Public Hospital District No. 1, which owns Valley Medical Center, is losing about $3.3 million in property-tax revenue this year that pays off bonds sold to build such campus buildings as the new trauma center.

The hospital district will use patient revenues generated at the medical center to backfill those dollars, said Jeannine Grinnell, the hospital district’s interim superintendent.

“The district will pay its outstanding bond debt this year with the pledged tax revenue, and the shortfall will be made up with patient revenue,” said Grinnell.

Most of the property taxes the hospital district receives goes to pay off its bond debt, while a variety of funding sources pay for medical services, including patient payments, insurance and other sources.

The hospital district had expected to collect about $20.1 million in property taxes in 2012; that figure is now $16.8 million. The day-to-day operations of Valley Medical Center are overseen by a 13-member Board of Trustees, which also approves its operating budget. The board includes the five elected commissioners of the hospital district, who oversee the district’s tax dollars.

The declining tax collections also will mean fewer tax dollars for fire districts, including Fire District 40, which share some tax revenues with the hospital district.

The loss for the hospital district and other taxing districts in the county comes at a time when the property tax limit was exceeded in several areas of King County, based on levy code, for the first time since 1997, according to the King County Assessor’s Office.

That combined limit is $5.90 per $1,000 of assessed valuation. To help keep that combined limit below $5.90, the assessor’s office recalculated levy rates. The hospital district’s levy rate was dropped from 59 cents to 50 cents per $1,000 of assessed valuation, resulting in the $3.3 million loss in its tax levy.

The loss “was due to a variety of factors, but primarily as a result of decreases in the final assessed valuation of property within the district, combined with the taxes officially levied by other taxing authorities within our district,” Grinnell said.

John Arthur Wilson, the county’s deputy assessor, said that even though the hospital district only hit the $5.90 limit in some levy codes, the assessor is required to reduce the rate for everyone in the district.

Wilson said the hospital district tends to be “fairly aggressive” in taking its entire levy capacity.

“That’s perfectly legal,” he said. “The problem is that in this type of economic situation, it’s come back to bite them.”

He likened the hospital district’s situation to when the credit limit is reached on a credit card.

It’s the same analogy that Dr. Paul Joos, the newly elected hospital district commissioner, used in discussing the hospital’s debt service at the Feb. 6 meeting.

There was a discussion about early repayment of hospital district debt. “The thing that strikes me is like a family that has maxed out their credit cards,” said Joos, who is the commission’s president. “We need in the future to look forward to have some reserved borrowing ability instead of spending everything we can borrow.”

He suggested the district have some borrowing ability in reserve to weather emergencies.

Commissioner Anthony Hemstad said it seemed “stunning that somehow this wasn’t foreseen.” There had been discussions in 2010, but it didn’t seem likely then that such a loss would occur, Grinnell said.

It’s “possible, if not probable” that something similar would happen in 2013 and 2014, Grinnell told the board. In the meantime the district should look at specific levy codes and what junior tax districts have a say in how those taxes are spent, she said.