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By Dan Rudy 

Assembly approves hospital reserve fund

 


Meeting in a special session Aug. 12, a full City and Borough Assembly unanimously approved setting aside $500,000 in funds for the Wrangell Medical Center.

Interim CEO Marla Sanger approached the Assembly last month seeking permission to obtain a line of credit for that amount from a bank. While appreciative of the hospital’s concerns, Assembly members had not favored the idea of approving such a line through a private bank due to concerns about interest and accountability. Instead, they offered to provide a reserve from money in the General Fund.

At the time of Sanger’s initial request, hospital administrative staff had been concerned about WMC’s finances after learning $480,000 would have to be repaid to Medicare, following desk reports for its 2013-15 fiscal years. Coming back to the Assembly last week, Sanger said the financial situation at the hospital had since improved.

“We’re doing better than we projected the last time I talked to you,” she said. Volumes at the hospital remained high through June and July, and Sanger reported the transition of billing services management to TruBridge that began on Aug. 2 was going well. A contract with the company was approved in July, paying it two percent of all billable services it processed on behalf of WMC with the expectation of improving the hospital’s cash flow.

Going into specifics, hospital CFO Doran Hammett explained the Medicare debt was repaid in half the time he initially anticipated, and there was $489,000 on hand by the end of July. However, he added the line of credit was still desirable.

“I think this needs to be in place just to give us that little comfort zone,” Hammett said.

Under the arrangement, the borough manager and hospital CEO would both have to approve monies withdrawn from the account. WMC would have to repay borrowed funds within a year of being withdrawn, and the city could decide to end the agreement if it felt terms were not being honored.

“I’m in favor of this,” Assembly member Julie Decker said of the request. In lending that support, she added she would like to see that the account be reviewed by the Assembly on an annual basis in addition to regular monthly reporting.

Assembly member Dave Powell wondered whether it would be best to wait until a new CEO has been chosen at the hospital before approving the reserve account. Sanger will be leaving WMC at the end of October, and the hospital will be hosting three top candidates for her replacement this week.

“I have a hard time voting for this without input,” Powell said, asking Sanger when the hospital would have her successor lined up.

“We might extend an offer but we don’t know if they’ll take it right away,” she responded. Uncertain when a replacement could be confirmed and whether the hospital might need emergency funds, Sanger said she would prefer to set up the fund as soon as possible.

“The purpose is to allow some nimbleness and even out our cashflows, but the intent is not to use it,” she said.

After conferring, the request unanimously approved by the Assembly, with an amendment to allow the body to reapprove the line on an annual basis. The fund can be used to balance cash flow when unexpected or large expenditures come up but not for non-essential allocations such as for new construction.

Touching on TruBridge, during the discussion Powell mentioned he has heard some complaints from other residents about the transition, and he said he had himself experienced being redirected to the Alabama-based service for billing information.

“The hospital should be taking care of that billing,” he commented.

Hammett replied that nobody at the hospital has been instructed to redirect billing inquiries to TruBridge, and that Wrangell staff were able to pull up all billing information in real time. He told Powell he would go and personally make sure staff were aware of this.

Sanger also pointed out it was only the second week of the rollout and that there were still things to learn about the new system.

In other business, the Assembly approved a non-code ordinance allowing property taxes this year to be paid in two installments, by Aug. 15 and Dec. 15. This was adopted to help residents transition to the single-date Sept. 15 deadline adopted in May, which will now take effect beginning in 2016.

Powell pointed out there was still some confusion about the new due date and whether the entire sum owed for property taxes had to be paid specifically on the due date.

“I’ve had quite a few people call me,” he recounted. “I want to put on record this is a due date. They can pay this any time before.”

Borough Manager Jeff Jabusch explained that residents and property owners can make payments as it suits them, provided the full amount is received by the city by Sept. 15. Late fees of 10 percent annual interest will be incurred after that date.

The Assembly also approved an amendment for a design contract with DOWL Engineering of Juneau for the city’s ongoing sewer pump replacement project. The $22,703 were for additional services and rural utility funding assistance.

 

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