QUINCY - Board members for the Quincy Valley Medical Center are considering offering a maintenance and operations levy request to district voters. If hospital officials decide on an M&O levy, the proposition could go to voters sometime this year.

The hospital has been struggling with operating capital and cash flow, and the Washington Auditor's Office expressed concern about the hospital's financial situation in the annual audit report released March 27. The district has been using interest-bearing warrants when it doesn't have enough cash on hand to meet its obligations.

Warrants are issued by Grant County when a junior taxing district is short on cash, and the district pays the warrants back with interest. But Quincy hospital has experienced trouble redeeming all its warrants. The audit report found that the district owed Grant County about $3.5 million at the end of 2013.

Michele Wurl, the hospital's director of marketing and public relations, said nothing has been decided yet. "Our goal has always been, and continues to be, to pay down the debt owed to the county. A possible M&O levy is being looked at as one of our options," Wurl said.

The Grant County Auditor's Office said the proposal would have to receive 60 percent of the vote to pass. All revenue measures must receive 60 percent to pass, except school M&O levies.

Hospital officials are working on a "multifaceted approach to addressing the revenue and financial issues facing the facility," Wurl said. The hospital has been working on controlling costs, she said, and regularly assesses services. Hospital officials also are working with a local accountant and some of the hospital's lenders to get lower interest rates on existing obligations, she said.

"The hospital continues to treat more patients every year. Unfortunately the charity care and bad debt expense percentages continue to grow significantly because many patients don't or can't pay for the care," Chief Executive Officer Mehdi Merred said. The hospital had $1.7 million in bad debt and charity care in 2013, about 12 percent of gross revenue, he said.

The Quincy area is growing and the hospital has received more money in property tax revenues, Wurl said. But "over the last three years, the increase in our property taxes has not kept pace with the increase in the hospital's bad debt," she said.

Wurl said district officials are still working on a comprehensive plan, and there's no date set for its presentation to district patrons.