OCEAN CITY — The Ocean City Mayor and Council appears to have softened its position on a special appropriations request from Atlantic General Hospital (AGH), but it also appears the hospital will not be getting the requested funding immediately.
During budget wrap-up sessions this spring, the Mayor and Council had a lengthy debate about the town’s policy regarding supplemental contributions to various non-profit organizations and other entities that provide services to Ocean City and the entire county. Some requests were granted and some weren’t, including a $200,000 request from AGH in the form of a supplemental grant for the hospital.
The town’s elected officials vowed to revisit the grant requested by AGH when it embarked on a major strategic planning initiative this fall. However, during Tuesday’s meeting, Budget Director Jennie Knapp presented a second budget amendment for fiscal year 2017 that showed a net gain of about $300,000 in fund balance after anticipated revenues were weighed against expected expenditures.
Council Secretary Mary Knight took the opportunity to revisit the grant request from AGH. Knight said in the weeks since the budget discussions, she asked City Manager Doug Miller to look for quantifiable numbers showing how AGH’s close proximity saves the resort money.
“During budget time, we talked a lot about special appropriations,” she said. “We talked a lot about Atlantic General Hospital and aside from reaping the obvious benefits of having a community hospital here, I asked the city manager if there are any quantifiable numbers on how the hospital saves us money.”
Knight said City Manager Doug Miller explored different data on how AGH directly saves Ocean City money and came up with some interesting statistics. For example, of the roughly 3,000 ambulance runs out of Ocean City in 2016, about 90 percent went to AGH and nine percent went to Peninsula Regional Medical Center (PRMC). AGH is just 10 miles from Ocean City, while PRMC is about 30 miles away. Thus, the typical turnaround time for an ambulance run to AGH is about 30 minutes, while a run to PRMC can go as high as two hours.
The result is a substantial savings in fuel costs. In addition, Knight pointed out the amortization of the town’s ambulance and emergency fleet is around 10 years, but if AGH didn’t exist and all of the runs went to PRMC, that number would be reduced to five years. She said the quantifiable number for cost savings for Ocean City because of AGH comes to around $275,000 per year. In addition, fuel cost savings come in at over $18,000 per year.
Knight also pointed out there were other obvious savings with having AGH just 10 miles away from an emergency services and paramedic staffing standpoint, but the numbers weren’t as easily quantifiable.
“From an operational standpoint, how many more units would we need?” she said. “Obviously, if the ambulance runs routinely took two hours round trip, we wouldn’t be able to give the same level of service at four minutes. That was too difficult to quantify based on seasonality and other things, but a local person knows we would need more crews.”
After reviewing the numbers, Knight made a motion to fund AGH at $100,000 in the current budget based on the second budget amendment presented on Tuesday.
“I’m asking for consideration of a grant to AGH for $100,000,” she said. “I’m not asking for a four-year commitment at $250,000 like they requested. I’m just asking to fund AGH at $100,000 this year and have them come back to us every year with a renewed request.”
Councilman Wayne Hartman said he still had reservations about some of the special appropriation requests and that entire process, but had changed his position on the AGH grant after speaking with AGH President and CEO Michael Franklin during the health fair in Ocean City shortly after budget deliberations.
“When you look at the actual money it saves us, I just think the $100,000 goes to show our support for the hospital,” he said. “We had a successful year and I think we can share that success with them. If they weren’t here, our costs would be much greater. When you look at 2,700 ambulance runs, it’s just a huge difference.”
However, while he agreed with the hospital’s financial impact on Ocean City, Councilman John Gehrig questioned if Tuesday was the right time and place to reconsider the grant to AGH.
“I think this probably deserves its own agenda item,” he said. “I think everyone supports the hospital and appreciates it. They have a lot of projects going on. You specifically cited the ambulance service and the emergency room. Would we be targeting these funds for specific projects?”
Knight said the $100,000 grant she was proposing would be open-ended and used at the hospital’s discretion.
“I know they are developing a cancer center and an imaging center, but I think that should be up to them,” she said. “What I’m saying is how much it saves us annually to have a hospital so close. I’m not for telling them what we want them to do with the money, only that they keep growing and making it a better place for all of us.”
Knight said leaving AGH out of the special appropriations list at the close of budget work sessions had been gnawing at her in the weeks since.
“It’s just a suggestion,” she said. “It’s been bothering me so much that we weren’t able to fund the hospital. I was waiting to see what the numbers looked like before bringing this up.”
Gehrig agreed the town’s contribution to AGH should be revisited, but reiterated there was likely a more appropriate time to do so. He pointed at the pending financial strategic planning sessions in September during which priorities will be established and spending decisions will be made.
“I thought we talked about making this part of our financial strategic planning,” he said. “I thought we had a plan in place for this and we weren’t shunning the hospital. Now, all of the sudden it’s before us. Nobody is anti-hospital, but this is coming out of the blue. I just don’t know if today is the day for this.”
Council President Lloyd Martin agreed.
“I agree with John this should be part of our financial strategic planning,” he said. “We need to figure out what we’re doing and what our priorities are and do this at the right time.”
Councilman Tony DeLuca also agreed the more appropriate time to discuss the grant to AGH is later rather than sooner.
“I certainly support both sides and the directions they are going with this, but I have to agree with John,” he said. “We have maintained a discipline as a council on many requests. This is August and our strategic planning sessions are set for September. We have to make sure we do this right and prioritize.”
Mayor Rick Meehan said he saw both sides of the discussion, but agreed the AGH grant should be part of the larger financial planning discussions.
“I think everybody is right on this one,” he said. “I also think consistency is important and I think this would best be part of the overall discussion on strategic planning. It appears to me when the decision is made, we’re going to be financially supporting AGH. I think that’s what the citizens want and I think that’s what this council wants.”
Knight ultimately removed her motion and Hartman removed his second after it became apparent the votes weren’t there to grant AGH the $100,000 special appropriation on Tuesday. Knight said at least the discussion brought the issue back to the forefront.
“I’m glad we started this conversation,” she said. “I just thought this was the opportune time because I view this as an operating expense. I saw the good results and I thought it was perfect. I didn’t want to upset anybody but I’m glad we had the conversation and I look forward to it during strategic planning.”