001Six o'clock I'm gonna call this meeting to order and I do want to acknowledge we have a board member at case who was joining us via zoom You're gonna have to speak up just a little bit The last supper, as they might say. Well, thank you for joining us. All right. Do we have any members from the public with public comments on anything that is not currently on the agenda? We have Judy here with us today, our past board chair. Okay. If not, we will move on to the consent calendar. We have four meeting minutes from the committees and the board and our policies and procedures. Medical staff credentialing any questions comments edits All in favor, aye Okay, next up we have mr. Henley I'm gonna introduce both topics. Oh wait, I had two announcements
002I wanted to make Because I just thought of John and I don't think I'm pre-empting John but I wanted to acknowledge the Partnership Health Plan Quality Award that was received by the hospital. Congratulations to one and all. Sonoma Valley Hospital is one of only eight hospitals that earned a perfect 100% score and as quoted by John Henley This award highlights our commitment to delivering high quality accessible health care to our neighbors and friends and we are incredibly proud and honored to serve our community. Also, I wanted to make an announcement that we are holding a board strategic off-site on March 20th. We think it's starting at 9. All right. Sorry, John. We'll move on now to John. He's going to talk about the strategic plan and also provide us the CEO update. Thank you very
003much. And, yes, very excited about that recognition that the teams, the clinical teams, are doing an extraordinary job of delivering high-quality care. So I put together a very brief update on the five-year strategic plan we developed in 2023. I appreciated the exercise because I have a tendency to forget all the stuff that we do when we move on to the next thing. So these are the four areas that in 23 we identified as being our priorities. The board identified as being our priorities. Realign our main campus so that hospital services better meet community needs. Bring care into the community so that the hospital services... meet the community needs Sustainability secure the hospital financially to meet the growing demands for diverse health care services and needs in the community and seismic compliance Ensuring the hospital continues
004to meet seismic standards and remains safe. So I've got a slide on each of these we can go ahead to the next one realigning our main campus We've done a lot of work over the last 20-ish months since we activated this strategic plan. We finished up, well, essentially finished up the ODC, the Outpatient Diagnostic Center, by activating the CT, and then recently turning on the MRI. We did not, and this is my one bullet point that we really didn't achieve that was a goal of ours, is faculty recruitment. We didn't achieve getting UCSF faculty up here. So I wanted to acknowledge that and recognize that as a gap in what we've been working toward. We did grow our staff recruitment, a couple of tactical folks. One, an expansion of social work services, and two, we
005began more actively using advanced practitioners to make care more accessible, and I'll talk about that in another slide. And then we spent a lot of effort and time, and we continue to spend a lot of effort and time on diversity, equity, and inclusion. We achieved an age-friendly health designation for inpatient services, and we are now working on that in the emergency room and surgical services. We formed DEI and health equity committees. DEI is more internally focused on the organization. Health equity is externally focused to ensuring that everyone in our community is receiving the same access and high-quality care. We've embedded staff training around DEI into our health team modules, which are our online training courses for all staff to ensure that everybody is being trained similarly. And then we've partnered pretty aggressively with the high
006school to educate and mentor them in health careers. And we're starting to slowly see the roots form in that, which is really exciting. Next one is bringing care into the community. We've taken a really focused approach on recruiting for primary care. When we do that, they live in our 1206B, which is our one entity that we can engage and contract with providers to provide care. I've listed a couple there we've brought in over the last 18 months. We continue to do that, and you'll see names as we go forward as we attempt to grow that. As I mentioned, we established a geriatric care service. We've also transitioned that into the 1206B where we're starting to create the framework to use what we've learned in the hospital in the outpatient setting. We are expanding physical therapy
007services. 23 to 24, we grew our therapists by about a third, 33%, and by the end of the project, we will have doubled the amount of therapists available. Expansion of community education programs. I think you're all familiar with the brown bag medication program. That's a It's currently not being used because we Educated everybody and people stopped showing up to the events. So we will turn that back on again Probably in the next year at some point That's a partnership with vintage house We've increased the number of speaker series days we have Most of those are in September And then we introduced the Golden Harvest event, bringing together a lot of services for seniors to make them more available and accessible. And then finally, I didn't really know which slide to put this last one on,
008so I dropped it on this one because Epic does make... the community have greater access to their health information. But the EPIC could have been on the financial stability side, developing a more solid EMR. There's a lot of places that I could have dropped this. So EPIC, you know, you can read EPIC on almost every slide. The third is sustainability. Again, this is focusing on making sure we are a financially healthy organization. It was fun putting this slide together because we've made a lot of good strides over the last 20-ish months. We've actively engaged our insurance partners, Partnership, who is our main Medi-Cal managed care provider, and the manager of the IGT, the Intergovernmental Transfer Funds, a lot of the funds that we get. We've really strengthened that partnership, and that's yielded. both increased volume
