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Plans progress for new hospital
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| Corporate Board Chair Anselmo Torres, District Board Chairwoman Shirley Shotton and Board Secretary Kay Haas listen to the presentation by triad of The Neenan Company/Stroudwater Associates/Dougherty Mortgage for the new hospital project. (Carol Broeder/ARN) |
Northern Cochise Community Hospital seeks HUD grant for $25 million building
By Carol Broeder/Arizona range news
By a five to one vote, the hospital board decided last Monday night to move forward with building a new $25 million hospital and nursing home.
The corporate board of Northern Cochise Community Hospital voted to spend $269,000 to "engage the triad of The Neenan Company/Stroudwater Associates/Dougherty Mortgage" for the project.
Board Secretary Kay Haas, who cast the lone nay vote, said later, "The new facilities being considered will be a significant asset for our community, probably the most important project undertaken here in years."
"I disagreed with the board on the approach to take in pursuing the project, but the board has made a decision and I will support them in that decision," she told the Range News.
The hospital plans to hold meetings in the community to discuss the project.
"We do not have an exact date at this time, but intend to move forward with our first public forum in about a month," said NCCH Community Relations Director Lineva Donahue.
Michael Curtis with Neenan and Brian Haapla with Stroudwater, made presentations at the prior district board meeting.
Director Carol Dunagan asked if they were ready to give the information the board had asked for at the end of the day's work session.
Miguel Burbano, also with Neenan, said that they were able to come up with a mix of 19 private rooms and three doubles, which would make 24 beds.
He added that the clinic area was also "tightened up."
With those adjustments, the proposed hospital building would be a total of "37,000 square feet versus 34,000 square feet," said Burbano, adding, "I'm pretty comfortable we can make it fit into that space."
Hospital CEO Harley Smith said that the specialty clinics could be left in the "old" hospital building, thereby freeing up space for something else.
Haapla pointed out that the changes added about $2 million to the project, but that the additional volume would offset the cost.
"Does that mean we could borrow $2 million more?" asked Chairwoman Shirley Shotton. Haapla said yes.
Haapla explained that currently, NCCH averages about four patients per day, for a total patient census of 12.
He projects for that to increase to 23 patients per day by 2017.
Smith asked how many beds were allotted for the emergency room (ER).
"The ER hasn't changed," replied Burbano, referring to the afternoon's work session.
"We have a total of seven possible," meaning five beds and two flex beds.
Burbano said if the specialty clinic were removed, more beds could be added to the ER.
Curtis told the board that the project would cost about $22 million for debt service, plus $3 million in equipment, for a total of about $25 million.
It would include a new 37,000-square-foot hospital building, and revitalization of the existing hospital and nursing home, he said.
Adding 20 new beds to the nursing home would bring the total to 59, Curtis said.
He also discussed the concept of "market capture."
Curtis explained that, according to the benchmark of other Critical Access Hospitals, NCCH is at the lower end of what it is aspiring to capture its potential market.
"You have a much greater potential," he said.
That's a good thing. You want to buy a lower market value home in a higher value neighborhood," said Curtis.
"Our potential for growth is huge," Smith told the board.
Curtis then gave a project timeline, explaining that if the board decided to proceed with the triad, contracts could be executed with Neenan and Dougherty on Monday, March 15, with schematic design commencing the following Monday.
Level One submission to HUD 242 Mortgage Insurance or USDA would take place on Wednesday, March 31; and the pre-application to HUD in Washington, DC would take place on Wednesday, May 5.
Curtis recommended that the trip be taken by the hospital's "board chairman CEO, CFO, other interested board members, and doctors."
The invitation to submit for HUD mortgage insurance would occur two days later, and the full mortgage insurance application would be submitted to HUD on Tuesday, Aug. 3.
A site visit by a HUD account executive would take place on Wednesday, Oct. 13.
The contract for construction would be on Wednesday, Sept. 29, with early construction beginning on Monday, Dec. 6.
Curtis explained that since Neenan is a Design Management firm, it looks to hire local tradesman.
The timeline projects construction to be completed and the new hospital occupied by Sept. 30, 2011.
