FMC Board of Trustees Meeting – June 2023

FALLON MEDICAL COMPLEX, Inc.

BOARD OF TRUSTEES MEETING

Wednesday, June 7, 2023

MEMBERS PRESENT                                           ABSENT                              

Doug Varner, Board President                              Evelyn Neary, Secretary

Curt Arnell, Vice President                        

Alice Kay Schweigert, Board Member

Elaine Stanhope, Board Member

David Kirschten, Board Member

OTHERS PRESENT                      

David Espeland, CEO

Marjorie Losing, CFO

Marissa Gundlach, Recorder

1. CALL TO ORDER

Doug called the meeting of the FMC Board of Trustees to order at 5:30 p.m. in the FMC Community Room. 

1. – There was no public input.

1. APPROVAL OF MINUTES

No additions or corrections to the May 3, 2023 board minutes as distributed. Elaine moved to approve the minutes. Curt seconded. Minutes stand approved as written. All ayes. 0 nays.

1. 6:00 p.m. – Board Education from Stewart Kirkpatrick, Attorney

Stewart and his associates focused their presentation on the interrelationship between governance and operations,regarding the legal obligations of being a non-profit trustee.  As long as the board members meet their obligations as identified within the articles of incorporation, bylaws, and Montana law, then they have immunity. They open themselves up to personal liability if they perform outside of that scope. Stewart went into great detail explaining the Board’s responsibility of governance, as well as their operational oversight (versus the CEO’s responsibilities) as it relates to FMC’s bylaws and Montana non-profit corporation law. He explained that the FMC bylaws clearly state that the board shall allow the CEO to manage the day-to-day operations of the facility and remain deferential to the CEO’s actions.  Stewart further outlined two primary recourses for the Board to take if they feel the CEO is not performing in the manner of which they would like: a) look at the employment relationship with the CEO, or b) amend and restate the by-laws to pull back some authority from the CEO. The Board is supposed to be focused on high-level strategy, oversight, and accountablity.  He further explained in great detail the difference between policy and management and how each pertains to the Board and CEO. For instance, the Board is charged with making decisions that help determine procedures, activitivies, programs and services that affect the entire organization, as well as decisions required by law.  Stewart emphasized that the attorney’s responsibility is to the Board, not the CEO.

• FINANCIALS

1. IntraFi Network Deposits: Margie presented to the board the IntraFi Network Deposits program through the Bank of Baker. This program would diversify FMC’s cash deposits, distributing them to multiple banks across the nation in order to keep any single deposit under the FDIC threashold of $250,000. Discussion occurred as to the details of the program. Elaine moved to enroll in the IntraFi program under the money market account through the Bank of Baker. David K. seconded. 6 ayes. 0 nays. Margie further explained our long-standing HRON funds endowment and where those funds came from (Helen Hron). We were recently sent a notice from Wells Fargo stating that the HRON CD was due to expire.  Discussion was held about where to invest or move the funds. David Kirschten made a motion to move the $19,000 HRON fund CD from Wells Fargo to Grasslands Federal Credit Union. Alice Kay seconded. 6 ayes. 0 nays.

• FY2024 Budget Review: Marjorie went over the FY2024 Budget with the Board of Trustees in detail. She reported that the statistics budget was predicated on the last three years’ average in most departments. An average was used because FY2021 was a very busy year, FY2022 was an average year, and FY2023 was a very slow year. The revenue budget is predicated on an 11% overall increase, keeping price transparency in mind and staying within our market’s price range. The Wage and Salary Budget was then reviewed in detail with the Board of Trustees, as was the expense budget.  The budget bottom line showed an anticipated significant operating loss for FY2024.  Four options for mitigating that loss were presented to the board.  The board discussed the various options and the impact they would have on the budget and the employees. Elaine moved to approve a “Modified Option 4” based on board-directed revisions for the FY2024 budget. Alice Kay seconded. All ayes. 0 nays. (Enclosures)

Margie presented the April financials to the Board of Trustees. April was a very slow month with 6 IP days and 7 Skilled Days. Gross Revenue for the month of April was $684,391 while the budgeted amount was $917,029. Other revenue was $123,000; $117,000 was our OP HUF Payment. Net Operating Revenue was $788,828 while the budgeted amount was $908,582. Expenses for the month of April were $978,523 while the budgeted amount was $1,037,852. There is a new line item titled Investment Fees; Margie was advised by John Hauck to track the fees we are paying for our investment account separately. We are still seeing a large budget variance for contract labor mostly due to Thrive implementation. Operating Loss was ($189,695) while the budgeted amount ($129,270). Net Loss was ($98,252) while the budgeted amount was ($95,663). (Enclosure)

• OLD BUSINESS

1. Tylyn Bova, NP Update: Tylyn has vocalized that FMC is her choice for employment, however, due to personal reasons, is still having difficulty accepting our offer and moving to Montana; she anticipates late August, if not later. Further discussion arose in regards to a plan for staffing the clinic.

• Trustee Appointment: The board moved this agenda item up the list to be discussed after the approval of the minutes. David Kirschten moved to accept Erin Lutts to fill the remainder of Betty Mueller’s term. Elaine seconded. 4 ayes. 0 nays.

• Corporate By-Laws Review: This agenda item was postponed until next meeting due to the majority of the current meeting being spent on the budget.
  
  
• NEW BUSINESS

1. Physical Therapist Contract Renewal: Discussion amongst the board occurred about the upcoming contract renewal for a PT provider. David K. moved to offer the provider a two-year renewal agreement at a prorated wage and prorated benefits due to a request for shorter work weeks. Erin Lutts seconded. 4 ayes. 2 nays.

The Board adjourned their regular session having completed the agenda.

s\ Doug Varner, President

s\ Marissa Gundlach, Recorder