A special $1 million item in the state Legislature's budget could give Auburn Memorial Hospital a needed shot in the arm for a return to fiscal health.

State Sen. Michael F. Nozzolio, R-Fayette, and Assemblyman Gary Finch, R-Springport, said Wednesday, the 2006-07 state budget includes special funding for the hospital to cover operational expenses as well as capital and equipment improvements.

“It's outside the normal funding stream,” said George Fearon, who chairs the county Legislature and is working with the hospital to stabilize its finances. Bob Bergan, president of the hospital's board of trustees, said that while the facility's initial appeal to state leaders for special funds exceeded $1 million, the money secured still demonstrated the political will behind turning the hospital's fiscal troubles around, and makes a broad statement to the larger community about Auburn Memorial's integral role in Cayuga County.

“It says this hospital is a good investment,” he said.

The funds will go toward helping upgrade equipment and surgical facilities, as well as support efficiencies in cataract surgery, urology and anesthesia.

Over the last several months, the hospital's financial woes led to the closing of its Scipio community clinic, as well as numerous service and job cuts.

County officials have been involved with the hospital's finances over the years, most recently since last spring.

In the latest move to help shake Auburn Memorial free from its fiscal problems, the county helped bring a financial consulting company - Wellspring Partners - to examine its operations from top to bottom, and ultimately make specific recommendations.

While the hospital is several weeks away from reviewing and implementing Wellspring's final recommendations, administrators said the board is prepared to act on whatever suggestions the company has.

“We have a very engaged board of trustees, who are committed to carrying out the recommendations,” Fearon said.

In the meantime, hospital administrators said while the $1 million would go toward facility upgrades and new equipment, they also saw the additional money as an investment toward boosting medical staff at Auburn Memorial.

“There's a relationship (between) capital equipment projects and improving the hospital's overall financial condition,” said AMH administrator Brendan McGrath, adding that the hospital is looking to recruit surgeons.

Both Bergan and McGrath said that Auburn Memorial had submitted an extensive list to the state and local legislators, enumerating items of importance to the hospital, like a new CT scanner. Nozzolio said that he began meeting with administrators 30 days ago.

“It was apparent that we needed to act as quickly as possible to help the facility,” Nozzolio said.

“We have an old scanner, and it's important for us to obtain an up-to-date scanner - that is very expensive,” Bergan said. “We are also interested in upgrading our operating rooms, now called surgical suites. And so some of the funds I believe will be used to upgrade them.”

While McGrath said the hospital's replacement needs for capital equipment would cost $3 million, he was grateful for the proposed $1 million.

“This is a wonderful head start,” he said.

Staff writer Olivia Goldberg can be reached at 253-5311 ext. 235 or olivia.goldberg@lee.net