PORT ANGELES — Olympic Medical Center commissioners reviewed a draft of the 2026 budget that hospital leaders said showed a positive cash flow for the first time in several years while still projecting an overall loss of about $7.5 million.
The presentation by interim CEO Mark Gregson and interim CFO Dennis Stillman on Wednesday outlined a budget that aimed to turn around the hospital, which is anticipated to lose $16 million this year.
“The bottom line is, it’s a cash flow-positive budget,” Gregson said, not a break-even budget, although that is the eventual goal.
Revenues are projected at $293.9 million next year, with expenses of $301.8 million, leaving a $7.4 million operating deficit. When adding back $16.4 million in depreciation, the hospital would achieve $8.9 million in positive cash flow.
Stillman said the positive cash flow would allow OMC to pay $3.2 million for capital improvements, $2.3 million toward principal debt and $3.3 million toward accounts payable.
“This gets us started on that pathway that gets the ship turning in the right direction,” Stillman said.
Commissioner Phil Giuntoli said that, while he understood the reasons behind the proposal for a negative budget, he questioned why a more accelerated approach could not be considered. The community is frustrated with the hospital’s continuing losses, he said.
“At some point, we have to stop taking baby steps and actually confront the reality of our situation,” he said.
Imposing a break-even budget within a limited time period would be challenging and detrimental to OMC, Stillman said, and it would inevitably mean staff cuts.
“You’re really getting down to the only things you can really manage in a short period of time, that is labor and supply costs,” he said.
Stillman the budget is not set in stone.
“There’s no reason why we can’t come back each month and update it for you,” he said.
Commissioner Tom Oblak said he supported the plan’s flexibility and measured approach.
“We need to head in a new direction,” he said. “We need to be doing some things differently, but you don’t do it overnight.”
Gregson said he would return with a revised draft budget at the board’s next meeting at 6 p.m. Nov. 19 for its final approval.
Potential partnership
Gregson said OMC and UW Medicine are actively continuing discussions about a potential partnership.
In the meantime, the two agencies are revising their letter of intent to extending the timeline outlined in their original agreement dated Sept. 3, which called for a three-month period to develop strategic and operational recommendations based on a consultant’s report, and to reach an agreement about an affiliation model.
The updated letter would be presented to the board for its approval.
10-year lease
The board unanimously agreed to a 10-year lease with Shore Aquatic Center for an OMC property at 216 E. Fourth St., which is the former Port Angeles School District administration building.
Gregson said although the rent was only $100 per month, Shore Aquatic Center is investing proceeds from a $750,000 grant to renovate the building.
Commissioner Penney Sanders suggested that, looking ahead, it might benefit both parties if the hospital sells the property to the center.
“We’re not using it, and they can really use it,” she said. “So maybe have that conversation.”
Gregson said something could be included in the agreement that leaves an opening for OMC to consider a sale.
No recordings online
Despite community feedback and public commenters encouraging OMC to do so, commissioners meetings will continue to be streamed live, but recordings will not be posted online. State law does not require it do so so.
Gregson said — and commissioners agreed — that there is a possibility of someone manipulating the recordings, amid other risks.
Board meeting minutes and some materials will remain available online, he said.
According to RCW 42.30.220, “Public agencies are encouraged to make an audio or video recording of, or to provide an online streaming option for, all regular meetings of its governing body, and to make recordings of these meetings available online for a minimum of six months.”
________
Reporter Paula Hunt can be reached by email at paula.hunt@peninsuladailynews.com.
