02 Jun 2015 02:01:24 MDT Written by: Administration
Entities finance big-ticket capital projects, such as schools, hospitals, and airports by issuing bonds that get paid off over long periods, sometimes decades. Over the years, Montrose Memorial Hospital has used revenue bonds to help pay for long-term capital improvements, including additions to the hospital that have helped the hospital expand with the needs of the community.
I’m pleased to announce the Montrose Memorial Hospital Board of Directors has redeemed the bonds issued in 1997 and by doing so the hospital will avoid more than $222,000 in interest payments. The bonds will be redeemed 30 months early.
The 1997A and 1997B hospital revenue bonds were used to finance capital improvements to the hospital, including updating outpatient facilities, adding 55,000 square feet of new space which improved patient flow and care. During the last MMHI Board Meeting, the members voted to redeem the remaining $2,843,000 bond balance earlier than the Dec. 17, 2017 maturation date, thereby avoiding additional interest.
In explaining why the board of directors decided to pay off the bonds early, Ron Courtney, MMHI Finance Chair, said: “In the spirit of being good stewards of the hospital’s resources, we agreed that it made more sense to use some of the cash being held in reserve with some additional cash to pay off these bonds. This reduces our debt, saves interest payments and allows us to continue to focus our resources on the healthcare needs of the community.”
It’s a lot like a homeowner who pre-pays a mortgage to save on interest payments. If you can do it, it is good common sense. As stewards of the hospital funds, we must be mindful to deliver top-notch care that meets the evolving needs of the community but also take care of the financial success of the hospital.
In our 2014 year-end financial statement, the hospital reported a record-high number of total patient days (10,532) and also outpatient visits (101,903). However, despite having provided nearly $10 million in charitable care, Montrose Memorial recorded excess revenues of $5.5 million.
In recent years, the hospital has increased cash reserves and reduced its debt significantly. We could not have done this without our 600-plus staff who do all they can to meet the needs of our friends and family. As CEO, I am very proud to be part of this great organization.
Steve Hannah, MHA is the CEO of Montrose Memorial Hospital. To learn more, visit http://www.montrosehospital.com.