Mosaic Life Care will be taking various buildings off of the tax roll through Fiscal Year 2020. The move comes after two medical office buildings, which had historically been leased, were purchased by the hospital.

Mosaic Life Care will reduce by more than half a million dollars the taxes it is paying on some of its buildings going into the fiscal year beginning July 1.

The not-for-profit hospital is not required to pay taxes on certain buildings that it owns, but it has done so in the past, resulting in approximately $559,171 in revenue to local taxing districts per calendar year, according to December 2018 assessed value numbers.

“With the changing health-care climate, Mosaic made the decision to invest these funds in expansion and upgrades to our main hospital campus and our rural hospitals and clinics,” Chief Financial Officer Dwain Stilson said in an email. “These improvements will serve our communities for years to come, while we continue to invest in educational and wellness programs designed to improve the health status of our residents.

This was an opportunity to be more thoughtful with our money and how we can invest in our main medical campus, regional hospitals and clinics and community, and wasn’t necessarily a cost-savings decision.”

Mosaic plans to remove two buildings from the tax rolls in 2019, resulting in a reduction of $146,034 in taxes. According to a FitchRatings report, Mosaic is in the process of purchasing two medical office buildings on its main campus that historically have been leased by the hospital. This purchase would eliminate approximately $3.1 million in annual operating lease expenses, according to the report.

“With our purchase of Plaza 1 and Plaza 2 on our main medical campus, we wanted to ensure our campus was locally owned and operated,” Stilson said. “This offers stability and gives us the opportunity to expand to meet the health-care needs of our community.”

However, in Fiscal Year 2020, more Mosaic buildings are planned to be removed from the tax roll, resulting in $525,924 in overall tax reductions. Revised estimated savings would have Mosaic paying just $33,247 in taxes on its buildings per calendar year, down from the original $559,171.

Stilson also said that Mosaic is finalizing plans for the expansion and renovation of certain clinical areas on the main medical campus and will share more details once they are finalized.

Representatives from Mosaic also reached out to the St. Joseph School District, informing the superintendent and director of finance of the adverse financial consequences of such a move.

“From what I understand, they’re going to take a few buildings off (the tax roll) for this coming year, and for us that’s about $145,000, which is a substantial amount of money for our own personal checkbooks,” Superintendent Dr. Doug Van Zyl said. “For us as a district with a $120-plus million budget, it will have a minor impact, and it is a reassessment year, so other properties may get re-evaluated, and it may help eliminate some of that loss. The following year, when they take a few more buildings off, you’re talking over half a million dollars, so that may be a bit more substantial. But it also depends on how we can partner with them and the dollars that they may turn around with and support us with in other ways.”

The St. Joseph School District’s Director of Finance Gabe Edgar said that while they’ll have to plan effectively as a result of the decision, he appreciated representatives from Mosaic coming forward and working with them from a budgeting standpoint.

Both Edgar and Van Zyl said they look forward to the continuing partnership between Mosaic and the district.

Stilson said Mosaic is honored to support efforts by the SJSD that allow both entities to work side by side with the community.

“Programs such as the 4th Grade Challenge, funding an anti-bullying campaign, providing mental-health-awareness programs and financing clinical nursing support are just a few examples of how Mosaic works side-by-side with the school district,” Stilson said. “Through innovative programs such as the Community Clinic at Carden Park Elementary School, Mosaic constantly looks for ways to increase access to health care for our residents. We look forward to working with the district as we strive to meet the needs of our community.”

Daniel Cobb can be reached

at daniel.cobb@newspressnow.com.

Follow him on Twitter: @NPNowCobb.