In Brenda Williams’ 35-year career in public housing, she has seen a lot. From the front lines of moving families into new homes to strategic planning sessions in board rooms, Williams makes it her business to ensure that affordable housing is within reach of everyone she can. “Housing is a life necessity,” she says, “and anything I can do to help people obtain it inspires me.”
This commitment to the wellbeing and safety of others has made her a trusted leader and subject matter expert, as well as one of Tallahassee’s 25 Women You Need to Know in 2024.
Williams chose Tallahassee. After working her way to the role of executive director of the St. Louis, MO, Housing Authority, serving as Transitional Administrator for the Camden New Jersey Housing Authority, and finally serving as the Chief of Staff for the New Orleans Housing Authority, she spent another 14 years in consulting work, providing strategic management services to housing agencies throughout the southwest. “I was in and out of 52 housing authorities over the course of 35 years,” she says.
Class of 2024:25 Women for 2024: Dr. Selika Sampson has a passion for community service
She decided it was time to make a home for herself. “I was tired of traveling every week,” she said. “And after growing up in the Midwest, I chose Tallahassee because of the weather.”
Now, she enjoys her current role of executive director of the Tallahassee Housing Authority, a job she embraces for its nuances and purpose. “My day often begins with text messages from people looking for a home,” she says. “When I can help someone find housing, it’s a good day. I just wish I was able to help everyone.”
To that end, she is a volunteer for Tallahassee Crime Solvers as a board member. “I want to be part of the solution in the neighborhoods that are often served by my work,” she said.
Much of her time is spent working on the $82 million redevelopment of the former Orange Avenue Apartments. “Moving someone into an apartment and off of the street is the most rewarding part of my work,” she says. “I like what I do because it’s an opportunity to change lives for the better and helps to make communities thrive.”
Construction on the second phase is projected to be complete in June, and she looks forward to moving families back into their new homes.
She always knew she wanted to work in social services, and earned a Bachelor’s degree in Sociology and a Master’s in Sociology/Social Work from Lincoln University. “I immediately went into my first job as section 8 coordinator in the St. Louis Housing Authority,” she said. “Back then, urban planning was not a field of study.”
Williams chose Tallahassee for the weather, and she stays because of the community. “The people in Tallahassee are kind and caring,” she says. “I love cooking for my friends, entertaining, and being at home!”
Seeing opportunity and hope for affordable housing in Tallahassee, Williams hopes that we will keep our eye on the prize. “The most important thing Tallahassee can do is stay focused on looking for creative ways to provide housing that is affordable in today’s economy,” she said. “All we have to do is stay focused on what is possible.”
Through the first two-and-a-half months of 2024, Volusia County has already seen the sale of at least 41 luxury homes for $1 million or more.
That number already exceeds the 38 million-dollar-plus homes sold during the first three months of last year.
Most, although not all, high-end homes in Volusia County are purchased in cash, according to Realtors. A few deals involve financing, but not as much as for homes sold for less than a million dollars. That’s why luxury home sales are not as affected by high interest rates as properties listed in lower price ranges.
Here’s a look at the top luxury home sales in Volusia County so far this year.
1. 1316 N. Peninsula Ave., New Smyrna Beach
SALE PRICE: $7.4 million
DATE SALE CLOSED: Feb. 7, 2024
DESCRIPTION: Built in 2005, this 3-story riverfront home has 5 bedrooms, 7 baths and 7,439 square feet of living space on a 0.41-acre lot. The open-concept floor plan includes floor-to-ceiling windows in the grand living area and panoramic views of the Indian River and surrounding landscape. The home includes a gourmet kitchen and a separate combination kitchen/family room. Outside, it offers an expansive terrace along with a pool, spa, covered patio and a dock and boat house with a boat lift. The property also includes an attached 2-car garage.
WHO HANDLED THE DEAL: The listing agent was Loretta Burn of Haven Waterfront Real Estate in Edgewater. The buyers were represented by G. Scott Yurchison of Collado Real Estate in New Smyrna Beach.
