The Sedalia City Council heard two financial updates regarding the City of Sedalia and Bothwell Regional Health Center during Monday’s meeting.
Bothwell, one of only four city-chartered hospitals in the state, is the third largest employer in the area with 775 employees. BRHC CEO John Dawes and CFO Jimmy Robertson spoke to council during the pre-council meeting about the financial status of the hospital.
Robertson focused on Fiscal Year 2015’s operating revenue over expenses (based on preliminary audit results), a significant change from Fiscal Year 2014. 2015 is expected to have an excess of roughly $5.1 million, while 2014 had a deficit of slightly more than $6 million.
“We went from a losing position of approximately $6 million to a net income in ‘15 of $5 million. That’s an $11 million turnaround in one year,” Robertson said. “An incredible turnaround. … There’s a lot of reasons why.”
Bothwell has improved its physician documentation, allowing for an additional $1.8 million. Reliance on contract labor has also decreased, replacing most of those staff members with full-time employees, saving the hospital $850,000.
Changing to a group buying network with other rural Missouri hospitals has helped Bothwell reduce costs in supplies, saving $1 million. Bothwell also closed hospice services last year, saving $270,000.
While most of the factors in increased revenue were due to cost savings, a rate increase at Bothwell helped bring in an additional $1.9 million, although Robertson noted it is still a low-cost provider in comparison to other Missouri hospitals.
The hospital also received an additional $1.1 million, thanks to the Affordable Care Act’s health insurance exchange. Of the 589 patients in calendar year 2014 who had coverage through the marketplace, about 260 of them had no coverage previously.
“So, they were still using us before they had insurance, now they’re using us and they have insurance. So they went from being no-pay to paying us a pretty decent rate. $1.1 million effect for those people having insurance,” Robertson said. “So, I will say this, the theory of the Affordable Care Act is pretty valid — we’ve seen it here in our hospital — that they’re replacing self-pay and no-pay population with people that have insurance.”
Bothwell’s no-interest patient loans program, which launched last August, has proven to be successful so far. The hospital partnered with Central Bank of Sedalia to offer no-interest loans to patients to help with the burden of medical bills and high deductibles.
BRHC has 364 loans with a value of $932,550, and so far only 11 loans have “gone bad,” Robertson said, three of which were due to the person dying before paying back the loan.
City Administrator Gary Edwards asked Robertson if this new increase in revenue was helping to keep the hospital properly staffed to meet patient needs.
“We are staffing based on, in our nursing areas based on ratios of patients to nurses which are pretty much industry standards. We make sure that the units are covered,” Robertson replied. “We still have a couple of contract travelers, just because we have some holes. … We have 18 (nurses) in orientation right now. Why is that? We’re working to eliminate that contract labor, but we’ve also had some nurses leave, so we’re back filling those positions.”
Council also heard from the city’s finance director, Kelvin Shaw, who presented his monthly financial update. Sales tax is down for the second month in a row — by 1.8 percent this month — which brings the city to 1.4 percent year-to-day, Shaw said, reminding council the city budgeted for a 4 percent increase this year.
Shaw also spoke about a $1.9 million payment to the Missouri Department of Revenue due to a miscalculation by a local business. A business, which was not named due to confidentiality laws, overpaid sales tax over a three-year period, so now the City of Sedalia, Pettis County and State of Missouri are required to pay back those funds so DOR can refund the business.
The city negotiated a three-year payment plan with DOR to decrease the impact on the city’s budget. Shaw explained to council how it would be reflected in financial reports.
“Since we hadn’t issued our audit statements or financial report yet, we have chosen, and I think appropriately so, to make a prior period adjustment,” he said. “So in essence what we’re going to do is restate the financial statements and the audit report like the over-payment never happened, like it wasn’t ever paid to us because now we know it wasn’t earned. We’re going to reduce the fund balance in previous years and recognize we owe this back now to the state and ultimately to this business that overpaid.”
During the meeting council also:
• Approved proposals and an ordinance approving and accepting an agreement with Louis G. Chiodini Inc. for a space-needs analysis for the Sedalia Police Department with a not-to-exceed fee of $45,700. According to information in the meeting packet, this is part of the ongoing effort to research the need for a larger police station.
• Approved an ordinance amending Section 40-294 of the Code of Ordinances relating to the Firefighters’ Retirement Fund Board of Trustees. This will add the finance director as a member of the board.
• Approved an ordinance granting a rezoning application by Connie L. Koering, trustee of the Janice Collins Living Trust, for property located at 704 S. Montgomery Ave. If approved, this will change from R-1 single family residential to C-3 commercial district. The Planning and Zoning Commission unanimously approved this request.
• Approved bids for the demolition of structures located at 916 W. Sixth St. (B&P Excavating, $8,000) and 403 W. Fifth St. (Schultz Wrecking, $8,000).
• Approved a resolution authorizing a change in the September 2015 second regular meeting date of the Sedalia City Council from Sept. 21 to Sept. 28 due to the annual Missouri Municipal League Conference.
• Approved a resolution amending the municipal fine and bond chart for the Sedalia Municipal Court.
• Approved an ordinance amending Section 36-22 of the Code of Ordinances relating to a person failing to appear in municipal court.
• Approved an ordinance imposing a use tax at the rate of 2.375 percent to the authority granted by and subject to provisions of RSMO Sections 144.600 through 144.761; providing for a use tax to be reduced or raised in the same amount as the city sales tax is reduced or raised.
• Approved an ordinance to continue the application and collection of the local sales tax on the titling of motor vehicles, trailers, boats and outboard motors that were purchased from a source other than a licensed Missouri dealer.
• Approved a records destruction request from the Personnel Department.
All council members were present.
Nicole Cooke can be reached at 660-826-1000 ext. 1482 or @NicoleRCooke.