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Serving Northern St. Louis County, Minnesota

Hospital district proposes levy increase


ORR— A proposed increase in the Cook-Orr Hospital District levy was an unexpected addition to the city council agenda here on Monday night. Barb Johnson, Orr’s representative on the 15-member hospital district board, told the council that the board is considering a $100,000 increase in the district’s levy effective for next year.

Under the proposal, $95,000 of the increase will go toward hospital operations, $4,000 would be earmarked for the local ambulance services, and $1,000 would be added to the district’s capital levy.

The hospital levied a total of $1.39 million in 2019, so the increase would amount to seven percent overall. But the levy would boost the portion of the levy dedicated to cover operating costs at the hospital from the $218,000 levied this year to $313,000 next year— an increase of 43 percent.

In addition to the operational assessment, the hospital district currently levies $300,000 annually for the nursing home, $724,000 for capital improvements, and $148,000 for area ambulance services.

Hospital Director Teresa Debevec said it’s been at least five years since the district has seen a levy increase and the hospital has recently experienced a decline in revenue for its imaging services, among other areas. The installation of a new CT scan and new X-ray machine did require some down time as the work was completed, but Debevec said that does not appear to have contributed significantly to the lower revenues.

Recent retirements and relocations of some long-time physicians, who have not all been replaced by the adjacent Scenic Rivers Clinic, may be playing a role in the lower demand for some patient services, said Liz Dahl, who chairs the hospital district board. In addition, said Dahl, Blue Cross has been more aggressive in requiring pre-approval for some hospital services, which is affecting utilization. “Right now, they’re standing between the doctor and the patient in some cases,” she said.

The hospital is also facing higher costs due to the ongoing worker shortage, notes Dahl. She said the hospital has had to increasingly rely on agency staffing to operate imaging equipment and provide certified nursing assistants in the care center. “That’s much more expensive than hiring our own people, even full-time employees with benefits,” said Dahl, who noted that anywhere from 6-10 agency people are working at the hospital at any given time. She said hospitals across the state are struggling with workforce issues right now.

Debevec said she hopes to have a more definitive analysis for the hospital board at their Aug. 27 meeting. That’s when the board expects to make a final decision on the proposed levy increase.

Debevec said the board wanted to get word out to communities within the district ahead of time to give time for feedback ahead of the final vote. The board has the authority to increase its levy without a public referendum. Even so, Dahl said the levy increase is something the board is considering only reluctantly. “We really take the taxpayers’ burden seriously. This is done with a heavy heart, but we don’t want to see our hospital close,” she said.

According to information developed by the hospital district, the proposed levy increase would boost property taxes on a $100,000 homesteaded property by $9.90 next year. A $500,000 homesteaded property would see taxes rise by $49.51.

No estimate of the impact on commercial properties was available as of this week.


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