Petersburg Borough: Petersburg Medical Center Hospital Board Meeting June 2026

Can you hear us?

Yeah, Jared, I hear you fine.

Go ahead and call a meeting to order.

Um, Roll call.

Marlene. Here. Joe. Here. Jim.

Here.

Joni.

Absent. Cindy. Here. Heather. Absent.

And myself, Jared, is here. I missing anyone? Um, do I have approval of the agenda for June 25, 2026 Hospital Board meeting agenda?

Um, with the exception of I would like to add a report For the Foundation meeting report, so it would be as amended. I move we approve the agenda with the addition of the, uh, PMC Foundation report. I will second it.

All in favor? Aye. Aye. Aye. Aye.

Okay, and before we proceed, do any board members have a conflict of interest or a potential conflict of interest with respect to any item on today's agenda that should be disclosed?

Okay, thank you.

Um, approval of board minutes for May 28th, 2026.

Uh, I would make a motion that we approve, uh, the board meeting minutes from May 28th, 2026. I'll second that. All in favor? Aye. Aye.

Do I have any visitors' comments? Yes, I have. Yeah, Jarrod, I would just like to say hello. This is Roy Roundtree with Pettisworth North. We are still happy to be helping you guys with the long-term care.

Design, and I think Justin has that wrapped up in the report. I just wanted to say hello and point out we have Kate Incarnato, the project manager, on today, and we're just here to keep tabs, listen in, and answer any questions you might have on anything we can answer. So thank you very much. Thank you, Roy.

Sir, please state your name for the record, if you would. Hi, my name is Tom Kowalski, and, um, I have just a couple things I wanted to ask. Uh, one thing was I've been asked some questions from other members of the public about, uh, the new MRI machine and whether or not RF, radio frequency, emissions affects the results from that machine. And now I know from my past construction experience in building MRI rooms, we've always used lead in the walls behind the drywall, and I guess now they use copper and galvanized steel. So I know you guys have— the builders and such have mechanisms and rules and stuff to follow, and I just wanted to follow up and address those concerns, whether or not that's the case with the MRI machine room that we have now.

And the other question I have, part comment, part question, is the— there's a study that was released and it studied the cancer rates in communities in Alaska, and Petersburg was the 6th highest of 46 communities. That, that number may not be accurate, but it's, it's, it's close to it. I was curious if the hospital board or any members of the hospital have seen this article maybe in the past and looked at the data.. And, uh, maybe you could find whether or not there is a, an outlying smoking gun per se that, that may be a reason for such a high cancer rate. I do understand that, that we're not alone.

Wrangell was higher than us. I think they were 5. Ketchikan, I believe, was 4. And this is a 2023 study. There might be a newer one, but that's, that's the one I just looked at not too long ago.

But anyway, I was just wondering if you guys had looked at that information in the past, or if this is the first time you're hearing about it. There are quite a few folks that I've talked to, at least a dozen in the last couple of months, that were curious about that and whether or not Um, you guys could look into it or have already looked into it. If you could maybe ease the concerns or, um, identify some areas where, uh, we could make some corrections and improvements. But, uh, that's really all I have. Okay, thank you for your concerns, and we'll do what we can to, uh, address them.

Okay, thank you.

Any other visitors' comments?

Yes. Jennifer Bryner. I do work at PMC, but I just wanted to say, I, my mom had a fall 2 weeks ago almost, and anyway, and ended up having to come in and spend the night at the hospital, and I just was wanted to say how thankful me and my family are for the care that she received, both from, you know, from the nurses to the radiology tech to the doctor. Um, she felt very comfortable, and I felt very comfortable going home and leaving her there and spending the night at my house. And so, um, anyway, it just makes me realize when we visit as a family or a patient, you know, it just reinforces how important that I feel like the hospital is, and we're so thankful for the staff, the medical staff, the nursing staff, and all the ancillary, ancillary staff that we have.

And we're really lucky to have such a great facility and great people. So thank you. Thank you for those comments.

Any other visitor comments?

Any board member comments?

Committee reports. Resource Committee. We are seeing a seasonal bump in numbers in clinic visits, rehab services, and home health visits, as well as emergency room numbers. Long-term care numbers declined over the past year, but we do have some approvals and reapprovals for patients, so census is increasing. For revenues and expenses, we're still waiting on past year Medicare reimbursements, and the work building will affect Medicare rebates as we will now be accounting for facility depreciation.

340B revenue has been strong, stronger than anticipated, and overall volumes have helped get us to a good fiscal position. Department heads are actively working towards meeting unmet patient needs and are buying equipment for testing and other services. On the flip side, contract labor is higher than we budgeted for and maintenance costs have increased. Utilities are also now higher with the work building and the MRI coming online, but the MRI will also be generating revenue now. Our cash reserves are looking good and we discussed shifting funds between accounts.

