PINCKNEYVILLE — The Pinckneyville Community Hospital Board of Directors on Wednesday night voted unanimously to proceed with a loan application with U.S. Department of Agriculture for the construction of a new facility.

If approved, the $23 million, 40-year loan would be guaranteed by the USDA at 3.375 percent interest.

“That does not obligate us to anything more than we’re already obligated to,” Board Chairman John Shotton said before the vote. “It just starts the process.”

Last week, the board reviewed a debt capacity study on the building of a new facility that indicated the hospital could handle a project cost up to $23 million.

Those numbers were adjusted since then to reflect a shorter construction time of 16 months — as opposed to 24 months — and the reallocation of tax monies that are currently levied to retire debt that will be paid off in 2015.

The readjusted debt capacity study indicated the hospital could handle a project cost up to $27 million.

Pinckneyville Community Hospital Administrator Tom Hudgins said the current estimate for the hospital’s construction is $25.1 million, but that the general contractors thought that number would go down.

“They’re expecting a positive response from the market if funding is committed,” Hudgins said.

Originally designed at over 100,000 square feet, it was revised to 83,000 square feet to reduce costs.

The new hospital would include family medical and specialty clinics, but would exclude some administrative offices and rehabilitation.

If the USDA pre-application is submitted by the end of March, the hospital should know by May 15 if they are invited to apply or are turned down. Final application approval would be given by mid to late June.

The goal would then be to have hard pricing numbers from the general contactors to take a final project cost to a Sept. 11 meeting of the Illinois Health Facilities Board to receive approval for the new hospital plans.

The certificate of need for a new facility expires Oct. 20.

The process of replacing the 25-bed critical access hospital began in 2002. In November 2010, the project had a major setback when the Department of Housing and Urban Development declined to back financing. Despite receiving a certificate of need from the state of Illinois, HUD deemed the hospital unnecessary in their own study.

Property was purchased for the new hospital in 2008, near the intersection of White Walnut Road and Illinois 154 on the eastern edge of the Pinckneyville.

brent.stewart@thesouthern.com

618-351-5805

On Twitter: @BrentStewartSI

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