LUTHERAN QUILTERS – Members of the Quilts for Comfort Group stand between pews draped with some of the 205 quilts they made, in the Sitka Lutheran Church Tuesday. The group made the quilts for five local non-profits and one in Anchorage. The remaining quilts are sent to Lutheran World Relief which distributes them to places around the world in need, such as Ukraine, as part of Personal Care Kits. Pictured are, from left, Helen Cunningham, Kathleen Brandt,Vicki Swanson, Paulla Hardy, Kim Hunter, Linda Swanson and Sue Fleming. (Sentinel Photo by James Poulson)
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Daily Sitka Sentinel
Budget Shows Hospital Paying Down Debts
By SHANNON HAUGLAND
Sentinel Staff Writer
Sitka Community Hospital hopes to pay back $400,000 of its loan from the city and finish the coming fiscal year in the black, the Assembly was told Thursday.
At the end of a one-hour special meeting, the Assembly voted 5-0 to approve a $25.5 million hospital budget for the year starting July 1.
Hospital officials spoke of their plans for higher revenues by filling medical provider vacancies and making more use of their long-term care beds.
Hospital CEO Rob Allen said today he was pleased the Assembly approved the budget without objection.
“I was happy with the questions, and happy that we ended up with full support from the Assembly,” Allen said.
The hospital is coming off a few years of heavy losses, including one of $2.4 million in fiscal year 2014.
The hospital received a bailout in the form of a $1 million loan from the city in late 2014, and that was on top of an earlier $500,000 line of credit. The hospital began paying back the money last fall by way of a $100,000 payment.
Allen hopes the hospital can finish the current fiscal year with the $500,000 loss shown in the budget. As late as March it appeared the 2016 losses might be as high as $1 million, but projections have improved in the last month.
That’s a step forward to the hospital’s fiscal goals, he said.
“We’ve set the stage for more than breaking even ... and building reserves,” he said. “That’s the direction we’re taking.”
The 2017 budget approved by the Assembly Thursday has the hospital finally getting into the black with a balance of $3,245.
It’s been an wild spring for the hospital, beginning with a tough March, at which point officials expected the losses could be double what they expected for this fiscal year. Allen said April was better than expected and the hospital “picked up quite a bit of business” in May. The hospital is working on ways to generate revenue through building the outpatient business, which comprises 67 percent of the hospital’s revenues, and at the same time controlling expenses, he said.
CFO Cynthia Brandt said about half of the hospital’s revenue comes through Medicaid and Medicare; about 22 percent is from Blue Cross; 21 percent from other insurance; and 3 percent of the income is from self-pay.
Allen said today the self-pay figure dropped from 6 percent the year before, which he attributed in part to the expansion of Medicaid under the Affordable Care Act. The federal health care legislation is also credited with the decline in the expense to cover bad debt and charity care.
Allen and Brandt told the Assembly thst filling the vacant long-term care beds would make a difference in the bottom line. SCH is reaching out to facilities around the state to let them know that there are beds available in Sitka, and hopes to be able to respond quickly if a patient needs a bed.
“It’s quite a process,” Allen commented.
Employee expenses are up by $600,000 for next year, more than half of which is from health insurance increases. Allen said the hospital is working with the city and school district, and the insurance provider for employees, to look at options for self-insurance to cut down on expenses in the future. The rest of the increase is related to correcting wage inequities.
Asked by the Assembly to comment on his concerns related to the hospital’s budget, city Finance Director Jay Sweeney said his concerns are for the long-term.
“Ultimately there’s eventually going to come a time when there’s going to be a capital need,” he said. “And the city will be called on to assist.”
He said he would like to see the hospital start building working capital to prepare for capital needs in the future.
Allen said today that he would like to see that too.
After the hospital budget was approved by the Assembly, Sweeney talked about the memo he wrote on how the city plans to make up a $110,844 shortfall in its own budget, and identify $200,000 in wage and benefit reductions, for the fiscal year 2017 city budget.
He wrote that the sales tax revenues are expected to be higher than originally projected, now that cruise ships are docking at the Old Sitka facility.
“This means more visitors will be visiting downtown and those visitors coming downtown will stay longer,” he said. ”This in turn translates into increased retail commerce and greater sales tax revenues.”
The $200,000 savings in wage and benefit costs will be made by not filling a police officer position and correcting a budgeting oversight that will return $40,000 to the city. The final $56,818 will be through a reduction in workforce, but “the details have not yet been finalized.”
“Accordingly, as the municipality employs position budgeting until a specific FTE (full-time equivalency) is identified for elimination, the administrative commitment to reduce an additional FTE before the end of FY2017 has been honored in this way,” Sweeney said.
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20 YEARS AGO
March 2004
Advertisement: Tea-Licious Tea House & Bakery 315 Lincoln Street Grand Opening! Freshly Baked Scones, Cakes & Pastries Innovative Salads, Soups & Sandwiches Harney & Sons Tea. Lunch * Afternoon Tea * Supper.
50 YEARS AGO
March 1974
Photo caption: National Republican Chairman George Bush takes a drink of water offered by Jan Craddick, Sitka delegate, during the Republican convention held here. Mrs. Craddick explained to Bush that the water was from Indian River, which means, according to local legend, that he will return.