Additional good news is that we're caught up with paying vendors. We have audit information pending and expect a trial balance by the end of August, and we discussed making a budget amendment to give PMC the authority to expend additional funds, and noted our total operating revenue is up over 9% since fiscal year 2023. In grants, we submitted— I'm sorry.

Sorry, Jim. Yeah. In grants, we submitted 3 RHHTP grants about which we hope to know more in late July. And Katie noted challenges with the application process, and we thank her for her diligence. Grant funding is vital, and in FY26 it covered 3.5 FTEs of staff time over 13 PMC positions.

And we've now spent the majority of the HRSA facility funding already awarded, as well as the State of Alaska Coronavirus Project dollars. That's it. Questions on Cindy's report?

Thank you, Cindy. Um, Bylaws Committee. Um, I was not at the meeting, but I understand I need to read some sections of proposed changes.

Did anyone have anything to say regarding that meeting before I read them?

But my understanding that we are going to recommend a change in Article VII, Medical Staff, under Section E. The medical staff shall recommend to the board the appointment of the medical and surgical privileges for each member of the medical staff annually. That looks like an addition.

The other recommended change was under Article 8, and identification to the extent permitted by the charter of the Petersburg Borough and the Petersburg Municipal Code is added to the front of that paragraph.

Um, and I believe those can be voted on at the next meeting, correct? Yeah, those were the only changes that we seen and were recommended.

That'll move to the next meeting, I believe. Yes, Joe. Oh, I just, I just wanted to add, I attended the Bylaws Committee meeting and, and, and the attorney was, was on the phone and met with us at the time and recommended these two changes. Okay. I have one other change we need to make, and it's very minor, and that is Article 11 should say amendments instead of addmendments.

That's easy enough. Okay. LTC Quality Committee. Yeah, this is Joe. I attended the long-term care quality meeting on June 17th.

We, we didn't have any general updates at that meeting, but we did, we did go through some action items such as a long-term care facility assessment that was, that was in the packet and it was reviewed and discussed and approved. We had an update on the fall system in long-term care that that had been completely installed.

We went over the facilities room maintenance list. There was a draft list submitted and reviewed, and the staff will edit that list as necessary, so that action item was marked as complete. We discussed survey readiness and long-term care, and it was mentioned that disposable glove stations, hand sanitizer stations, and sharps containers those needs have been addressed. And the last thing I have here is we discussed the active policy list that Sheena has been working on, and that this active policy list will be presented, I believe, at the next quality meeting. Questions for Joe?

Thank you, Joe. Marlene, Foundation? Meeting. Medical Center Foundation met on July 22nd. The main business was preparing for the Pedal Paddle Battle, which will be August 8th, and like to encourage the public to consider being a sponsor and to— or cons— and/or consider being a participant.

So this starts in Skow Bay and people either paddle a paddle bow or a kayak or canoe, or they can get on a bicycle. And the endpoint is Sandy Beach, and then there's a big picnic and there's prizes, drawing for prizes. And it's the biggest fundraiser for the education program scholarships that the PMC Foundation gives out to to high school students and to staff who are continuing their education. And if you want to sponsor, you can go to the PMC website.

For Marlene.

Thank you, Marlene.

Human Resources.

Hello, hello, this— hello, this Cindy Newman, Human Resources.

Did we have any questions for Cindy regarding her report? I do. Go ahead, Marlene. Um, could you explain what 8 travelers on leave of absence means? It means that they have expressed a desire to come back to work, and instead of terminating them, we put them on an LOA.

But it has to be within a certain time frame. It can't just be, well, I might come back in the next 2 or 3 years. It's like, oh, I think I'm going to come back within 8 weeks or 4 weeks or something like that. Good. I was hoping it didn't mean that there were people that came here temporarily and then had some kind of an emergency or illness or something and then had to go?

No, we're pretty lucky. We get— we're fortunate to get some very good travelers, and they may want to go home for a little bit and maybe see their family and, and just reconnect, and then they're normally pretty anxious to get back and work here, so that's nice. Great. Any other questions for Cindy? And would you clarify for me exactly how many employees we have?

It really does fluctuate just because we have people on leave and then we have as-needed people. So for example, you know, we have people that work for us, like for example, we have a school nurse who didn't work this last pay period because she's a school nurse, and then we have another employee that might, you know, be gone. So it's about 197, but it does go up and down. So one pay period it'll be higher, one pay period it'll be lower. So when we're reporting to the, um, uh, Department of Labor, we— you'll see a number that goes up and down.

