Depreciation of old facility eats into bottom line for PCH in 2015, as expected

The Pinckneyville Community Hospital Board of Directors approved the 2015 budget Monday evening. The budget projects a net income of $75,885 for the year.

Net income/loss includes revenue from sources other than operations. The operations budget projects a loss of $314,391 which is offset by non-operating revenue of $390,276, leaving the small surplus.

As part of the move to a new facility, PCH must accelerate the depreciation of the current facility during the 14-month construction period. Construction began in March.

For the 12 months of 2015 that means an additional $199,653 in depreciation. That additional depreciation dropped the projected net income from $275,538 to only $75,885.

Losses during the construction phase of the hospital were anticipated in the examined forecast completed by Wipfli's before the board chose to move forward with the new facility. The examined forecast assessed the financial viability of building a new hospital.

At the time the examined forecast was done, PCH would have moved to the new facility in 2014. The projected depreciation was $156,800 to be spread over 2013 and 2014.

PCH showed an operating loss of $183,622 and net income of $225,056 in 2012. In 2013 operating income was $885,226 and net income was $1,470,298. The projected operating income for 2014 is $688,640 and the projected net income is $1,352,561.

As of the end of February, the year-to-date figures for 2014 show an operating income of $375,794 and a net income of $888,689. The new fiscal year begins May 1.