2. $5.18 million: 700 N. Peninsula Ave., New Smyrna Beach
SALE PRICE: $5.185 million
DATE SALE CLOSED: March 1
DESCRIPTION: Built in 2009, this 5-bedroom, 6-bath house along the Intracoastal Waterway offers 5,120-square-feet of living space and a 3.5-car garage. It sits on a half-acre lot with 57 feet of frontage along the river as well as a dock. The backyard includes a covered lanai and an outdoor kitchen as well as an infinity pool and spa and a view of the Ponce Inlet lighthouse located just a mile to the north.
WHO HANDLED THE DEAL: The listing agent was Realtor Terri Jackson of The Keyes Company in New Smyrna Beach. The buyers’ agent was Pat Collado, the broker/owner of Collado Real Estate in New Smyrna Beach.
More:Ormond mansion of Hawaiian Tropic’s Ron Rice finally sells for $3.6M
3. $3.6 million: 175 Ocean Shore Blvd., Ormond Beach
SALE PRICE: $3.6 milllion
DATE SALE CLOSED: March 15
DESCRIPTION: Built in 1987, this 4-bedroom, 5-bath oceanfront home was the longtime home of the late Hawaiian Tropic founder Ron Rice, who died in May 2022 at the age of 81. The massive three-story house offers 12,400 square feet of living space and sits on a full acre that includes 200 feet along the beach.
The home includes a room that Rice used as a discotheque modeled after the famous Studio 54 in New York City. The mansion’s crowning glory is its huge indoor pool adorned with statues of winged fairy nymphs that connects to one of the property’s two outdoor pools.
WHO HANDLED THE DEAL: The listing agent was Bill Navarra, the broker/owner of Realty Pros Assured in Ormond Beach. Navarra wound up representing both the Ron Rice Estate as well as the buyers, a couple from the Carolinas whose son plans to relocate from South Florida to live in the house.
4. $3.4 million: 357 N. Beach St., Ormond Beach
SALE PRICE: $3.4 million
DATE SALE CLOSED: March 4
DESCRIPTION: Built in 2012, this 4-bedroom, 4.5-bath riverfront home offers 6,813 square feet of living space. It sits on a 0.67-acre lot that includes 150 feet along the Halifax River as well as a refurbished dock. The backyard includes a pool and spa. The view from the house includes the river as well as the Granada Bridge.
WHO HANDLED THE DEAL: The listing agent was also the property’s seller, Janelle Mertins, a Realtor and former owner of Pegasus Realty & Associates in Ocala. Mertins bought the home two years ago as a vacation getaway. The buyers’ agents were Matthew Renshaw and Ann Alexander, both with Realty Pros Assured in Ormond Beach.
5. $3 million: 1000 Sudbury Lane, Ormond Beach
SALE PRICE: $3 million
DATE SALE CLOSED: March 15
DESCRIPTION: Built in 2021, this 5-bedroom, 6.5-bath custom home in Ormond Beach’s Plantation Bay community offers 5,835 square feet of living space and includes a four-car garage. It overlooks a golf course. The 1.03-acre property includes a pool, an outdoor kitchen, and a full bath. The house includes an additional apartment suite.
WHO HANDLED THE DEAL: Realtor Debbie Spelman of Venture Development Realty (based at Plantation Bay) represented the sellers. Her colleague at Venture Development Realtor, Realtor Carol Paquette, represented the buyers.
Good news for Southwest Florida home owners.
New research has revealed which states properties are most likely to be sold and rented this year. Florida is No. 2 on the list.
The research, pulled together by online self-storage finder Storage.com analyzed nationwide and regional Google searches for keywords related to real-estate sites such as Zillow and Trulia, to identify which states have the biggest interest in moving.
More:Top 10: February’s most expensive house sold for whopping $26M in Collier County
More:Top 10: February’s most expensive house sold for whopping $7.25M in Lee County
These searches were then compared against local populations to identify where reported the highest desire.
According to the research, “a huge 476,050,700 Google searches were made for property and rental sites last year across the US.”
Florida came in with 13,985 searches per 100,000 people – 18% above the national average.
Colorado topped the list as the state where properties and rentals are most in demand. The state averaged 14,414 searches per 100,000 residents, which is a fifth (21%) higher than the national average of 11,869 searches per 100,000 residents.
