WILLMAR -- The finance committee of the Rice Memorial Hospital Board next week will recommend to the full board a 2007 budget of $94 million.
The recommendation, which was adopted by the finance committee at a meeting Thursday, also calls for a 5 percent rate increase.
The full hospital board is expected to take action at its meeting this coming Wednesday.
The budget will then be forwarded to the Willmar City Council for final approval Nov. 27.
Hospital officials have crafted a budget that they believe will help improve the city-owned hospital's lagging financial performance.
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The hospital lost money last year but may come close to breaking even this year, said Bill Fenske, chief financial officer.
"We're optimistic. We did have a profitable September," he said.
For 2007, a $1.2 million profit is projected, he said. "That equates to about a 1.2 percent net margin."
Hospital officials don't plan any staff layoffs or changes in services. Instead, their goal is to achieve a balanced budget through careful spending and improved operating efficiencies.
The hospital's 700-some employees also will receive pay increases next year, after enduring a wage freeze this year.
Overall operating expenses will rise 3.5 percent next year, reflecting salary costs, higher costs for supplies and general inflation, Fenske said.
Meanwhile, patient volume is expected to remain flat.
"It's doable. We just have to keep our nose to the grindstone," Fenske said.
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The budget also includes $5.2 million in capital expenditures. No big-ticket purchases are planned; most of the money will be spent on routine replacement of equipment.
