Powell Hospital District has more money on hand at the start of the coming fiscal year than it did a year ago.
According to its fiscal year 2018 budget, the district had $2,055,830 in cash as of last week — $467,395 more than the $1,588,435 it had at this time last year.
Powell Valley Healthcare interim chief financial officer Stephen Miller said last year’s budget set aside nearly $520,000 for capital projects, but most of that was not spent.
“Additionally, there were operating funds that remain unspent as well. Together these are the funds carried over to FY2018,” Miller said in an email.
That’s a good thing, because the budget estimates the hospital district will receive only $202,500 in rental income from Powell Valley Healthcare during FY2018, which began July 1. That is a steep decline from the $810,000 that PVHC paid last year to rent the hospital and other medical buildings on the medical complex from the taxpayer-owned district.
Pending approval of Powell Valley Healthcare’s reorganization plan for Chapter 11 bankruptcy, the district will waive rent payments for Powell Valley Healthcare for one year.
Powell Valley Healthcare went into Chapter 11 bankruptcy in May 2016 to get help with more than 20 lawsuits alleging Dr. Jeffrey Hansen, an orthopedic surgeon, performed bad surgeries years ago.
In addition to waiving rent for one year, the reorganization plan calls for the district to reimburse PVHC for $250,000 of the rent it paid last year, and to reduce the organization’s rent for another seven years.
The rent waiver, reimbursement and reductions are designed to help PVHC make $3 million in payments over eight years to a proposed personal injury trust made up of former patients of Dr. Hansen who sued the organization. Terry Odom, PVHC chief executive officer, has said the organization could not meet that $3 million obligation without the district’s help.
If approval of the reorganization plan is delayed, or if it is changed, the rental and reimbursement amounts in the budget will be adjusted accordingly, Miller said.
Miller, who has been PVHC’s interim CFO for only a couple of months, praised PVHC Controller Joy Colston, who helped with the budget. He said she made the budgeting process much easier than it would have been in an office “where there is no Joy.”
The district’s board consists of seven elected trustees, all of whom also serve on the Powell Valley Healthcare Board of Directors, along with three PVHC doctors.
R.J. Kost, president of the Powell Valley Healthcare board and a trustee on the Powell Hospital District board, said the district is waiving rent to help PVHC meet its $3 million obligation under the proposed reorganization plan.
“Basically, the bottom line is, the district wanted to find a way to assist so we could guarantee that our hospital is within the community … without it becoming a skeleton,” Kost said earlier.
He said the settlement and reduced rent will not put the district in jeopardy, and the district will be able to keep up with maintenance of the facilities.
The district budget sets aside $316,517 for capital outlay for equipment repair or replacement and building maintenance.
All the expenses in the FY 2018 budget total $1,267,272.
That’s expected to be offset in part by $509,841 in property taxes (collected through a 3 mill levy on local property owners). That’s about $30,600 — or 6 percent — less than the district was able to collect in property taxes a year ago.
In addition to the taxes, the district expects to receive the $202,500 in rent from PVHC, $118,000 of motor vehicle and delinquent fees and $3,500 in interest.
The full FY 2018 budget for Powell Hospital District can be viewed on Page 14 in today’s edition of the Powell Tribune.
Capital projects included in the Powell Hospital District’s budget for the 2018 fiscal year are: