Finance Committee - 2/23

The agenda and materials are posted on the website.   Most of the action items will be presented at the District Board Meeting.

1.  January financials.  Highlights are cash was 10k at the end of January.  Net income was +24k due to a looking back 160k adjustment for long-term care beds offsetting the loss of 187k in IGT accrual.  ADC for critical care was 5.1 making the 3 consecutive months Nov-Jan the highest census in the ICU for the last five years.  Average length of stay is at the high for the year, but it jumps around.

2.  Wound care program due diligence is solid.  I cannot support it at the present time; I want resolution on the Hospital's status prior to such a large investment of time, energy, and money (about 900k in capital).  I have no reason to doubt that the program can be profitable, but any positive impact on the bottom line will not be seen for at least 8 months and probably longer.

3.  Financing seems reasonable from the Bank of Alameda, but the covenants seem risky.  When I questioned the necessity to have at least 1.00 net income, I found out there is 1 to 1.5 million in non-cash income that will likely be realized prior to the close of the fiscal year.  This significantly revises my estimate of a 100-400k loss.  With that amount available as a cushion, there is every likelihood of a profit although cash flow may continue to be problematic.  (It might be time to consider expensing some of the seismic since those expenditures have to be considered somewhat impaired given the delay in the project.)  The covenants tie the Hospital to a 1.75 DSCR for the seismic financing which would mean that the monthly positive cash flow number would need to be at least 200k in order to cover the existing debt plus the new seismic debt.

4.  Line of Credit from Bank of Alameda same issues as above.  It seems to me that the LOC will almost certainly need to be drawn upon for the IGT transfer.

5.  New equipment for the Hospital funded by a 2002 donation (Jaber funds).  The 10 new defibrillators will replace disparate equipment and there may or may not be credit for the older equipment.

6.  Purchase of PC's with carts for the EHR.  (These are known as COW's).  The cost is about 6k per unit which seems high to me, but I'm incredibly cheap when it comes to computer purchases.  Also, the mobile cart is a big piece and I've never bought one of them.  The bid accepted is 6 percent higher than the lowest bid.  Reasons  for choosing this bid over the low bid such as support, timeliness of delivery, etc. will be documented.

These items were very meaty and required a lot of time so the other items got somewhat short shrift.  Since I attended this meeting, hopefully the Board meeting will move faster without me asking a lot of clarifying questions.

Board meeting is 3/7 I believe.