County Greenlights Central Health Funding Strategy for Critical Capital Projects

AUSTIN, Texas — On Tuesday, the Travis County Commissioners Court unanimously approved Central Health’s request for a Notice of Intent (NOI) to issue up to $290 million in Certificates of Obligation (COs).

This funding will back critical capital investments that support Travis County’s safety-net health care system while preserving cash reserves and maintaining flexibility for potential future programs in collaboration with community partners.

The Central Health Board of Managers unanimously approved the NOI on July 22.

“This action allows us to responsibly plan for urgent infrastructure needs without depleting reserves or compromising our ability to respond to other emerging needs,” said Ann Kitchen, Central Health Board of Managers chair. “Central Health must plan for an uncertain future while protecting our ability to serve today—making sure we can act when our community needs us most.”

Strategic Investments to Expand Care Access

The proposed debt issuance will fund key capital priorities for Travis County’s hospital district in Central, East and North Travis County to better serve people with low income. These include purchasing facilities for primary care, specialty care, pediatric care, and other clinical support functions.

The funding would also support improvements to Central Health’s delivery of medication to patients, investing in equipment to strengthen Central Health’s 340B pharmacy program. This is a federal program that requires pharmaceutical manufacturers sell outpatient drugs at significantly reduced prices to certain organizations like Central Health and CommUnityCare that serve low-income, uninsured, and vulnerable populations.

“Issuing Certificates of Obligation allows us to invest in essential, long-term infrastructure facilities without draining cash reserves for capital projects that would weaken our long-term financial position, limit flexibility, and jeopardize future services. Debt lets us spread costs over time, align payments with the life of the asset, and keep services stable without triggering steep tax increases,” said Jeff Knodel, Central Health chief financial officer. “Central Health can save money long-term by owning property versus leasing, offering exceptional value for taxpayers while meeting the service levels required to keep our patients healthy,” Knodel added.

Planning for the Future

The $290 million proposed debt would increase the property tax rate by about half a cent for Travis County residents and is well below Central Health’s maximum tax rate. Importantly, the action does not bind Central Health to issue debt but preserves the option.

Timeline and Next Steps

Following the county’s approval on Tuesday, a 45-day public notice period begins. The Central Health Board will make a final decision on approving a debt issue in mid-September.

“This is about planning smart, acting responsibly, and preserving options for our community,” Kitchen said. “We’re building a stronger, more resilient safety-net system for everyone in Travis County.”