County likely turning down hospital funding request

By Bob Steenson, bsteenson@charlescitypress.com 

It’s not definite yet, but the Board of Supervisors is likely to turn down a first-ever request for funding from the Floyd County Medical Center.

Representatives of the hospital had asked for $100,000 for the 2018-19 fiscal year that will begin July 1.

The supervisors for several weeks have been going through the next fiscal year budget, looking at county department revenues and expenditures, as well as the requests made by other groups and organizations located in the county.

Almost every county department has requested or projected a spending increase next fiscal year, and the supervisors have most recently been looking for ways to cut expenditures. The majority of county spending is funded by property taxes.

Medical Center Administrator Rod Nordeng and Chief Financial Officer Ron Timpe had attended a supervisors meeting Jan. 22 to make the request for funding for the hospital, pointing to increasing costs and declining net margin.

They also made the point that the Floyd County Medical Center is one of very few county hospitals in the state that had not been receiving county funding.

The state average for county hospitals is $1.35 million per year in county funding, or about $82 per county resident. The average support of county hospitals by those counties closest in size to Floyd County is $1.48 million per year, or about $93 per resident, Timpe said.

The $100,000 requested in Floyd County equals about $6 per county resident, he said.

But supervisors said they were concerned about a hospital balance sheet that showed more than $14 million in an ending fund balance, an amount that had grown in the past six months.

“That’s many times greater than Floyd County’s ending balance,” said Supervisor Mark Kuhn at a meeting this week.

“Based on that — understanding that they provide a worthwhile service to all our residents — I just can’t support a $100,000 appropriation,” he said.

Budget decisions aren’t final until a public hearing is held and the county budget is certified in March, but supervisors seemed to have made up their minds on this issue.

Supervisor Doug Kamm said he understood the hospital’s position, but “it doesn’t look like right now” is the time to begin county funding.

Supervisor Linda Tjaden agreed. Referring to the hospital balance sheet, she said, “Wow, it wasn’t what I was expecting.”

Contacted Wednesday, hospital administrator Nordeng said he had not yet heard about the supervisors’ tentative decision, but he is “certainly disappointed.”

“We are a county medical center,” he said. “It’s fortunate that we haven’t had to ask before for funding for a facility that employs 225 physicians, clinicians and other staff, but there has been so much change at the state and federal level that impacts funding at critical access hospitals.”

Nordeng said, “As far as what we have for reserves, we have to have so many days of cash on hand” to operate.

He also said the medical center needs to save money for future purchases and expenses to keep up with changing medical equipment and services.

“We are funding for future purchases,” he said.

Nordeng said he would have to discuss with medical center administration whether to go back to the supervisors to argue their case.

At the Jan. 22 meeting, Timpe had said that fiscal years 2015 and 2016 showed a net of more than $1 million each year in revenue over expenses, but that the net margin in fiscal year 2017 was less than $5,500.

“Our struggles continue with more and more outside uncontrollable circumstances impacting our operations in a negative way,” according to a letter from the hospital to the supervisors that was presented by Timpe and Nordeng.