And, um, what I normally do is— and I think this is what Paylocity does, but I, I don't know for certain— is I go off of my Department of Labor reports and I add all of the employees. We always report for the pay period where the 12th of the month, you know, is in, and I add them all up, divide them by 12, and that's our number of employees normally for the year. So it just depends, honestly. And then like right now we're moving up only because— well, not only because, but we have Kinderskog youth programs going on. So you may have noticed that we actually have a Gen Z, a different title, and I was like, oh my gosh, I, you know, from 2000, born in 2011, so our 15-year-old.

Day. And so, um, so it, uh, it really does go up and down. So for example, the 15-year-old probably won't be working for us during the school year, right? So, okay. Any other questions?

Thank you, Cindy, for that report. Thank you.

New facility.

Have anything reporting on the new facility?

I don't see Justin on, um, I don't think there's anything, um, up new than, uh, within the previous month. Okay, any questions regarding that report?

Thank you for that report, Justin.

Quality was question on Stephanie's report.

There you are. Yes. And what was your question, Joe?

Oh, I can wait if, if Stephanie had some comments. I can, I can wait until she's finished. Yeah, no, no additional updates for you. Happy. Oh, okay.

Yeah, this is Joe. I just wanted to mention, I probably could have mentioned this under board member comments, but Stephanie's report mentions the Cedar Social Club, and I just wanted to say that I was speaking with a member of the public today whose loved one participates in the Cedar Social Club, and they had nothing but great things to say about the program. And that's all, I just wanted to share that. Thank you. Thank you.

Thank you. Any questions for Stephanie? I would be curious to hear a little bit more about the public dashboard, the quality dashboard.

I would say that it's in its infancy, but it is a goal of mine over the next 6 months to be presenting with you monthly metrics to kind of get a good gauge on safety and incidents and general quality measures within the hospital that you can kind of— if expect to see monthly. So, so this isn't something we'll put on our website that the public can—.

It certainly could be. Oh, okay, okay, interesting. Yeah, I guess we can kind of see how it evolves and what people would like to see. But well, it said public dashboard, so I was trying to understand what exactly that meant. Gotcha, gotcha.

Any other questions? Thank you, Stephanie. Thank you.

Infection prevention by Rachel.

Any questions regarding that or comments?

None. Thank you, Rachel, for that report.

Executive summary.

Good evening. Thank you. Um, submitted my reports. A few things to probably highlight in, in here, as usual, is, uh, we've definitely reached a milestone for the MRI. We're starting to see patients now in this week, as of this week.

So it's really— that's exciting. I can probably answer one question related to MRI. It is completely enclosed in a in a copper-lined room, so it's a room within a room within a room. It's very regulated, so you can't actually go in there unless you have met certain processes. You know, everything's magnetized, so you got to be really careful in that.

So that's part of the, the workflow, whether it's cleaning or whether it's a patient care area. So there's a very regimental process for that. Um, we have an open house that we're looking forward to. And that, you know, my, my thoughts were we were kind of having the soft opening for the past year, and we are looking at, uh, um, with the MRI being online, we're looking at July 14th between 3 and 6 PM. So it's open to the community.

I'm very excited about that, reaching that sort of milestone. I wouldn't call it a grand opening because we've been, you know, coming online slowly over the past year. So we have some of the education rooms for the public-facing computer lab, telehealth pod, and, um, and then the conference rooms as well. So, uh, I'll be, I'll be in there in the conference room providing a little presentation as needed, or slideshow, and with some of the ideas of the future planning as well with the site anticipation and next phases are. Um, other projects we have been initiating— some of our capital items are finally getting off the ground that we've identified.

So like Pixis Unit, which is our medication safety initiative, that's, um, live right in the ER and in acute care. And so that's really dispensing— medication dispensing system, for lack of a better word, but Elise has been leading the charge on, on that, and she's reported out here at the board meeting. But it really helps with patient safety, medication safety overall, and so it's a— that's a really important project. Along the same lines, we have lab new chemistry analyzer that was purchased with capital item as well, and that's to replace the old analyzer, but it also provides more opportunity for tests, turnaround time and tests on, uh, in Petersburg, which are really important when you're talking about treatment protocols. And so there's some new, um, tests that'll be available.

Again, there's a very strict regulatory and quality control process that our pathologist has to approve for each one of those tests, and so we're getting those online as well. Pretty major project for that one. And then our direct primary care, as Kelly was on the radio today, and we talked about providing an alternative, sort of more affordable opportunity. We've been talking about this quite a bit, and so there, the team is ready to launch that, that program and sort of enroll people in the community who want to be part of that. And it's a subscription-based service of $120 a month for an adult, and I think it was $80 a month for a child.

