Sep. 12 -- FOSSTON -- A northwest Minnesota community will continue its efforts to take control of its hospital, the town's mayor says, after an arbitration panel earlier this week ruled that Essentia Health can continue to operate the facility.

Fosston Mayor Jim Offerdahl said that even with the panel's 2-1 ruling, he doesn't believe the issue is resolved.

"The fact that it was not unanimous indicates that the city's position has been validated," he said.

The issue revolves around Essentia's decision to relocate labor and delivery services from Essentia Health-Fosston to Essentia Health St. Mary's-Detroit Lakes. The city disputed the decision, saying it breached a 2009 affiliation agreement between the provider and the city. The city believes labor and delivery services are a core service at the hospital.

Since at least January, Offerdahl and residents voiced disappointment with the decision. The First Care Taskforce -- created by the city and the hospital's owner, First Care Medical Services -- then sought to take over management of the hospital.

In a letter to Essentia earlier this year, Offerdahl said "the Fosston community does not want Essentia Health to stay."

But the panel's ruling Tuesday means Essentia is permitted to continue operating the hospital, clinic, assisted-living and long-term care facilities in town, as well as clinics in Bagley and Oklee.

Offerdahl's statement sent to the Grand Forks Herald was from a Wednesday interview he gave to a Fosston-area radio station. In it, he clarified that Essentia is still held to the affiliation agreement, and that First Care Medical Services is still the owner of the hospital, assisted-living and long-term care facilities, as well as the Bagley clinic.

"We will have further information after discussions next week with our consultants and legal team on what our next steps will be," he said. "But, I will say the taskforce is committed to restoring local decision-making at the Fosston hospital."