Submitted by Ann Ness, League Observer
Chair Steve Delzer called the meeting to order. The first item on the Revised Agenda was to approve the minutes of 11-17-05. This passed. Next was approval of the 2006 Operating Budget. The budget for net revenues projected for 2005 was $39,793,751.00 and for 2006 is $47,931,894.00. Total expenses for 2005 are $10,037,703.00 over the 2005 budget. Salaries increased by an average of 4.02%. There was an increase of 50.79 FTE’s. The additional FTE’s are due to volume increases in the addition of the Women’s Health Clinic at the Hospital and the Lonsdale Clinic.
Major increases in expenses for 2006 include:
Benefits $901,396.00
PERA 5.5% to 6%
Medical fees $2,318,998.00 (new clinics in place)
Food $26,665.00
Drugs $524,997.00
Supplies $1,155,307.00 (50% due to increase in volume)
Utilities $215,439.00
Repairs $88,382.00 (new equipment to be purchased)
Insurance $288,676.00 (professional fees are going down 1/3)
Depreciation $694,652.00
Purchased services $118,270.00 (laundry fees going up)
Other $118,270.00 (increase in clinic expense)
Taxes $114,385.00 (MN Care tax on additional revenue is 2% of cash receipts, and property tax on clinics)
Bad debt $9,415.00
MN surcharge $29,159.00 (due to increased volumes)
Decreases on interest on debt and telephone charges.
Total deductions over 2005 budget: $11,572,278.00.
Ken Bank said there were significant costs in getting the clinics underway, but there would be a positive result in years to come. The budget for 2006 is based on uncertain assumptions at this point. He emphasized the economic development benefit of creating 51 new jobs. There are about 400 FTE’s for next year with about $20 million in salaries.
The 2006 Capital Budget was approved. Some of the largest expenses include a video camera for the operating room for $96,000.00. To increase on-site parking will cost $125,000.00. The new Meditech program will cost $451,790.00. The expanded computer room will cost $340,000.00. Any amount over $50,000 must go to the Board for approval. The total Capital Budget for 2006 for the Hospital is $2,208,357.00 and for the Clinics is $9,665,000.00.
The CPA firm of LarsonAllen has agreed to audit the financial statements of the Hospital and Clinics for $20,000, a 7% increase due to the additional work with the Lonsdale Clinic. The audit proposal passed.
Three Board officer positions are up for renewal, including the Chair, Vice-Chair, and Treasurer and it was proposed that the Board members now in those positions be offered as the slate of candidates to be voted on at the next Board meeting. This was unanimously approved.
A proposal for a new ultrasound system was presented due to the growth of the Women’s Health Clinic. The older unit cannot handle the current traffic. Bids have been asked for for next week. Ken Bank checked with Marin Swanson (City Attorney) and the contract can be awarded next week as long as it doesn’t exceed $300,000.00. One bid from Phillips is in, but bids from Toshiba and GE are expected. The lowest bid which meets the bid specifications will be accepted as long as it doesn’t exceed $300,000.00. This proposal passed.
The approval of Depositories and Safe Keeping Entities with the Community National Bank passed.
Donations based on a target of 2-3% of the net operating income are to be considered by the Budget & Finance Committee. Ken Bank said they must take action in the 2005 year. The amount to try to maintain would be $50,000 as they did last year. One of the Board members asked how donations are determined and Ken Bank said that historically donations are given to the United Way, the Community Action Center, the Health Community Initiative, and youth groups. The Board approved having the Budget & Finance Committee decide on the donation amount and which groups it would go to.
Applications for Medical Staff Membership/Privileges were approved. There had been no meeting by the Medical Executive Committee, but they approved by email, and the Board also approved.
David Oliver gave a regional clinics update. The Women’s Health Clinic had been averaging 200-250 clinic visits, but is now up to 400-410 per month. The Orthopedic Clinic was averaging 600 visits per month. The general surgery is still new. The Lonsdale Clinic has been in business 33 days and by 12-21-05 had 441 patient visits. There are 6 exam rooms which are expandable to 18. Some of the patients came from outside of Lonsdale (the greater Lonsdale region). 20 patients were sent to the Hospital for in-patient care. Several patients have mentioned to Dr. Glover that they are pleased to have a pharmacy across the street so he can call the prescriptions over.
Meetings are being scheduled to pursue having a Farmington Clinic. There will be 24 exam rooms and an increase of 5000 sq. ft. over the Lonsdale Clinic. Since they are taking the Lonsdale footprint of a clinic, they are happy to be able to ask the people working there if there is anything they would change.
The HealthFinders Collaborative Update gives statistics on their services through the end of October for 218 patients. The total cost to the Hospital has been $3200.00 to date.
Ken Bank reported on the Emergency Dept. physician staffing. They have come to an agreement on work scheduling. 10 shifts a month will be Full Time, in addition to any holidays or vacation days. They need the equivalent of 6 FTE’s. 3 physicians will remain. Dr. Lum will drop to half time. 5 will be half-time which gives more flexibility. Some will continue moonlighting. Most of the ED doctors have extensive family practice backgrounds. Ken Bank said, “We’re as stable as we’ve ever been.” Mary Crow said that 85% of Hospital Admissions come through the Emergency Department.
Roger Stapek gave the Administrative Report. He said that the Hospital made a $15,000 profit last month. He said they were at the beginning stages of absorbing start-up costs. He is budgeting for $100,000.00 in losses each month next year. Admissions are higher than budgeted. He expects to end 2005 fairly close to the budget.
The Hospital is having 4 houses and 3 lots appraised from the old hospital site according to City Council rules. The two houses that are rentals will give first choice to the renters to buy based on the appraised value. The Hospital is keeping the ambulance quarters and the home care quarters which are still being used. They need some attention to repairs.
Ken Bank said that with the addition of a 9th member on the Board that the Board Room would no longer be big enough for the monthly dinner which precedes the Board meeting. Members will have to let the Hospital know if they are coming for dinner so they will know which room to set up