009and then increased IGT transfers over time. Everyone's aware of the Anthem negotiation that we undertook last year or 18 months ago, and then we've really built and grown our contract with Meritage. Serial improvements in our financial data. I pulled a couple out here just as examples. Operating EBITDA with including parcel taxes. We went from about a half a million dollar profit. We actually saw a loss the middle year and now we're tracking at a million dollar profit this year, only halfway through the year, a little more than halfway through the year. Expense management over that time was up about 8% while revenue was up 13%. That's good math. We had what we categorize as a debt makeover. We paid down a significant amount of debt, and we refinanced a significant amount of debt. Mid-2023, we
010had about $31 million in debt across a few different long-term categories. That is now down to $24 million. So that's a big reduction in our long-term liabilities, and we're continuing to work on that. Building strategic relationships, one key one this past year was Summit Bank. And then, as we've talked about, the orthopedic succession was pivotal and helped stay the course in that service line, moving from the loss of a big provider in Dr. Brown to Dr. Walter. Yeah? Question. Just want to confirm. Our actual debt went down. It wasn't recategorized? No, we yes that was paid off. Yeah. Yeah. Yeah and full transparency some of that payoff was go bonds Right. So the community paid off some of that debt. Okay. All right last slide Seismic compliance and this is really sort of a schedule
011or mid 2023 we retained subject matter experts to help us in the process. 24 was a lot of investigative work behind the walls, in the ceilings. We reviewed this last fall and we are now gonna, we're now putting together a proposed path. The state has reminded everyone that in January of next year, your first, your draft of a plan needs to be put in. And that includes if you're gonna propose an extension. Beyond the current required time which we will be doing but but that's coming so you'll see that all right any questions If we were to show a plan for seismic compliance Do we have to also demonstrate we have the funding to support it? We have to have a plan for the funding. Yes Is it even feasible that we can have a
012plan to suggest financing is possible? I wouldn't say we would. I would be comfortable saying we're going to have a cast in stone plan in January, but I think we can have 80% of one where we agree on the steps to achieve compliance. We've costed out what it's going to take to get there. And we have two or three or four buckets that we think we can draw from to achieve that. And one may include, you know, tax funding. I don't know. We haven't had this conversation, but. Yes, I don't think it's going to be easy to come up with $50, $100, $150 million. It's going to be hard. From a purely strategic standpoint, isn't it better for us to acknowledge that we cannot? I'm just thinking that that may put the burden on the
013state. In other words, if every hospital in the state said, hey, we can do it, the state's going to say, great. I think we'd rather say this is a financial burden that a hospital of our size – I know we have to get there, John, but just something to think about. Sure, absolutely. And that may be – yeah, I defer to you as the board, but absolutely. Well, and I would also say that visit with the treasurer, she seemed pretty interested in that extended and how that might be able to weigh into whatever response. we put out for 26 or if the 26th date something different agree with dennis i mean this is this is not something that we're going to be able to easily absorb and still maintain you know did you all hear
014ed and there is again there was legislation proposed that hospitals like ours Would not be obligated to comply without Corresponding state funding now that bill hadn't been approved, but it's been circulated and I think it's still out there So that may be our our path and we should certainly advocate for them Yeah, and I think that's Dennis's point, which is a good one is let's not let's not spend too much time trying to figure out how we Get a hundred percent there understood I just wanted to make a comment on one of the earlier slides. If you can go back one, I think it was. Yeah, so the point about, no, go back. Sustainability? No. Yeah, sustainability. So, you know, we talk about the operating EBITDA with parcel tax, and I think that's a good
015metric now that Ben and I and the Finance Committee is, you know, adopting. and it's going up to a million. But I also think it's important for us to understand that EBITDA means that, you know, we're assuming that all of our depreciation funding is not being reinvested in future capital. And so when we look at our operating margin, it's still, I think it's still going to be negative. You know, so the EBITDA number says we're getting cash flow, but it doesn't mean that we're able to retain that cash flow for future investment. So just, you know, I don't want us to feel like, oh, well, we've got a million bucks. Well, we do have a million bucks, but we have a capital need that's going to subsume a portion of that. Yes, our current capital
