This Friday, the State Appeal board will be meeting at the Iowa Department of Management conference room, G14 in the Iowa State Capital. The appeal for the Hamilton Hospital/dba Van Diest Medical Center capital improvements levy will be considered during this meeting.

The meeting, which begins at noon, is available via Microsoft Teams. There is limited seating for in-person access, and there is no discussion with the public.

The three members of the State Appeal board, Kraig Paulsen, Director of the Dept. of Management, Rob Sand, Auditor of State and Roby Smith, Treasurer of State will at that time listen to budget protest recommendations provided by the hearing panel who attended the public hearing. The public hearing in Webster City was held on June 9.

The meeting was conducted by Joseph Barry, who served as the hearing officer. Barry and Carrie Johnson were there to represent the Iowa Department of Management. Also representing board members were Jenny Wall, who was there from the State Auditors office and Ed Failor who represented the state treasurers office.

Two other communities have budget protests on the agenda first. The Perry Community School District and City of Mitchellville will be heard prior to the Hamilton County Hospital.

When the public hearing was held in Webster City at the Hamilton County Courthouse, the representatives for the State Appeals board heard presentations representing the petitioners in addition to a response from the hospital administration.

During the initial presentation, a document prepared on behalf of the petitioners was given to the representatives explaining their petition. The presentation, was given by Jake Van Diest and Dave Taylor.

Their opening is as follows:

‘We agree that Van Diest Medical Center (VDMC) should continue to provide all the services our community needs. We are glad VDMC is in Hamilton County and are appreciative of their work. Our points are that we do not believe a tax levy is necessary for VDMC to operate and the VDMC board and management do not have an objective rationale for calculating the property tax levy each year.”

Their points summarized here include these:

The VDMC budget projects an increase in the general fund balance of $11,482,273 without any additional levy.

The property tax levy increased in FY 2014 to fund the construction of the new hospital. This did not change until this past spring, when 400 local taxpayers presented a petition to significantly reduce or eliminate the tax levy.

The final long-term debt on the hospital construction is fully paid on June 30, 2026. This will create approximately $1,800,000 of improved free cash flow annually. The reduction of the tax levy of .20 center/thousand will be $100,000.

As of April 30, 2026, the hospital has cash and investments on hand in the amount of $35,015,798.

Daily operating expenses are $135,900.04. The current cash and investments on hand represent 258 days of expenses. The benchmark for days cash on hand in the Critical Access Hospital Measurement and performance assessment system as of May 1, 2025 is 80 days.

In their response, the Lisa Ridge, Chief Executive Officer and Ashley Allers Chief Financial Officer made a presentation to board representatives also in a document with this opening statement:

“The hospital respectfully submits this response to the protest filed pursuant to Iowa Code 24.27. The protest asserts that the proposed levy is excessive and unsupported; however, these assertions are not consistent with industry financial standards, statutory requirements or the hospital’s current operating environment. Based on applicable law, historical levy practices and documented financial conditions, the proposed levy is reasonable, necessary and fully compliant with Iowa law.”

The following is a partial summary of the points that the hospital administrators made in a document that included many graphs and charts.

The hospital agreed that they have over $35 million in reserve presently, but that their daily opening expenses have risen to $135,900 per day, which is an annual increase of more than $4.7 million. Approximately $13.7 million is board designated or otherwise committed to essential capital and infrastructure needs, including facility maintenance, safety improvements and clinical capacity upgrades.

While the retirement of long-term debt will improve annual cash flow, this benefit is limited in the near term by ongoing depreciation expense and continued escalation in operating costs.

The hospital developed a master facility plan in 2023 identifying key areas where upgrades and remodel are necessary to support recent growth of services and required infrastructure updates are necessary to stay compliant with regulations and patient safety.

The hospital has access to additional revenue sources; Medicaid (DPP), Iowa’s Directed Payment Programs, and CMS can deny renewals required redesign and cap payment levels differently each year.

Even though the hospital appears to be operating favorable, that is not guaranteed. The hospital continues to lose money on the ambulance service and uncompensated care.

The documents submitted to the state appeal board both included charts and additional commentary as part of their arguments.

The results of the meeting will be provided in writing to the two parties represented. Those who would like to listen to the recommendations presented can do so by using Microsoft teams, with the meeting ID of 27696503317361, passcode is fp3an2Rx.