Hospital board approves mill levy increase
Citing a need for operating reserves, Marion County Hospital District No. 1 board on Thursday unanimously approved an increase in the mill levy starting next year.
The levy will rise from 3.7 to nine mills.
Officials said it was needed to accumulate operating funds should St. Luke Hospital become completely independent.
Currently, Banner Health System provides operating funds for the facility. The district handles building improvements and some equipment.
Banner has indicated it does not plan to renew its management contract with St. Luke when it expires Dec. 31, 2004.
When Banner goes, the accounts that pay salaries, electricity, and other expenses go, too.
And Banner still has a claim on insurance payments and other reimbursements for procedures and treatments at the hospital before the contract ends.
$1.5 million needed
Board Chairman Gene Winkler said the district would need about $1.5 million to cover 90 days of operations. It will take that long before insurance payments switch from Banner to the district.
"It came to, at the end of 2004, what were we going to do for a hospital?" Winkler said.
To increase financial flexibility, the board approved an early payment on its outstanding debt of $320,000. The June 2003 payment of $100,000 will be made in December of this year. Two additional payments in 2004 and 2005 may be moved up as well, so the facility is debt-free by 2005.
The facility also will switch to critical access designation by the end of this year, which provides higher reimbursement rates to qualifying rural facilities.
Patron Edmund Steiner was present to ask questions of the board.
In particular, he recalled statements by board attorneys when the hospital was built. At the time, the plan was that the facility would never budget more than two mills from the district.
Board members said the district has been at four mills for many years. State law generally prohibits elected boards from permanently restricting or committing future boards in fiscal matters. The state did at one time limit hospital districts to four mills, but removed that limit.
Member Greg Bowers noted that if the district remains independent, it always will need at least $1.5 million in operating reserves (adjusting upward for inflation). However, as other payments come in, the mill levy eventually could be reduced by future boards.
"But I know there's nothing so permanent as a temporary tax," he added.
Winkler noted that the board continues to seek another management company to replace Banner. If an agreement is reached, that company will likely have its own reserves. But the district has to plan financially as if that won't happen, he said.
Member Kevin Fruechting said news reports of struggling facilities in other rural areas show what happens when hospitals don't plan for the future.
"You see communities rallying, in desperation, to find ways to save their hospital, and we don't want to see that here," he said.
Steiner said he appreciated the board's dedication and knew they were in a difficult position. He helped organize the original district, and ran into opposition then, he said.
"We're thankful for what you did, that we've had this hospital all those years, and there is still a need," board member Peggy Blackman said.
In other reports:
The number of outpatient procedures continues to increase. Mammography services in particular have grown after an urban facility cut its mobile mammography services to rural areas with little notice.
"We hear from doctors who just assumed we used a mobile service, too," said Doug Newman, administrator.
The board agreed to seek cost estimates for a covered awning between the clinic and hospital. A family wants to contribute memorial funds toward the project.
Purchase of a rolling stand and heating blanket for the operating room was approved. These blankets are used to keep patients warm following operations. Cost is $1,370, paid out of memorial funds.
St. Luke is part of a grant project through Via Christi that seeks to identify and reduce problems that keep the elderly from receiving adequate medical care, Newman said.
Swindoll, Janzen, Hawk, and Loyd accounting firm was hired to conduct annual audits of the district's books. The three-year contract will be re-negotiated if the district becomes sole operator of the facility.