016list is around $12 million. Yeah. Any other questions for John? All right, thank you. Whitney, you want to go to the board report? No, he's doing the CEO report now. You can go to the second page. Again, lots of positives. The organization continues, as Wendy acknowledged, with high quality. We continue to be recognized, and I don't want to paint rainbows. It's a daily progress. It's a daily effort. And so I want to acknowledge the clinical teams for the work that they do. And volumes and financials, again, are exceeding budget, which is really positive. A couple updates you see on, or, yeah, a couple updates here. The CMO search hopefully will be closed tomorrow. We have our finalists coming on site. He should have landed or be landing right about now. We're really excited. So next
017month, I hope to report that is completed. And then capital projects. Again, the ODC is on hold. There is some minor work being done in the radiology department related to taking out the old CT, but that's just about complete. So then the only last piece is the movement of the MRI. The ICU renovation is underway. Three of the six rooms are down. They're putting in flooring and replacing furniture and sinks and whatnot. It's exciting and starting to look good. And then finally, the PT project continues. And I am told it continues. The HVAC is the slow piece, and we're still looking at May, June for that. And I think Ben and I and John are working on a capital project tracker. that we should have for the next board meeting. I think we're talking about
018going to the finance committee at the end of the month and then to the board in April, I believe, or just to the board, either one. But we've got a capital project tracker. I know Wendy's been asking for this, and we think this will be helpful to understand how we're getting through the cycle of conceptual planning to implementation. Great, thanks. Any other questions for John? Do we have a CMO report? I do not have a CMO report. Okay. Thank you, John. Thank you. All right. It's audit time. I can't believe that it's already started. So, Ed, do you want to kick it off? And Ben is at the podium to carry the discussion. Okay. I'll just make a couple comments and then let Ben give you a little more flavor to it. The Finance Committee
019met with Moss Adams at our recent meeting. They are in the second year of a three-year proposal that we accepted last year, and we are going to be recommending the Board approve that. But before we do that, Ben, perhaps you can provide some flavor to this. Yeah, so they, if you guys remember last year, we took this to the board where you guys approved for us to transition audit services from Armanino to Moss Adams. Moss Adams actually has historically been. Energy has provided those services to the district in the past. They do provide Assurance services for most of the health districts here in California. So actually we I think benefited certainly from that last year You know, I just would say operationally they were extremely responsive And we were very pleased with their services The
020fee included in the engagement letter is consistent with their proposal for their second year And I think just overall we had a really good experience with them. And I think it's, you know, from even just as we're getting into this year, they've been really great about just providing just free consultative advice if we've just got a question how we're going to treat something from an accounting standpoint. So we've been very pleased to engage them, and we look forward hopefully to working with them in this upcoming year. So I think with that, we would like to ask the board to consider the appointment of Moss Adams for the audit for 2025. Is that a motion? I think the answer is yes. I'd like to make a motion that we approve the engagement letter for Moss Adams
021for the audit for this year. I second. All in favor? Aye. Aye. Thank you. You want to roll right into financials? Yep, can do that. So, yeah, so just a report on January financials. January was actually a... It was another favorable month for the hospital. It was actually the best fiscal, it was the best month that we've had so far in this fiscal year in terms of operating performance. When you include parcel taxes, our operating EBDA was a positive $460,000 for the month. A big part of that was the... big receipt of the rate range igt funds in january so you know noted you'll see in the in my memo that our day's cash we ended december with 11 and a half days which you know will certainly be the floor for us this year
022it was also anticipated but that's also you know much lower than where we obviously need to be but you can see in january we actually ended up 45 days so The rate range IGT, we netted this year 6.7 million. That is more than double from what we received last year. And it's actually, I think, $2 million more than what we budgeted. And that was also what we were accruing to. So you'll see in January. We did have some of the operational pickup was this pickup from the IGT accrual, so about 280,000 here in January. And that will be continuing on between now and the end of the fiscal year. So we'll have a nice little bit of cushion there, which will certainly help us as we're looking to get into the latter part of this
023fiscal year. I think just, what else do I want to say? I think year-to-date, if you look at our operating EBITDA, as John mentioned, we're about a million dollars positive through January. That is a million and a half better than budget and nearly $2 million better than where we were last year, year-to-date. So certainly a significant turnaround there, one that we're certainly happy about. Just within the month itself, volumes were... Up overall exceeding budget. We had another all-time high Over in PT which I think is what the third to dawn third or fourth month this fiscal year. I mean they are They are they are bursting at the seams and then certainly excited to get that construction project up and going Surgeries, we did miss budget, but we did improve from December. Highlighting that was