But it's just, you know, access to primary care that is a lot more affordable, not having to go through insurance, and also, you know, really making it more available to people with catastrophic insurance. These wouldn't be Medicare or Medicaid because we're not allowed to do that under the state regs. But, but it's really an exciting process. So I'll report more as that, that comes online in the next, um, uh, July 1, uh, rehab department. You know, one of the side effects of moving up the hill is been able to free up some space.

We were so cramped in so many different areas in the, in the old campus, um, and we were able to, uh, as we free up some of that space, we were able to repurpose it into a dedicated, um, area. Is one of the More exciting things has been a second gym for PT and rehab department, which is, you know, a lot of times if you go in there, there it's in the hallway and it's outside, and it's really, really challenging seeing the number of patients and the need on making sure we get appropriate care. So having a second gym has been really, really exciting, thanks to Wolf and Facilities for really helping get that together, and that's coming along really well. So, um, so those are some good things, uh, within our campus. We also, as you all know, we had Senator Murkowski visiting the Petersburg Medical Center specifically and touring the work building.

And it was kind of last minute, of course, with her schedule, but it was— I was very excited to show the new facility and the work that's— a lot of it was her funding that was able to get it, get the program or the campus together. So very excited about that. And then lastly is our youth programs ramping up quite a bit. Katie, Katie Homeland has been doing an amazing job getting access to outdoor— I call it the outdoor health and wellness program, not just childcare or summer camp, but really it's an amazing opportunity to build off of that., and, and really invest in our youth on outdoor education. I think that's, um, we have our numbers, our statistics, uh, um, that, uh, pretty status quo.

Our census, you know, a little lower on the long-term care inpatient, but ER, as summertime hits, is always extremely busy, and we're seeing those numbers quite a bit and pretty, um pretty stable in the clinic side. So from a census and volume standpoint, our home health numbers have increased in the past month or so, but those encounters are there. And then of course this week we have our SCOPE clinic. Jennifer's been coordinating, leading that, and that's really amazing. I mean, to have the colonoscopy and endoscopy for having in our facility, again, that's actually a a prevention for colon cancer, and that's, that's, uh, something that's very, uh, you know, important when we're coming down to our services locally.

And so people don't have to go outside to be able to do that. So, uh, great to have that, uh, at PMC. And I think that's all I have. Any questions for my— for me?

So if, if I have one of those high deductible insurance plans and I want to read more about the primary direct primary care program, where do I go for that information and how are people going to sign up for it? Yeah, so that'll go down at just two, two areas. The business office where most people come in to, if they come in to pay their bills, the, that business office will, uh, was available for that, but also the clinic. So primary care on the Joy Jansen Clinic, you come in and ask for that, and they'll, they'll be someone available to walk through what that looks like and the details related to, to that, to that plan.

Yeah.

Any other questions for Phil? No questions, but I just wanted to reiterate during our meeting that rehabilitation staff is really excited about the new space, and I got a chance to visit it today, and it looks like it's going to be a much better space, more spread out, places to store equipment instead of everybody and everything on top of, top of everything else. So I— that's a good stroke for us.

Thank you, Phil. Did anyone have any questions regarding Katie Bryson's, uh, grants update?

Oh, can I—. It might—. I don't know if Katie's on and wants to comment, but it's— it was the RHTP proposal. It was 4 submissions, uh, not 3, and, um, that got to the next level, and it's been a very challenging process, um, to, to get all, all those in. But I just want to really thank Katie for, for putting a lot of work into and effort into putting those proposals in.

And as we know more, we'll provide that information back. Thanks. I am on the line and I really appreciate you saying that, Phil, and I also want to say that the teams throughout the hospital, every department, have people who are providing things on very short notice to me and really thoughtful, heartfelt, well-planned ideas. Every single thing that PMC put into these projects would be beneficial to the community. It made me really proud and honored to work on those.

And the, the 3 proposals probably Cindy was referring to, those are the competitive proposals that we still don't know whether we'll get, whereas we also put in one follow-up package for a proposal that they passed forward as a planning project, which means it almost certainly will be funded. And that's a pretty exciting project that Ali's wife, Kelly Wood, and a larger team have put together around support for pregnant and parenting people in Petersburg. So look forward to more details coming out about that soon, as soon as we have the actual final confirmation on that project from the RHTP folks. So thanks again, Phil, and thanks to the board.

Thank you, Katie.

Financials. Can you all hear me? Yeah. Excellent. So got a few things to go through tonight, so I'm going to— go through the financials a little quicker than usual.

You should be able to see there on the screen patient volumes, and as Cindy had indicated, we're, we're up in, in some areas. That is very typical for May, June, July, August. So clinic visits, 811. Radiology procedures, 238. That's kind of consistent with previous months.