What state is at the bottom of the most searches list, or homes least likely to be sold or rented? Alaska sellers and landlords are least likely to receive interest, with only 6,025 searches per 100,000 people, which is 49% lower than the national average.
What is the best time of year to sell or rent a home?
As well as naming the states where properties and rentals will receive the highest and lowest levels of interest, the study also revealed the time of year that is best to list them.
Searches around real-estate websites peaked in March last year, with a total of 44,698,660 − 13% more than the monthly average of 39,670,892, so owners may have already missed the prime time to list unless they are ready to advertise their properties now.
If Cape Coral, one of the fastest growing cities in the U.S, has been a financial reach for people shopping for a new home, a new study from researchers at Florida Atlantic University and Florida International University indicates the gap could be closing.
According to the study, housing premiums in many markets in the country are starting to decline, suggesting many areas across the country are moving toward stabilization.
A premium is measured by the degree of overpricing in terms of a percentage difference between actual and statistically modeled home prices.
What about rent prices?:Rent shock: Study reveals Cape Coral costlier than Tampa, Orlando, Seattle, other big cities
Cape Coral, the second most overvalued market in the study, had a 62-basis point decline. The data is from the Top 100 U.S Housing Markets.
“This is good news as it signals these markets could be getting to where prices should be, slowly but surely, creating less risk for catastrophic loss in average home value,” said Ken H. Johnson, Ph.D., real estate economist in FAU’s College of Business. “Ideally, we want to find our way back to the long-term trend for each metro area with as little pain as possible.”
What about housing prices in other cities?
The study showed In eight out of the 10 most overvalued housing markets, housing price premiums have started to edge back down toward their long-term pricing trends.
- Atlanta, the most overvalued market in the country, posted a 12-basis point decline in its housing premium over the past month.
- Florida cities like Tampa, the fourth most overvalued, had a 17-basis point decline and Palm Bay, fifth most overvalued, a 31-basis point decline.
- Knoxville, the sixth most overvalued, had a 13-basis point decline.
- Lakeland, the eight most overvalued had a 23-basis point decline.
- Orlando, number nine, saw a six-basis point decline.
- Charlotte, the tenth most overvalued, saw a 14-basis point decline.
More housing price trends highlighted in the analysis
The Top 100 U.S. Housing Markets, a monthly index in FAU’s Real Estate Initiative, measures housing premiums and discounts in the 100 most populated metropolitan areas in the country by looking at the difference in actual average home price in a city and comparing it to the long-term home pricing trend for the same city to calculate how overvalued or undervalued housing markets are using publicly available data from Zillow.
Several Florida metros also signaled that prices are stabilizing as eight out of the nine measured metros saw small declines in premiums. Examples include North Port with a 75-basis point drop in its housing premium between end of December 2023 and the end of January; Deltona with a 39-basis point drop; and Jacksonville with a 16-basis point drop.
“Equity gains remain strong for current homeowners and prospective homebuyers can get a little breather knowing that prices are slightly more stable. All in all, these are good signs for the housing market,” said Eli Beracha, Ph.D., director of FIU’s Hollo School of Real Estate.
South Florida remains an area of concern for researchers as it was the only measured metro in the state where housing premiums did not decrease, instead going up by 23 basis points.
“As prices are on the upswing still in Miami and premiums aren’t showing signs of heading back to the area’s long-term pricing trend, it might be better, in terms of wealth creation, to rent and reinvest monies that would have otherwise been put into homeownership,” Johnson said.
DAYTONA BEACH − A new national ranking lists Deltona-Daytona Beach-Ormond Beach as the ninth-slowest metro area in the country to sell a house.
The ranking by CreditNews.com comes as a surprise to P.W. Mabry, president of the Daytona Beach Area Association of Realtors.
“We’re selling properties like crazy right now,” said Mabry, an agent with Re/Max Signature in Ormond Beach. “Our numbers (volume of homes sold) are going up.”
How did they come up with the ranking?
New York-based CreditNews.com based its ranking of the nation’s 10 fastest and 10 slowest metro areas to sell a house on data from real estate website Zillow.com, which found that it took a median of 39 days for a listing to be put under contract to be sold in the “Deltona” metro area in January.
“When referring to ‘Deltona,’ we meant the entire metro area, encompassing Deltona–Daytona Beach–Ormond Beach,” confirmed Dan Runkevicius, chief editor for CreditNow.com in an email. “The data was sourced from Zillow’s ‘for-sale inventory’ data set.’ Housing inventory was then adjusted to account for the size of the metro population.”
Florida Realtors Association data showed the “median time to contract” for existing single-family homes in Volusia County in January was actually 41 days, according to a copy of the report provided to The Daytona Beach News-Journal by the West Volusia Association of Realtors.
The Daytona Beach Area Association of Realtors reported that the median time to contract for properties listed by its members was 53 days.
The statewide median time to contract in January was 43 days, according to the Florida Realtors Association.
Nationally, the median time to contract for homes to be put under contract was 36 days in January, according to the National Association of Realtors.
It’s based on a ‘Zestimate’
Mabry said he takes data provided by Zillow with a grain of salt.
“(Real estate) brokers must click on a button that allows Zillow to get their information,” he said. “I know for a fact that not all brokers click on that button.”
“Zillow also has in small print on its reports that when they give you an appraisal value for a property that they call it a ‘Zestimate.’ That’s so they can’t be sued (if the information is incorrect),” said Mabry. “It’s their personal opinion.”
“We have people tell us all the time that ‘Zillow says my house should sell for a half-million dollars,’ but that’s not necessarily the case,” he added. “Their ‘Zestimates’ are only within 5% of the actual sale price of a home about half of the time.”
John Adams, president of Adams, Cameron & Co. Realtors in Daytona Beach, also expressed skepticism regarding Zillow’s latest ranking for the Deltona metro area.
“Zillow has a very good statistics team and generally produces good results, however, in this case, I can’t agree,” said Adams.
Adams, Cameron has 300 agents in eight offices in Volusia and Flagler counties, the most of any real estate brokerage in the combined two-county area.
Local market back to pre-pandemic levels?
Florida Realtors Association data for the Deltona-Daytona Beach-Ormond Beach area, which encompasses the combined Volusia County-Flagler County area, showed that the median time to contract for homes locally rose to 33 days in 2023, up from 13 days and 11 days in 2022 and 2021, respectively.
Despite the increase, the median time to contract remained lower than in 2019 (41 days), the year before the COVID-19 pandemic-fueled real estate boom in Florida began.
“I like the (Florida Realtors) view over time, because it is more objective,” said Adams.
What CreditNews had to say about its rankings
The report by CreditNews.com stated that its study “reveals a major shift in best-selling markets since the onset of Covid. None of the top fastest-selling metros pre-COVID remain on the list today, and vice versa.
“Part of the reason behind this realignment is different inventory levels across the nation − which, we found, has a strong connection with how fast listings sell.”
What do the latest local housing numbers say?
According to countywide data provided by the West Volusia Association of Realtors, Realtors in Volusia County sold 509 homes in January, up 3% from 494 a year ago. The median sale price rose to $350,000, up 4.8% from $333,990 in January 2023. The inventory of active listings climbed 21.8% year-over-year to 2,384, compared with 1,957 a year ago.
Still, the month’s supply for Volusia, meaning how long in theory it would take to deplete the inventory if no new listings are added, remained tight at 3.3 months, compared with 2.5 a year ago.
The statewide month’s supply in January was 3.8, according to Florida Realtors.
According to the National Association of Realtors, that means the local real estate market remains tilted somewhat in favor of sellers. “Historically, six months of supply is associated with moderate price appreciation, and a lower level of month’s supply tends to push prices up more rapidly,” the NAR website states.
Who else made the fastest and slowest lists?
According to CreditNews.com, the 10 fastest metro areas to sell a house in January, along with the median days on market, were as follows: 1. Hartford, Connecticut (8 days); 2. tie between Rochester and Syracuse, New York, and Harrisburg, Pennsylvania (9 days); 5. tie between Richmond, Virginia, Grand Rapids, Michigan, and New Haven, Connecticut (11 days); 8. tie between Boston and Worcester, Massachusetts, and Columbus, Ohio (12 days).
