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Mole #3 Nostradamus of Local Politics
Mole #3 Nostradamus of Local Politics

IS IT TRUE October 21, 2013

IS IT TRUE sources tell the City County Observer that the water department managers ALL have take-home vehicles?…these vehicles are reportedly not just Ford Festivas either?…we’re talking Ford F-150s and bigger, some quad cab trucks?…we wonder why does a water/sewer dept person need a take home vehicle?

IS IT TRUE it has been 3 weeks since we all celebrated the deal made by the Winnecke Administration that is intended to result in a downtown convention hotel in Evansville?…we have been in this position three times before where we waited around for financing to materialize so it is time to start thinking a little beyond the headline numbers and sources of funds and start asking questions about where will these funds come from and what is the probability that this will really happen?…as a reminder the construction cost of the hotel part of the project has been reported to be right at $44 Million breaking down to $7.5 Million from the City of Evansville and $11.5 Million from a group of local investors lead to the table by Bob Jones who serves as the CEO of Old National Bank, leaving $25 Million to come from HCW in some combination of cash and loans?…on the surface this seems like an approach that may really work if the stars align and the cash in the deal is sufficient to satisfy a lender?…we should not let the $44 Million construction cost blind us to the fact that this hotel will not appraise for $44 Million using either the projected cash flows or comparable sales?…the appraisal is expected to land in the $25 Million range making both the City and the local investment group’s dollars completely out of the money on day one?

IS IT TRUE the first hurdle in this financing is up to HCW and their banking partners whomever that may be?…given an expected appraisal of $25 Million that corresponds to HCW’s commitment to the project this makes this a simple loan to value transaction?…if their bank requires a 20% down payment for a commercial property then HCW has to come up with $5 Million, if the requirement is 1/3 the down payment will need to be $8.325 Million?…this is a simple go or no-go criteria. Either HCW has this and is willing to commit it or they don’t?…from all we have heard there is no reason to believe that this will not happen?…funding will certainly come with the contingency that both the City of Evansville and the ONB lead group comes through with all of their money?…it is safe to assume that the City of Evansville will come up with the $7.5 Million as their bonding ability far exceeds this amount?

IS IT TRUE the biggest challenge to success seems to be whether or not Mr. Jones is able to find local accredited investors who are willing to put up a total of $11.5 Million for something that has limited or zero value on day one?…local accredited ($200,000 annual salary or $1 Million liquid net worth) investors will want to know what the return on their investment is and what the exit strategy is?…it has been stated that the hotel cannot be sold by HCW for 5 years so assuming a 7% annual return (appropriate for this kind of risk) and a 5 year exit the $11.5 Million will have to grow to $16.12 Million to achieve that return?…when selling fees are considered this would require that the hotel would sell for roughly $70 Million?

IS IT TRUE a valuation like $70 Million would need an 80% occupancy rate with an average daily rate of over $210 per room?…one thing is for sure and that is the local investors will have to believe that this convention hotel will command rates that are more than double what Evansville currently averages at an occupancy rate that is nearly 50% higher than Evansville has ever achieved?…if the local investment group consists of a very small number of people all of whom are willing to take a giant risk in a project they strongly believe in this has a decent probability of working out?…if this gets cut into very small pieces like 115 investments of $100,000 each the risk of finding the investors increases?…we wish Mr. Jones well in his quest but do point out that it is the private investment dollars that will either make or break this deal assuming HCW is willing to commit to a down payment sufficient to satisfy their bankers?

IS IT TRUE then there is the issue that HCW is only going to own about 75% of the hotel and banks will only consider 75% of the appraisal as collateral?…that means a higher down payment unless the local investors are willing to subordinate their equity to HCW’s debt?…this will be trickier than the headlines and talking heads have lead us to believe?…this all may be possible but the probability indicates this is no slam dunk at all?