024Dr. Walter. He performed 22 surgeries in January, which is actually the first month that he exceeded 20, which was certainly over his budget, but so he's ramping up faster than anticipated. And we did launch the ROSA robot at the end of January, where I think it was the last week in January, did a couple cases. So that's been great to get that going as well. Emergency room continued to stay busy. We averaged 32 visits a day in January. So that's certainly good to see, which helped mitigate a little bit of a dip in MRI volumes. I did want to highlight and just kind of point out we did make a number of changes to the overall packet and just some of the corresponding schedules in the financials. I think one of the big ones Ed
025spoke to is that our margins now include parcel taxes. So just keep that in mind as you're looking through the report. And I do want to call out, Whitney, if you could go to attachment D2 for one second. This is something that Ed and I have been working on, but it's just kind of a summarized income statement where you actually can see we're actually bringing parcel tax revenue up above. Prior historically it's been a below the line item. So it has not been included in operating margin But here we're including up above as well as summarizing just some expense line items So I think our plan is that we're going to continue Reporting on this but if you guys have any feedback or input, please Please let us know. But just I think, you know,
026to sum up January, it was a great month in terms of financial performance. You know, a lot more work to be done, but I think we've got a really good foundation set and we've got some things in place to anticipate a really good second half of this fiscal year. So with that, I will stop and happy to answer any questions you all may have. They are and then what happens is so we will look Yep. Yep. So we we will accrue equally and then once the IGT actually gets paid is when we'll reconcile to the actual yeah I have a question crazy question maybe for you and Ed Do we have enough data or information to start doing scenario planning giving everything coming out of Washington DC or is that just an exercise that would
027just drive us crazy? I think I think we should assume status quo until we know definitively one way or the other that we should change I agree. Thanks. And I think we should, I know on the IGT side, I think Partnership should be giving their allotments to DHCS, I think, in the next month or so. So I do believe this year we should know sooner than we knew last year what those allotments are going to look like. And don't we have Partnership coming to the Finance Committee? Yes, or we have a member of the District Hospital Leadership Forum who certainly can speak at an expertise level to the IGT programs. So they're coming to this month's meeting? Correct, yep. I think I've asked this question before, but do we have a breakdown of the dollars
028that come to us, the IGT dollars? What percentage of the dollars come from state-sourced? funding versus federal sort even if the state's paying it but it's coming from the federal government do we have a delineation we do we do on on this particular program it is all federal it's all federal thank you all right anything else for ben all right yeah i was gonna say oh that's wrong answer yeah wrong answer um Ed, we have committee updates now on the agenda. We have the work plan shown on the screen. Do you want to cover both the recommendation of combining the committees and the charter? Sure. So over the past couple months, we've been talking about combining the audit committee with the finance committee, and the committee felt that was a good idea. So we did
029two things. One is we updated the charter. which is on the screen now, and incorporated into that the audit committee activities, which are highlighted in yellow. And then in red, we also kind of changed a few things and refocused a few things. But this charter is the one that, I'm sorry, this work plan, excuse me. This work plan is what we will follow in terms of, you know, kind of meeting focus for the remainder of the year. And what we want to be able to do with this focus is continue to emphasize looking forward activities as opposed to looking backward activities. So we want to spend less time talking about the, you know, what happened and more time about forecasting and, you know. things that we can perhaps provide value back to management with regarding
030ways that we can continue to improve the organization. So we do need approval of the work plan as highlighted by the inclusion. All in favor? Aye. And then the next item is the charter. Which was predominantly consistent with what we had previously for the Finance Committee and just incorporated the Audit Committee activities into the charter as well. And I think we added maybe a couple of different things with regards to security and, you know, which was put into the work plan. So we need approval of the charter. Motion to approve the charter. Second. All in favor? Aye. So the only comment I would make with regards to the charter is we currently have seven members on the committee and we have two openings. And we've talked about, you know, trying to get some diversity onto
031the committee and perhaps some people who might be working in the field, not necessarily financial experts, because we have a great committee in terms of financial expertise. So I've got a few names. Again, John and I are working on a couple things. And if anybody has names of people they'd like for us to consider, I'm going to start getting more into that during the months of March and April. But right now we have seven members, and we'll have nine meetings. That was another change. All right. Thanks, Ed. All right. Any comments? Oh, yes. Didn't we discuss the possibility of moving our meetings to 5 o'clock? Yes, beginning next month we will be moving our meetings to 5 o'clock. And I apologize for asking Wendy to keep this one at 6 because I had made a
032commitment here in Asheville at a dinner that I was being recognized at that would have made it impossible for me to be there at 5. Well, congratulations on your recognition. All right. I'll be happy tomorrow. All right. Thank you. Okay. Would you like to do that? Meeting adjourned.