Board OKs TMH budget with decreased projected profits

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TMH budgets

• 2009 :$22,847,370 (Total revenue), $20,573,699 (Total expenses), $2,273,671 (Profit)

• 2008:$20,774,370 (Total revenue), $18,034,079 (Total expenses), $2,740,291 (Profit)

— A budget process that began in September 2008 ended Thursday night for The Memorial Hospital.

In a special meeting, the hospital board unanimously approved, 5-0, its 2009 budget.

The budget will now be submitted to the Moffat County Commission for final approval.

Tinneal Gerber, Moffat County budget analyst, said the commission would vote on the submitted budgets at its Jan. 20 meeting.

Barry Bergman, TMH chief financial officer, said the budget projects higher revenues this year than last, a not so easy feat given the current state of the national economy.

"I would say what's remarkable about this, is in the face of (an economic downturn) we are still going to project higher revenues than 2008," Bergman said.

The budget was built using a "conservative" approach, the CFO told the board Thursday.

Projected total revenue in 2009, according to the approved budget, is $22.8 million. A year ago, that figure was $20.7.

Hospital officials reached the total revenue figure by estimating $32.8 million this year in gross patient revenue, a figure that includes inpatient and outpatient charges. The budget also anticipates $11.6 million in deductions from contractual adjustments, charity care and bad debt.

That leaves an estimated $21.2 in net patient revenue. Add to that $1.6 million through budget items listed as other operating revenue, county support and other non-operating revenue, and the $22.8 revenue figure is reached.

However, while the budget projects higher revenues in 2009 than 2008, it also estimates more expenses.

The hospital projects expenses to increase by about $2.5 million in 2009 from 2008. Expenses are estimated at $20.5 million this year; last year they were budgeted at about $18 million.

Major expenses for the year include salaries and expenses ($8.3 million), supplies ($2.3 million), employee benefits ($1.8 million), purchased services ($1.3 million) and professional fees ($1.1 million).

Overall, the TMH budget projects a less profitable 2009.

The estimated profit is $2.2 million, according to the budget, down from 2008's $2.7 million projection.

Bergman explained the difference between this year's estimates and last year's.

"Both expenses and revenues are going to rise," he said, "but expenses are rising quicker than revenue."

Bergman said this year's budget was submitted later to Moffat County officials than last year because of other matters that took precedence.

Those included, the CFO said, finalizing a loan process for a new hospital through the federal Department of Housing and Urban Development, systems implementation, start-up of OB/GYN service and other activities.

This year, there was less than a month's delay in finalizing the budget compared to last year, he said. The county did receive a preliminary budget Dec. 1, 2008, and that budget closely resembled what was approved Thursday.

TMH is in the process of closing out 2008's financials.

It's unknown as of now how close actual year-end numbers will be to the 2008 budget projections, although Bergman said that as of the end of November, actual figures were within 1 percent of projections.

Comments

STANHATHHORN 5 years, 7 months ago

Mr. Bergman claims that TMH is within 1% of of projections. TMH profit & loss statement for 11/30/08 has the budgeted outcome at over 15% in the negative, in spite of about $1.2 million in unbudgeted non-operating income. Actual profit from being in the hospital business for the 11 months is about a negative ($600,000). The ending bank balance for the period 11/30/08 was less than $25,000. I don't think an aquistion of any local clinic is in the immediate future.

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Globe 5 years, 7 months ago

Stan,

So you are saying that they are on track to loose over (600,000) in the hospital side of their business, but will come out and tell everyone how they made a million dollars because they got money from other sources to stay afloat? Daily Press are you reading this? If my memory serves me correctly then much of the income that they are showing is due to the fact that the hospital foundation gave them a million dollars (My business has given over 5,000 in the last five years to this foundation) a few months back and they are recognizing that as revenue, is that correct? Is that what they are telling this community? Are they also recording the money they received from department of local affairs as revenue too?

So if my assumptions are correct, any profit they make this year then is due to the efforts of the previous administrator Randy Phelps because he was the one who put together the foundation and got the DOLA money, does that sound right Stan? And the rest of their "profit" is from the tax we approved last year. So if their profits are coming from the work done by a guy who hasn't been here in three years and taxes that are suppose to used for the new building, what has the current hospital done to make money in the last few years? Haven't they shown a loss now for three or four years? I was on a committee with Randy for a number of years and he had one bad year and he was kicked out. How does the current CEO get away with three terrible years and still keep his job? Is their strategy just to get money from loans and the county and use it for operations? Doesn't someone go to jail when you start missapropriating money like that Stan?

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STANHATHHORN 5 years, 7 months ago

Globe, The apparent answer to your questions is yes, there have been several capital contributions, grants, etc. that appears were booked as income. Another point of interest is when this program was being pitched to the public, we were told the 3-mil tax ($1.5million max) would comprise 40% of the loan payments. TMH would generate profits to cover the other 60%. Later, we were told that it would be 50/50 suggesting about a $3 million annual payment. Now we know that the annual payment will be about $4.5 million for quite a few years. That equates to a 33/67 split!! How can you miss payment obligation by $1.5 million per year. Also, the 3-mil levy has a minimum 40 year life, whereas the loan is amortized for less than 27 years. Because of declining gross property valuation, the $1.5 tax revenue slipped to about $1,422,000 in 2008 and will decline further to about $1,329,455 for 2009. The 3-mil levy was the statutory maximum, and because TMH is a taxing entity, I don't believe they can receive money from the county general fund.

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taxslave 5 years, 7 months ago

Question you two.....Is there accountability for this? Where we lied to?

Stan, your calculator has been crying out for a long time. Why were you never taken seriously? Same reason everyone left their money in the market.

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