Lab tests have been strong this year. Due to the health fair that we've had, but we had 1,800, almost 1,900 last month. Rehab service is very strong. Thank you to the community and thank you to— we have a husband and wife team that are at the facility providing therapies and it's being very well received and we need more space. We're working on that.

Home health is— was busy, 257, and emergency department visits, very typical., in the summer months to see 100, and, and we're, that's what we're experiencing. Um, in acute, not, not quite 1 person a day, uh, for the month of May, and, uh, swing bed, just, just more than 1, um, and long-term care, uh, up just a little bit, um, as you can see here since December, our numbers have been a little lower not to be concerned because it's what we call a rebasing year. Medicare, Medicaid is going to look at this year and determine rates for the following 4 years. So it's actually okay to be a little light in volumes and then we want to be really strong for the next 4 years or next 3 years. So that's okay.

Revenues here, you can see gross revenues for the month, $2.7 million on a budget of $2.7. So just shy about $17,000.

Contractual allowances, a little lighter than normal. We continue to release some contractual allowance there, anticipating a positive Medicare cost report settlement coming back to us due to the increased cost depreciation from the work building. So net patient revenues there, $2.48 on a budget of $2.2. As was indicated, 340B revenues a little higher. Especially year-to-date.

We're seeing $745,000 compared to budget of, um, uh, $500,000. And expenses, uh, for the month, $2.48 million, um, so $200,000 above. Uh, some pieces, some reasons for that: contract labor, uh, $40,000. Once again, you got some therapy, some some nurses. We got some employee benefits running higher than budgeted, purchase services, utilities due to the, um, the work building there.

So, uh, so net income, so $369,000 for the month. Once again, most of that is a release of the contractual allowances, but also 340B being strong. Investments rebounded $126,000., compared to a budget of 19, uh, and depreciation is a little higher. So net income, $183 million year to date. Um, you know, on some of these key figures here, I'll just recap a few.

So gross patient revenues, $30 million, $30.4 million for the 11 months compared to a budget of just under $30 million, $39.9 million. So Um, not, not quite $500,000, um, above budget on gross revenues. And then on net patient revenues, uh, $24 million against a budget of just under $24, so we're $228,000 above budget. You can see the, the 340B revenue is $240,000 above. So total net patient revenues is actually $1.3 million above budget.

I think a big chunk of that has to deal with the, the PERS, the USAC. We're getting more money there because of the grant funds for the work building and other grant revenues that we have received, other revenues. And then expenses, we have been above. We're going to talk about a budget amendment here in a minute. Total expenses, $26 million, uh, on a budget of $24.6 million.

So we're about $1.5 million above budget in that category. And net income, we're $1.6 million, uh, compared to a budget of $1.8 million. So we're just shy in that area of $115,000.

And investment income is very strong, uh, almost $800,000 this year on a budget of $200,000, so almost $600,000 above budget. And I do think the non-operating revenues have been very strong. This has to deal with the, um, using up all of the capital grants for the work building, depreciation running a little higher. Okay, people of statistics, here you can see Cash balance in our operating account, $3.2 million. Our short-term investments, our liquidity, is $2 million, giving us almost $5.5, just under $5.5.

And then our investments long-term is $5.2, so almost just over $10 million. Uh, we talked about, you know, moving monies, what we, you know, shifting between accounts. What we mean by that is moving some of this that's in the operating account, moving that to the long-term investments account so that we get a return on investment and those funds are being put to good use. Everything else on the, the balance sheet are accounts payable, various liabilities, things of that nature, looking very much in line.

A couple statistics down here to share. So days in accounts payable, how long does it take to pay your bills? So we're at 21 days. Days in accounts receivable— how long does it take for us to collect on our accounts receivable? We're at 58.

If you recall, under a previous vendor, we were usually at 82. So over the course of the year, we've come down, and that has actually brought in that money that we saw back in the operating account. Days in AR net, 42. Days cash on hand— this is wonderful to see— 133. What does this mean, 133 days cash on hand?

If, if for whatever reason we were not able to collect money because of a banking issue or a billing issue or whatever, how long could we go paying our bills, paying payroll, things of that nature? And this basically tells us we could go 133 days. So what's that, 12, almost, not 12, 4, almost 5 months. And so it's very reassuring to know that we have liquidity. To be able to meet our cash flow needs.

Doesn't, you know, very hap— happen very often, but, you know, there are glitches that happen in billing, and it's important for any organization to have some reserves. And we have a good investment strategy. We keep some in operating accounts, some in short-term investments, and then the bulk of it in long-term that could be used in the event of an issue. But it's very sound financial management. Okay, any questions on the income statement or balance sheet?

