New River Medical Center’s books closed out by hospital board

Even though the Monticello-Big Lake Community Hospital District is no longer the lead entity responsible for the operation of a local health care system, its board of directors remains landlord for the hospital facilities that a larger organization (CentraCare) now operates under a lease and affiliation agreement.
Two responsibilities outlined in that agreement, which became effective April 1, involve approval of new district board bylaws and a reduced meeting schedule.
District board members approved both of those agenda items during a 22-minute meeting Thursday, June 13. The board also accepted a six-month report that closed the books New River Medical Center as a financial entity.
CentraCare Health-Monticello is still governed by an eight-member board of directors  On April 1, New River officially joined St. Cloud-based CentraCare and became CentraCare Health-Monticello after a long-discussed and affiliation process.
Next April, CentraCare’s annual report will include an update on the return of an obstetrics and birthing center to Monticello, confirmation of bond payments, tax-exempt leases and insurance coverage as well as submittal of the hospital district’s annual budget approval for inclusion in the CentraCare-Monticello operating budget.
The April 2014 report also will include an update on capital designated for an observation unit and the expansion of emergency room facilities and services.
This October, the hospital district board will receive a review of an updated 10-year capital plan provided by CentraCare and a schedule for facility maintenance.
Other district responsibilities included in the lease and affiliation approved earlier this year include a tracking process for potential facility purchase dates.
Starting Dec. 1, 2016, if CentraCare Health makes a $2 million payment to a community non-profit, it can exercise a purchase option to buy the medical center.
Four years later on the same date, the hospital district can transfer ownership of any leased assets to CentraCare if the purchase option hasn’t been exercised. “These will be pretty comprehensive meetings, because we will be covering a lot of ground. It’s going to be a full evening [Oct. 10]. If more meetings are needed, we would call them.” said Chairman Sheldon Johnson, referring to the Monticello-Big Lake Community Hospital District approval of Oct. 10 and April 10, 2014 meeting dates.
Nancy Friesen, chief financial officer, summarized the final New River Medical Center report presented to the board last Thursday.
“Our final report dated March 31 was the end of New River Medical Center as we know it,” Friesen said. “You finished the six months of fiscal year 2013, with an operating loss of only $124,000. The budgeted loss was $3.2 million.”
According to Friesen, once joint ventures and other district financial activity were tallied, New River ended with a gain of $260,000.
“We went out on a very high [financial] note for the operation of this organization. We are almost $2.5 million under budget for that same time period.”
Friesen said expense control was a key reason for her positive report. She added the Monticello-Big Lake Community Hospital District also met its debt service coverage.
“This is kind of a watershed meeting. We ended on a high note,” Johnson concluded.
Boardmember Richard Helms quipped: “And it only took 22 minutes.”

Contact Managing Editor Tim Hennagir at tim.hennagir@ecm-inc.com

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