South Central Kansas Medical Center (SCKMC) has received the most financial support of any external agency from the City of Arkansas City in 2016.
During the July 19 regular meeting, City Manager Nick Hernandez presented to the City Commission a comprehensive breakdown of where the money loaned to the hospital had come from in the budget.
The entire amount — $30,000 — built into the budget for the Arkansas City Area Chamber of Commerce was redistributed to the fund used to “float” the hospital, as was $58,000 from Cherokee Strip Land Rush Museum — although the museum did receive $110,000 of the funds promised to it.
The commissioners, who determine the final budget at the beginning of each fiscal year, also were given a list of cuts made by three city departments.
From the Arkansas City Fire-EMS Department budget, $401,739 was cut. This included the elimination of one position and the fiscal impact of unfilled positions in the department, along with the accompanying benefits. An additional $85,000 would have served as the first payment on a brand-new tanker.
The department’s newest tanker is 30 years old and in need of replacement, Hernandez said.
A total of $133,700 was cut from the Arkansas City Police Department budget. Among the cuts were wages saved from the temporary reduction of one position and four unfilled vacancies.
The Parks and Facilities Division cut $274,000 from its budget, or 35 percent, which included eliminating all summer help and the spraying of streets for weeds.
The most substantial items cut from this budget were the repairs to the Agri-Business Building roof and the City Hall elevator, both valued at more than $90,000.
“The city has made cuts across the board and it wasn’t easy,” Hernandez said. “I would like to commend the departments for doing such a good job.”
City staff were able to eliminate 13.68 percent of the total budget to set aside funds for the hospital this fall.
SCKMC also currently owes the city 17 months of special assessment payments on its property. At approximately $17,000 per payment, the total owed for the special assessments alone is $304,880.
In addition, the city also has extended three loans to the hospital for help with payments on its bonds.
The first was $300,000 — an amount which was to have been paid off at a rate of $25,000 per month until the full amount was paid back to the city.
Only three payments have been made at this point in time. This loan was extended in September 2015.
The second loan, made in February 2016, was for a total of $275,000. It brought the total owed for loans to $500,000.
Additionally, the city just paid $75,000 for the first payment to Quorum Health Resources, the outside consulting firm brought in to evaluate the hospital’s finances and operations following a technical default on the bond payments.
Altogether, the total amount owed to the City by SCKMC is $879,879.50, but it could be set to almost double in the next month.
That’s because the hospital administration has advised it likely will be able to pay only $100,000 of the upcoming fall bond payment. The payment is $1,165,967.50, with approximately $405,000 set to be paid with sales tax funds. Hernandez estimated the city will have to pay the balance of $760,967.50.
The city also will pay the $100,000 estimated balance owed to Quorum after its services have been rendered.
During a presentation to the board, SKCMC Chief Financial Officer Holly Harper showed that the hospital’s census numbers have decreased from this point in time last year. Although revenues are up almost $1 million, operating expenses have increased enough that the gain in gross income was relatively slight.
Hernandez asked Harper if the hospital actually had made the cuts it claimed to be making earlier this year.
She confirmed that it had, but said the cost of operations had increased due to supply costs and personnel costs.
Commissioner Dan Jurkovich asked for next month’s presentation to include a list of all the promised cuts and a summary of what had been saved so far.
Commissioner Jay Warren and City Attorney Tamara Niles were not present at the meeting.
In other business, the commission:
- heard budget requests from Cherokee Strip Land Rush Museum and the Arkansas City Public Library.
- unanimously approved the consent agenda.
- unanimously voted to table until Aug. 2 a proposed traffic study of North First Street.
- unanimously approved a public meeting at 6 p.m. July 26 at City Hall to discuss the 2017 budget.
- tabled an ordinance that would combine the Board of Zoning Appeals and the Planning Commission.