Okay, if not, I'm going to move on to— there's a proposed budget amendment, uh, for 2026. Uh, so when we look at, uh, the, uh, total expected, uh, expenditures, uh, for the year as compared to budget, uh, the, the budget was approximately $30 $30.1 million, and we estimate that our actual expenditures will be $31.1 million, creating a difference of approximately $1 million. This, this difference, this variance is due predominantly to contract labor. So we've had about $443,000 of additional cost for nursing and therapy staff. Employee benefits is $436,000.

This is, if you, you know, when you look at the income statement, you know, we've been down staff. That's why we have increased contract labor. But at the same time, we insourced the business office. And so it actually looks like the contract, or excuse me, the budget or actual expense for salaries and wages matches our budget. And that's true, but there's this— we insourced the business office, and so there's a decrease in some of those costs there.

But we did experience some increase in employee benefits, payroll taxes, PERS, and some contributions there because of bringing that business office in-house. And there are a couple of other additional hires that happened over the course of the year because we're busier and we're doing more programs and things of that nature. We also have the utilities, uh, is up in the work building, but there's also an additional $600,000 in grant funds to cover that. Repairs and, um, and maintenance, uh, $116,000 is anticipated to be above budget due to an older building, and $116,000 approximately in other operating expenses some consulting fees I think were associated with the employee retention tax credit, some other things of that nature. So while, while our expenses are looking like they'll be higher than what we originally planned in the budget, our operating revenues will be much higher than that.

So if we're up $1 million, our operating revenues we anticipate being up $1.5 million. So that's like a 50% return on investment right there. So the operations— so the work building we have, we, we anticipate a positive settlement in the cost report due to the depreciation expense on the, the, uh, on the building. Now, now, now recall, we don't— we didn't— this is all a grant. We built that building with a grant.

We didn't actually have to borrow money and repay a loan. We don't have interest expense. So when we depreciate this building, it flows through the cost report and the cost— Medicare reimburses us for something that we were already paid for. We get double paid. It's a wonderful way to kind of help us in our future capital plans with being able to come up with the cash and be able to, at some point, be fiscally sound to do what we need to do for the rest of that campus.

Long-term care volumes were higher at the beginning of the year. Uh, there was a reduction in the gross days in AR over the course of the year, and, and this actually allowed us to recapture about $360,000 of bad debt. And then the 340B has been stronger for us than anticipated, and also the grant revenues. And so we are proposing a budget amendment to ensure that there's an appropriate appropriations for the year. But the budget amendment is to increase the budgeted expenses by $1.3 million to cover those additional costs.

And Jim asked a good question during the finance or the resource committee, you know, budgets, shouldn't we, you know, shouldn't we stick to a budget? And yes, we should strive to stick to a budget, but we're a business entity, not a— I know we're a government entity in terms of that's how we're owned, but our operations mirror that more of a business entity than they do a government entity. What do I mean by that? Well, you know, you could have a borough, you could have a county, some kind of a governmental agency, the public health department. And in that situation, the government collects money this year in property and sales tax.

The, you know, the county commission, the borough council, or whoever does a budget, and that's an appropriation. It's a legal— it's more than just a business plan. It's a legal authorization for the agency to spend money. And then you go and you do those things. And in a government, if you get, you know, partway through the year and some things happen and you run out of budget, you just basically stop working.

You stop doing those projects. If you're the, you know, the county road and bridge crew, you stop fixing roads because you ran out of budget. Well, we're a hospital. We can't just stop providing care. And so when we have services that are different than what we anticipated, costs that are different than what we anticipated, we have to find a way to pay for that.

And, you know, being that we're more of a business entity, usually when costs are higher, it's usually associated with the fact that we have higher patient services that we've provided. And that's the case here. And we spent more money, we spent about $1 million more, but we've generated $1.5 million in additional revenues to cover those costs. And it's just appropriate for us as administration to disclose that to you, uh, and seek your approval, uh, in a budget amendment for that.

You have questions before I go on?

No. Okay. Oh, I think it's the motion for that too, right? Well, we, we still have to cover the motion here though. I, I have a question.

Okay, Joe, just one question. You, you mentioned that, uh, Increase the 2026 spending. Is that fiscal year 2026? Yes, July 2025 to June 30th, 2026. Okay.

Any other questions? So I would entertain a motion to increase the 2026 spending appropriation by $1,300,000 to cover the additional costs as explained, to be paid for by the additional revenues as explained.

I guess so moved, with the— maybe the addition of fiscal year in front of 2026.

Should I read it?

I just need a second on that. I'll second it. Well, you can't make the motion and second. I was entertaining a motion. I'll second.

Okay, so we're putting— increasing the fiscal 2026. Does everyone understand that?

