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Finance committee preliminarily approves FY26 budget proposal and $66 million city subsidy request
Summary
The Hospital Authority Finance Committee voted to preliminarily approve the fiscal year 2026 budget package and to submit a $66,000,000 subsidy request to the city; the budget reflects conservative growth assumptions, reductions in contract labor and a projected decrease in overall expenses versus FY25 trajectory.
The Hospital Authority Finance Committee approved a preliminary fiscal year 2026 budget and authorized staff to present the request to the city on the city—udget schedule. The committee vote approved a proposed subsidy request of $66,000,000.
Dr. Blackledge, who presented the budget materials, said the FY26 proposal began with FY25 actuals and a six-month run-rate projection, then applied growth and expense assumptions. He described four growth categories used in a five-year planning model and said the committee's materials apply a 2% general growth assumption in some revenue lines and a 25% projected increase in clinic visits over the planning horizon as a result of outreach and marketing initiatives.
Blackledge summarized several expense decisions in the packet: modest reductions in salaries compared with the FY25 projection, a targeted reduction in contract labor (carved out approximately $5,000,000 from run rate), and increased supply and pharmacy budgets reflecting national cost pressures. He said the proposed budget reduces the current trajectory by about $6,000,000.
Committee members questioned growth and conservative assumptions. One member asked whether the 2% growth factor seemed low and suggested using 5% in some lines. Another member (who reviews operational detail) noted conservatism in projections and that several operational areas are already performing above budget year to date (for example, med-surg visits and outpatient cases were reported as above budget in prior months).
Blackledge reviewed other revenue drivers discussed in the packet: collections improvements added $1,700,000 to the revenue projection, and the budget request for city subsidy was listed at $66,000,000 (last year the authority requested $64,000,000 and received $59,000,000). He also noted a metro indirect expense that is deducted from the subsidy and that the hospital will present to the city next Wednesday pending committee approval.
The chair called for a motion to preliminarily approve the FY26 budget and submit the $66,000,000 request; the committee moved, seconded and voted "Aye." The motion passed.
Ending: The finance committee approved the preliminary FY26 budget and authorized staff to present the budget and a $66,000,000 subsidy request to the city's budget process. Staff will refine assumptions and return with final budget documents for subsequent approval.
