BIHS to ask town for $143k in funds
The Block Island Health Services (BIHS) board plans to ask the town for $143,800 in funding this year.
This request is a $20,000 increase from what the town provided to the Medical Center last year, which totaled $123,800. The reason for this increase is to cover a $20,000 shortfall in the Medical Center’s 2014 budget.
The BIHS board voted 8-2 to make this request at its Monday, Jan. 27, meeting. Ken Lacoste and Bill McCombe voted against the motion; Cookie Lenoci was absent.
When the board received last year’s funding, members cited a budget shortfall that required the board to draw around $171,000 from its endowment fund in 2012. Board members predicted the funding request to the town would be recurring.
“We said we would be back with a request this year,” said Medical Center Executive Director Barbara Baldwin.
While the Medical Center’s finances are “improving” from previous years, according to the center’s Finance Specialist Bruce Eagleson, the 2014 proposed budget still has a $20,000 shortfall.
Eagleson later explained to The Block Island Times that this shortfall is not a cash one, but a shortfall due to depreciation. In other words, at the end of the year the center should be able to pay all of its bills, according to Eagleson. However, there will not be $20,000 to set aside for the purchase of new equipment (such as computers and medical equipment) as older equipment depreciates in value.
If the town approves an additional $20,000 in funding, the Medical Center could then put aside the $20,000 to cover the depreciated equipment.
The 2014 budget
The BIHS board approved its 2014 operational budget, which includes $763,063 in total expenses. The most notable expenses are: wages ($370,271), benefits ($78,245), bad debt ($60,000), and office and third party providers ($42,500).
The budget projects $668,790 in revenues. The most notable revenue is: patient care revenue ($353,700), fundraising ($147,500) and the Town of New Shoreham funding ($115,300).
The board will also take an estimated $74,000 from its endowment fund. This amount is the recommended amount the board can draw from the endowment, according to investment chair Mike Hickey.
This leaves the shortfall of $20,000, if the town does not approve the additional funding request.
BIHS board members said there needs to be a plan to balance the center’s budget in future years. Some suggested increasing the number of island residents who use the medical center as their primary care facility.
“We keep decreasing our numbers of patient visits and increasing our budget — it’s not do-able,” said board member Sue Hagedorn.
However, Jan Miller, the Medical Center doctor, did not agree this would be the most effective option.
“We don’t physically have enough bodies on the island to make up for the deficit,” said Miller. “If you only have 800 to 1,000 people on-island, you will only see them once a year if they’re not sick. You can’t bring them in for nothing.”
Board member Pam Hinthorn also commented, “A lot of members on this board don’t receive their primary healthcare from the Medical Center... what’s happening on this board is what’s happening on this island.”
Some members suggested increasing fundraising efforts, but others commented that fundraising efforts have already significantly increased.
Baldwin announced that the board raised $29,415 from the Lights of Love campaign this winter.
“Donations and fundraising definitely helped us out last year,” said Finance Specialist Bruce Eagleson.
“Our profit and loss statements last year  compared to the previous year  are attractive,” said Board Treasurer Pete Tweedy. “It’s nice to see things moving in a positive direction.”
In 2013, the Medical Center had $685,236 in total revenue, and $765,337 in total expenses, resulting in a loss of $80,101.
In 2012, the Medical Center had $632,129 in total revenue, and 753,055 in total expenses, for a loss of $120,925.
At the Monday meeting, board members voted to create a position for a part-time finance specialist. Currently, Bruce Eagleson holds this role as a contract position. The duties of the finance specialist include preparing balance sheets, profit and loss statements, the yearly budget, and managing accounts receivable.
Baldwin recommended that for tax purposes, the role is better suited to be part-time.
“I agree with Barbara that the position should not be a contractor,” said board member Bill McCombe. “But my question is, can we keep the number of hours below 20, so we don’t have to pay for a position with benefits?”
Board members Pete Tweedy and Cindy Baute disagreed with McCombe’s idea.
“Our budget is a lot more complex than just your run-of-the-mill business,” said Baute. “We have to make sure we can get the best person we can. It’s an expenditure, but it’s necessary.”
The board voted unanimously to make this role part-time, and did not reduce the hours below 20.
Also at the meeting, Investment Committee Chair Mike Hickey reported on the status of the board’s endowment fund, which currently totals about $1.5 million. According to Hickey, the endowment fund saw a 17.6 percent growth in the past year.
“I would grade this a B or B-plus,” he commented, explaining that similar endowment funds in the market also saw similar growth.
Hickey also advised that the board could safely draw about $74,000 from its endowment this year. While the board could draw more, he said, doing so year after year would harm the endowment.
Later, Hickey announced he would be resigning as chair of the Investment Committee at the end of this year, citing a need to focus on career responsibilities.
The BIHS board ended its meeting in executive session to “discuss and act on personnel issues related to the budget.” No motions were made in executive session, according to Baldwin.