Jacksonville was the other Florida metro area, along with Deltona to make the 10 slowest metro areas list: 1. Austin, Texas (66 days); 2. McAllen, Texas (53 days); 3. Poughkeepsie, New York (51 days); 4. San Antonio, Texas (49 days); 5. New Orleans, Louisiana (48 days); 6. Jacksonville, Florida (42 days); 7. tie between Cape Coral, Florida, and Colorado Springs, Colorado (41 days); 9. Deltona, Florida (39 days); 10. New York, New York (37 days).
Why do some homes take longer to sell?
While some homes locally sell within days of being listed, others can go months without receiving an offer, often resulting in a lowering of the asking price.
“When homes sit on the market, there can be a lot of reasons,” said Mabry. “In some cases, it could be a property that requires extensive repairs or updating. Being over-priced is almost always the No. 1 reason. You have sellers out there trying to get top dollar for their home, in some cases against the advice of their Realtor.”
A 26-acre private island know as Pumpkin Key is on the market for $75 million.
The listing managed by Liz Hogan of Compass offers combo deal including a mainland home in Key Largo and the entire island with multiple amenities for convenient management of the estate.
“There are two ways this will sell,” Hogan told USA TODAY in an interview. “Either it will go for a family looking for a family compound and a legacy property or a developer will buy it to build on the island and sell the parts.”
The estate’s current owner, a family from the Midwest, has used it as a family compound but its generations are growing out of it, Hogan said.
More:See retired Alabama football coach Nick Saban’s $17.5 million Florida home
Listing includes mainland home with dock, 4-minute boat ride to island
The mainland home as part of the listing is on the Key Largo coast closest to Pumpkin Key, and includes a dock that stretches more than 100 feet long to be able to boat quickly between the mainland and the island.
The home is also part of the Ocean Reef Club in Key Largo, which Hogan says is a fully sufficient yearlong resort. It has its own airport for private jets, a member-only hotel, another marina and two 18-hole golf courses.
If a buyer wants to give up that house, the island has its own 23-slip marina capable of accommodating a mega-yacht and tennis courts that convert into a helicopter pad for the brief jet to Miami.
Private island listing comes with 2 homes, 3 apartments and office
The listing comes with:
- A mainland house with four bedrooms, three bathrooms and a 140-foot dock
- A ranch-style house on the island with three bedrooms, four-and-a-half bathrooms and a pool
- Three apartments spread across two structures on the island, ranging from studio to two-bedrooms. The current owners have used these to house caretakers
- A 23-slip marina on the island with a dock office and master quarters
Each structure on the island has fiber optic cable, water and electricity. The 11 undeveloped lots on the island have the infrastructure ready for building as well.
Hogan said an acre-lot on the mainland sold for $24.5 million recently.
Consultants for Lee Health are recommending the public hospital system continue to explore converting to a private nonprofit entity.
The Chicago-based consultants Kaufman Hall hired last fall included the recommendation in a detailed report that was presented to the publicly-elected Lee Health board of directors during a three-hour workshop Thursday. It assesses the merits and drawbacks of the change.
There are many factors that led Lee Health to consider the change, including a 2019 law change that made it easier for competitors to enter the market.
While board members peppered the consultants with questions, the members were asked to submit questions in writing so answers can be provided in writing. The next workshop is Feb. 29. There was no discussion about the recommendation.
The consultants’ acknowledged more analysis is needed and that nothing is black and white with an ever-changing health care environment, which includes decisions at the state and federal level that impact policy and funding.
“Kaufman Hall’s recommendation is subject to further evaluation of the future governance model, potential conversion structure, and other operating model elements that would be developed at a later stage in this process, but that has not been determined as part of the analysis herein,” the report said.
The report identifies and estimates the costs of a conversion, but many of the benefits are challenging to quantify.
That’s because they are contingent on the “post-conversion structure or the benefits are more intangible in nature, without a direct economic measure,” the report said.
More:Lee Health’s possibility of going private hasn’t captured public’s attention yet. Will it?