Okay, all in favor, or do you need a roll call?

All in favor.

Hi.

Hi. Hi. Okay. Um, to stay on, did we want to go through these or the way the schedule is set up, the, the housing update was first, or does it matter? It's up, it's up to you.

Okay, let's go ahead and go on with these budget stuff. Okay. Um, I, I'll come back to, to this one. This is, you know, as far as the document here that appears on my screen, is the capital budget. I'll come back to that after I go through the operating budget, but wanted to take a minute to explain the operating budget.

What you see here, some different columns. So actual expense for fiscal year '23 and actual expense for '24, '25, the 2026, we've taken the actual expense for the 11th month, 11 months divided by 11 times by 12. To give us an estimate of the full year. And then working with the department managers, looking at various things that may change in the coming year, have made a projection or created the budget for 2027. Now, we've had various conversations over the year, concerns expressed by the federal government and that about decreases in reimbursement.

As we get to this point, we don't have anything concrete in terms of changes in reimbursement to the Critical Access Hospital program or the Medicaid nursing home or things of that nature. So we, we are not budgeting for any kind of significant change there at this point. So just want you to be aware, should something come up, we'll disclose and we'll come back and revisit this. But we're anticipating consistent reimbursements in the coming year. Over the course of this spring.

We'll submit the cost report in December, and then in, you know, March or April-ish, the state will work through what's called the rebasing of their Medicare rates, and those usually get approved by the end of June, and they'll impact fiscal year 2028. So not, not this fiscal year that we're budgeting for, but the following one. So just, just wanted you to be aware that while we keep talking about a rebasing, we're not anticipating that impacting these, these numbers. We're budgeting otherwise a 3% increase, which is what Medicaid has shared with us in some— in their rate letter. So the expenses here, anticipating about a $31 million operating expenses broken out as stated here.

We are, you know, I would say that we We've increased these costs by about 2% above what we anticipate, just so that we make sure that our appropriations, our budget is a little higher than what we anticipate. We've tried to do a very good job of letting department managers know that their budget is actually 2% lower than these numbers. But once again, we are a borough and we need to approach this as an appropriation, not, not as a not as a tight budget or a carrot that you, you budget low. And we need to be slightly above and have actual come in below. You see the depreciation, interest expense, things of that nature.

Now I'm going to— not in, not on your screen, but on my screen, I need to jump to a different page. Because I had— give me just one minute. I wanted to go over the assumptions.

Oh, there we go. Okay, there we go. Don't think it's showing on your screen.

So the assumptions that are built into this budget, there is a 5% increase in the charges in the Chargemaster, and there's also a $2 million increase in revenues due to MRI services, a new service line, increased personnel expense. We didn't do a straight across the board increase, cost of living. We've looked at each employee compared to the Alaskan Hospital Association salary data, and there are some adjustments to keep or make sure that we're paying people according to market wages. We do have an increase in contract labor due to having an MRI technician coming up this coming year. Grant revenues way down due to, you know, we're kind of done with that work building.

We did not incorporate any grant revenues or grant expense associated with the Rural Health Care Transformation Program. When we're awarded those, we will need to make a budget amendment for those. And then traditional grant revenue estimated to be $1 million based on current known awards. So just wanted to declare just some of those budget assumptions. So going back to See, here we go.

Okay, back to our budget. So we— or this is what we're proposing for our budget. Um, I'm going to come back up here to our, our capital. If we—. In total, we're looking at about $1.8 million.

Uh, this, this is a little higher. Certainly we will final negotiate different purchases here.

Try to highlight just some of the biggest groups. There's, there's actually just 2 or 3 large groups. $700,000, We would like to purchase a new CT machine and we budgeted $700,000 for that, hope to come in underneath that. There's a variety of things associated with some hospital beds is the next kind of biggest expense here. So the $230,000, and then there's a variety of little things— Stryker bedside tables, things of that nature— that actually adds up to another $700,000 when we look at all of the pieces with that.

There's some equipment for computer equipment, so Cisco switch replacement, Windows 11 devices.

And coming down here, stretchers, that's once again part of the beds. Some more computer equipment, hypothermia machine, and 3 vehicles. We have, we have about 15 vehicles. They're quite old, and we hope to get into a rotation of buying 3 vehicles a year over 5 years so that we can have newer, more reliable vehicles. So, and then some miscellaneous.

