SEBASTOPOL -- The Palm Drive Healthcare District, which oversees the financially beleaguered Palm Drive Hospital, will hold a meeting tonight to determine whether Sebastopol can continue to support the hospital as it suffers from ongoing losses and dwindling patient volumes.

The district board is set to consider two measures that may or may not save the ailing facility, long beset by financial woes that have been exacerbated by a confluence of factors, among them plummeting patient volumes and a more challenging landscape under health care reform for small district hospitals, officials have said.

One resolution district officials are considering is "pertaining to substantial termination of services and closure of the emergency department." The second is a declaring a "fiscal emergency."

It's not yet clear what would happen if those resolutions are passed, and hospital officials are working to come up with plans that might keep the facility afloat.

"The answer is we're still working with the state Department of Health Services, because we plan to continue be a relevant and sustainable operation for this county in providing health care services," Chief Executive Officer Tom Harlan said.

One of the biggest challenges is keeping open the acute-care portion of the hospital, which is licensed for 37 beds but has been staffed for 12 beds to offset lower-than-hoped-for patient volume, he said. In order to operate an emergency department, a hospital is required by the state to have an acute care operation. Mr. Harlan added that it's increasingly difficult to sustain that portion, given the steep losses the hospital is facing.

The hospital in January reported a loss of $356,200, while through the fiscal year, ending July 1, it has lost more than $1 million.

"Acute inpatient care inside is creating the biggest problem," he said. "Without an inpatient hospital, we can't have an emergency department. That's the primary issue, and the most difficult for us because when we were looking at operating inside, we really modeled everything off of the emergency room, which is huge public benefit."

Sebastopol residents have expressed support for having a local emergency room, but it's difficult with Santa Rosa -- and its three major hospitals -- a mere eight miles away, Mr. Harlan said. Accordingly, closure of the emergency department would be a huge blow to overall hospital operations.

"There are a number of unanswered questions, but we do have a plan that's under development to take care of the wind down," Mr. Harlan said.

Chris Dawson, chair of district board, said Palm Drive needs to plan quickly for whatever the outcome may be.

"The board is really focused on making this transition -- what's the next chapter for a real viable health care service?" Mr. Dawson said. "That's what we're going to get to very fast."

California Nurses Association/National Nurses United on Tuesday afternoon condemned any plans to close the hospital, claiming it "threatens to abandon tens of thousands of seniors and western Sonoma County residents."

The union said registered nurses who work at Palm Drive plan to speak at the meeting in protest of reduced services.

"Closing Palm Drive would put at risk many of these patients, who are typically not as mobile and in a county with inadequate public transportation," said Deborah Burger, RN, co-president of the labor group and a western Sonoma County resident. "These patients will have a much harder time traveling the distance to get to hospitals farther east."

The nurses union said Office of Statewide Health Planning and Development data suggest Santa Rosa hospitals treat fewer seniors than Palm Drive does. Medicare patients accounted for nearly 60 percent of patients at Palm Drive, 45 percent at Santa Rosa Memorial Hospital, 35 percent at Kaiser Permanente Medical Center and 29 percent at Sutter Medical Center of Santa Rosa. The national average was 40 percent.

News of the dire-sounding resolutions comes less than a week after the hospital said it notified all 242 employees of possible layoffs of 50 or positions.

The layoffs and work reductions earlier this year impacted 40 employees, 10 of whom were laid off permanently and the remaining being shifted to part-time. All told, that amounted to the equivalent of 20-full time positions being eliminated.

The hospital has averaged roughly nine patients per day.

It's not the first time Palm Drive has faced dire financial straits. In 2010, the hospital emerged from Bankruptcy Court protection from creditors after selling $11 million in bonds. It sought Chapter 9 protection three years earlier. That effort came after the hospital was contending with nearly $6 million in annual operating losses.

After exiting bankruptcy, officials made number efforts to make Palm Drive viable in the competitive North Bay health care sector, which is only getting more competitive with the $284 million brand new Sutter Health facility in northern Santa Rosa, expected to open later this year. Palm Drive entered into an affiliation with Marin General and Sonoma Valley hospitals, both run by districts, as a means to share centralized services in the hopes of reduced costs and increases services.

This story was updated from the original version published March 31, 5:08 p.m.