More:Lee Health takes step on privatization debate: Hires consultants for analysis due Feb. 27
The consultants’ report was completed ahead of a Feb. 27 deadline that is part of clearly defined guidelines set by the state for Lee Health to conduct an analysis and decide whether to move forward or not.
What’s next in the possible move to privatization?
The board has 120 days to review the analysis and vote on whether to move forward or not. A favorable vote sets in place an Oct. 24 deadline to develop terms of a conversion with the Lee County Commission, which must approve it.
Lee Health is one of the largest public hospital systems in the U.S. and in Florida with a $3 billion operating budget, yet it does not receive direct taxpayer support through a property tax levy.
Opinion:Weighing a change to Lee Health’s governance
As a public system, it gets tax breaks in exchange for providing “community benefits” and is a safety net hospital that cares for all patients regardless of insurance status or ability to pay.
For 2023, Lee Health had $113 million in charity care and $89 million in unpaid Medicaid care and it provided $71 million in community outreach. The net community benefit was $178 million after foregone taxes of $94 million.
What did some board members say?
Dr. Larry Antonucci, president and chief executive officer of Lee Health, said one finding in the report that surprised him is that out of 530 hospitals in the U.S. that are public or government owned, only 14 are similar to Lee Health in having 400 beds or more.
What the consultants’ report did not say, which Lee Health is asking for, is how many of the 14 similar public hospitals nationwide don’t receive direct taxpayer support through a tax levy.
Antonucci said he would expect that most of them receive direct taxpayer support and that Lee Health may be one of the few that does not.
The consultants said 72% of public hospitals in Florida receive tax support.
From 2000 to 2021, the number of public hospitals decreased by 219 nationwide, the report said.
Lee Health operates four acute care hospitals, a regional children’s hospital and a nursing home with a total of 1,977 beds and extensive outpatient services.
The system serves more than one million patients annually: it had 85,000 admissions last year and its emergency rooms saw 276,000 patients. There were 2.6 million outpatient and physician visits.
Board member Therese Everly said Lee Health may be a dinosaur and she is keeping an open mind on a conversion.
She said the community sees Lee Health as an asset and she would like a valuation of all the system’s assets, which was not included in the report.
Long-time board member, Dr. Stephen Brown, who expressed concerns a while ago about a conversion, said he will put his questions in writing.
How did Lee Health get to this point?
The hospital board voted last fall to explore a conversion after the state Legislature passed a bill last year giving it the option.
Key factors that Lee Health faces are increasing competition since state lawmakers made it easier for competitors to enter the market by eliminating in 2019 the certificate-of-need process. That rule required justification for new hospital beds in a market.
In addition, private equity companies that are investing in health care makes it harder for Lee Health to stay competitive with a high share of uninsured patients, Medicaid and Medicare patients with lower reimbursement compared to commercially insured patients.
Sixty-five new hospitals have been built in Florida from 2020 to 2022 since the certificate of need rule was dropped. HCA Healthcare plans to build a 100-bed hospital at 3851 Colonial Blvd. in Fort Myers
Lee Health is moving forward with the first phase of a new hospital in Fort Myers on Challenger Boulevard between Colonial and Winkler Avenue with a price tag that could run to $465 million.
How the consultants conducted the review
Kaufman Hall broke down their analysis to seven categories, which are business and community strategy; operations; human resources; governance and structure; legal; finance; and communications.
The consultants said the system’s enabling legislation, which restricts the system to stay geographically in Lee County, is an issue because the county’s base population does not support the volumes needed to maintain quality and patient-care safety standards for certain services like pediatrics.
A conversion would allow Lee Health to expand outside of the county.
One in five patients served do not live in the county and 58% of fundraising dollars over the last three years has come from people who live outside of the county.
“Substantial demand for the Lee Health brand and reputation, with ample fundraising opportunity, offers the ability to expand into adjacent geographies, developing the population base to support enhanced service offerings within Lee County,” the report said.
As a private nonprofit entity, the system would be “better positioned to invest in partnerships with physicians via joint ventures” and could compete better with for-profit systems, the consultants said.
