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Published on 08/24/1998 All articles from this issue

El Camino Hospital adopts new financial policy

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By Carol Tiegs

Special to the Town Crier

The El Camino Hospital District adopted a new financial policy at its Aug. 12 meeting. These policies set forth financial guidelines to enable the district "to maintain its financial strength and provide financial resources to accomplish its goals," said Marla Gularte, the district's chief financial officer.

According to the policy, these goals include allowing for growth into new programs and services that respond to community needs while supporting the district's strategic plan and mission; providing necessary funding for "revitalization of facilities and equipment; and maintaining an A-plus bond rating in order to minimize interest expense when borrowing."

The policy targets a 7 percent annual return on equity. It calls for funding depreciation at replacement cost and maintaining a 60-day operations reserve fund.

The policy states that the district "will not use more than 40 percent debt to finance its future needs."

Board Chairman Paul Hoar called the policy a "mighty conservative approach."

Richard Warren, hospital administrator and district CEO, said he was "very impressed with (the policy). I have never used anything like it before. It will aid the board in exercising its fiduciary responsibility."