We have things happen with the building, with surgical equipment, variety of things that are not, we're not planning to replace them, but they break down and we have to replace them. So we anticipate between the two largest expenses here, the CT and the beds, that's gonna be about $1.4 million. Um, when we get ready to do those, we will come back to the board and ask for permission to enter into a capital lease agreement. We would prefer to borrow the money, um, instead of using that out of cash. I know we, we put aside the money, which is very important, and, you know, we, we intentionally, you know, have the surpluses, and we set that aside for for the future, but when it comes time to actually buy it, what we find is we're earning 12% interest on the stock market on those funds, and the cost to borrow is 5 to 7%, and that money, that interest cost and stuff, flows through the cost report.

And so it's actually better to finance those pieces of equipment over their useful life and have that flow through the cost report. So I just wanted to declare that because the borough always wants to know what, what is our potential borrowing capacity or plans for the year, and we need to disclose that. So that's part of the budget. When we say we're requesting $1.8 million, $1.85 million, um, we're all— we're also asking the board for permission. We'll come back to you when we actually get ready to do that.

We're not asking for a preliminary vote. But we're asking you to approve the plan to borrow up to $1.4 million for those 2 big items.

And then once again, the operating budget here as presented, the numbers are showing opposite. I'm sorry, I failed to explain that, you know, the way the debits and the credits. Reside in our computer system, and they actually are in there opposite what you would think. So when you see that revenues here are a negative number, they got brackets under them, that really means a positive. And then the expenses are positive, that really means a negative.

And so when you see the bottom down here and it says our budget is a negative $753,000, that it's actually opposite. Um, we have to do it that way because You know, once this gets approved, we have to load this into the computer system with the signs the way they are so that it enters the computer system in the right debits and credits. So this is actually a positive. We're stating that we project a positive net income next year of $753,000. Most likely will come in under expenses.

Revenues will be a little higher, especially with the grant revenues. We'll probably see, you know, $1.5 million next year. But so very good. But this is what we're otherwise budgeting for. Any questions on the budget?

Joe, I have a question on the capital budget. For fiscal year 2027.

I don't— I guess I don't see estimated costs listed for the vaccine refrigerator or new colonoscope. I'm just wondering if that $1.85 million in the capital budget includes the cost of those two items. I think what happened is they've already purchased those, but I'm not— I'm not—. Yeah, we didn't Yeah, we, we purchased those already, so we took them off the list. Yeah.

Thank you.

Any other questions?

Thank you, Jason. So just, just wanted to, you know, just wrap up here. We had a very good conversation, uh, in the Resource Committee, and we highlighted 3 years ago, we were sitting at 62 days cash on hand. And, you know, we'd come out of COVID and we had to repay some monies to Medicare. We were struggling with reimbursements being caught up, patient volumes were down.

The, you know, the organization, the community has really worked hard building strong support and We've seen volumes rebound. We've managed our, our resources well. We've insourced the business office, done a variety of things. And now here we are. We have 133 days cash on hand.

We have been profitable. We put monies away in preparation for future capital plans. Things are going very well. So we submit for the board's approval the operating and capital budget.

I would entertain a motion to accept the PMC operating budget proposal of FY '27 as presented.

So moved. Second. Been moved and seconded.

Hearing no discussion, all in favor?

Aye. Aye. Aye. Aye. I don't know, do we need voice vote?

Oh, it would be good to do a roll call vote. Yeah, yeah. Echoey.

Yeah, the motion and the second. So it's just going to do the roll call.

Roll call. Board President Cook. Yes. Board Vice President Lagodakis. Yes.

Board Secretary Cushing. Yes. Board Member Stratman. Board Member Khan absent. Board Member Roberts.

Yes. Board Member Johnson absent. Passes. Okay, I would entertain a motion to accept the PMC capital budget for FY 2027 as presented. I so move.

I will second. Been moved and seconded. Is there any discussion? Discussion?

Hearing none, roll call. Roll call. Board President Cook. Yes. Board Vice President Lagodakis.

Yes. Board Secretary Cushing. Yes. Board Member Stratman. Yes.

Board Member Khan absent. Board Member Roberts.

Yes. Board Member Johnson absent.

Okay. Moving back up to old business, uh, housing update.

Cindy, any updates on our apartment numbers? Cindy Newman?

Yeah, so we roughly 21 apartments. And, uh, continue to look at alternative options for housing.

Um, Bill, is there anyone that Mr. Kowalski could talk to regarding his concerns? Yeah, I can have— I'm happy to get your number and get back to you, and we'll be happy to have a conversation. Yep.

Next meeting is currently scheduled for July 30th at 5:30 PM. Is there any major conflicts with that?

Uh, I'll be traveling, but I'll be available online.

Um, do I have a motion to go into executive session? I'd move we go into executive session to consider medical staff appointments or reappointments and to discuss any legal and financial concerns. Second. All in favor? Aye.

Aye.

Aye. Thank you everyone for your support.

Thanks, Jason. Thank you.

No, you're good.