Another point for consideration is that by converting, Lee Health would no longer be subject to the state’s Sunshine Law of meetings being open to the public and would no longer be subject to public records’ request.
That would mean competitors would no longer have access to strategic plans as they do now.
Expect a financial hit by converting in the early years
On operations, key considerations are the 35 health clinics that receive federal dollars for caring for underserved populations system which Lee Health operates with Lee Community Healthcare.
With a conversion, the consultants said it is likely Lee Health and Lee Community Healthcare would need to transition the federally supported clinics to a new structure.
The financial impact could be a $49 million loss in federal support by a change. The consultants said in the next phase of the evaluation, the two entities would need to determine which way to go.
Another key issue is that a conversion would mean Lee Health would give up its sovereign immunity protection from large medical malpractice payouts.
Lee Health would address the loss of that protection by spending more for insurance protection of roughly $5.4 million a year.
“The loss of sovereign immunity may have a negative impact on recruitment efforts, although Lee Health would recruit providers in a manner consistent with community-focused nonprofit corporations across the state,” the report said.
In terms of how Lee Health would be governed, the analysis said that is a key consideration for long-term sustainability and for Lee Health to sustain its mission of being safety-net system for all patients.
The existing board would likely serve as the initial board for a future nonprofit entity so it remains locally governed. That recommendation was something the Lee board decided last year it would do if a conversion occurs.
The financial aspects of a conversion were easier for the consultants to present based on current financials.
Similar to other health systems, Lee Health has faced industry headwinds of expense inflation that is growing more rapidly than revenues, and it may see its operating margin reduced “but the system has historically navigated these pressures,” the report said.
Converting to a nonprofit private system may cause a loss in supplemental funding from government sources as a safety-net hospital. However, a conversion would allow for some strategic growth initiatives that include new sources of revenue.
A conversion would result in a net loss in operating income ranging from $59 million to $107 million in the first year. That would adjust the 2024 budgeted operating income from $131 million to either $24 million or $72 million, depending on how the federally qualified health clinics would be restructured.
The system’s operating margin budgeted at 4.2% in 2024 would drop to a range of 0.8% to 2.3% the first year of a conversion. Similar impacts would be anticipated in future years.
The operating gain as a public hospital in 2023 was $43 million with a margin of 1.5%.
Another impact from a conversion would be decreased savings from the 340(b) program, a federal program that requires drug manufacturers to provide medications at reduced prices to public hospitals and other qualified entities.
While baseline financials may dip, the system will face more patient demands due to a patient population growth of 23% by 2033.
Hospital admissions will go up 2% while outpatient surgeries would go up 19% and ambulatory surgery care services would go up 167%. The trend is toward more outpatient care, including home based and telemedicine services.
Any option to offset the financial hits?
To help offset some of the supplemental payment hits, Lee Health could qualify for alternative supplemental dollars by gaining a designation as a teaching hospital. That would require investing in five new programs and by having 37 more medical residents.
That could mean more than $28 million in supplemental funding through each Lee Health hospital license that qualifies as a teaching hospital by July 2027.
Lee Health has $770 million in outstanding debt and a conversion would require refinancing the debt through a government insurer or transferring the liability to a successor entity by amending the documents.
With either option, the debt would be issued by a government entity, namely Lee County or the Lee County Industrial Development Authority with the debt proceeds being loaned to the private nonprofit hospital.
What about employees?
In terms of Lee Health’s 15,000 employees, the conversion would have no impact of seniority and there would be no anticipated changes to the current benefits package.
A conversion would require the new nonprofit system to contract with existing vendors to continue the current health care plan offering. In addition retirement plans would have to transition under the new nonprofit system.
When is decision expected?
The Lee Health board has until June 26 to evaluate the findings, weigh community input and vote on whether or not to move forward. A majority vote is required to proceed.
If the decision is to go forward, the board must develop terms of a conversion agreement with the Lee County Commission, which must approve it. That step must be done no later than Oct. 24, 2024.
From there the state must be notified of the transfer of Lee Health’s assets to a new nonprofit entity. The current 10-member Lee Health board would be disbanded but they could serve as the board of the new nonprofit organization.