"There are risks between May 7 and Nov. 17," which is the date of the recommendation for the loan insurance commitment, said Curtis.
Risks include the hospital's need to manage its financial performance as projected.
"The hospital must show financial performance that meets their criteria," Curtis told the board.
After a report by Haapla on the financial aspects of the project, Charles Ervin, with Dougherty Mortgage, said he thought there would be no problem qualifying.
A discussion ensued, clarifying that while the transaction happens under the district board, the contract will be with the corporate vote.
So, the decision to engage the professional services is with the corporate board.
"Our job here is to give you information," said Curtis, encouraging the board to get a second opinion if it would be more comfortable.
"We are giving you value," Burbano told the board. "We have to stand behind a guaranteed maximum price. If you're not satisfied with us, you don't have to pay us."
Dunagan pointed out, "We have discussed this over and over. We should either decide whether we're going to use you or not."
By Carol Broeder/Arizona range news
By a five to one vote, the hospital board decided last Monday night to move forward with building a new $25 million hospital and nursing home.
The corporate board of Northern Cochise Community Hospital voted to spend $269,000 to "engage the triad of The Neenan Company/Stroudwater Associates/Dougherty Mortgage" for the project.
Board Secretary Kay Haas, who cast the lone nay vote, said later, "The new facilities being considered will be a significant asset for our community, probably the most important project undertaken here in years."
"I disagreed with the board on the approach to take in pursuing the project, but the board has made a decision and I will support them in that decision," she told the Range News.
The hospital plans to hold meetings in the community to discuss the project.
"We do not have an exact date at this time, but intend to move forward with our first public forum in about a month," said NCCH Community Relations Director Lineva Donahue.
Michael Curtis with Neenan and Brian Haapla with Stroudwater, made presentations at the prior district board meeting.
Director Carol Dunagan asked if they were ready to give the information the board had asked for at the end of the day's work session.
Miguel Burbano, also with Neenan, said that they were able to come up with a mix of 19 private rooms and three doubles, which would make 24 beds.
He added that the clinic area was also "tightened up."
With those adjustments, the proposed hospital building would be a total of "37,000 square feet versus 34,000 square feet," said Burbano, adding, "I'm pretty comfortable we can make it fit into that space."
Hospital CEO Harley Smith said that the specialty clinics could be left in the "old" hospital building, thereby freeing up space for something else.
Haapla pointed out that the changes added about $2 million to the project, but that the additional volume would offset the cost.
"Does that mean we could borrow $2 million more?" asked Chairwoman Shirley Shotton. Haapla said yes.
Haapla explained that currently, NCCH averages about four patients per day, for a total patient census of 12.
He projects for that to increase to 23 patients per day by 2017.
Smith asked how many beds were allotted for the emergency room (ER).
"The ER hasn't changed," replied Burbano, referring to the afternoon's work session.
"We have a total of seven possible," meaning five beds and two flex beds.
Burbano said if the specialty clinic were removed, more beds could be added to the ER.
Curtis told the board that the project would cost about $22 million for debt service, plus $3 million in equipment, for a total of about $25 million.
It would include a new 37,000-square-foot hospital building, and revitalization of the existing hospital and nursing home, he said.
Adding 20 new beds to the nursing home would bring the total to 59, Curtis said.
He also discussed the concept of "market capture."
Curtis explained that, according to the benchmark of other Critical Access Hospitals, NCCH is at the lower end of what it is aspiring to capture its potential market.
"You have a much greater potential," he said.
That's a good thing. You want to buy a lower market value home in a higher value neighborhood," said Curtis.
"Our potential for growth is huge," Smith told the board.
Curtis then gave a project timeline, explaining that if the board decided to proceed with the triad, contracts could be executed with Neenan and Dougherty on Monday, March 15, with schematic design commencing the following Monday.
Level One submission to HUD 242 Mortgage Insurance or USDA would take place on Wednesday, March 31; and the pre-application to HUD in Washington, DC would take place on Wednesday, May 5.
Curtis recommended that the trip be taken by the hospital's "board chairman CEO, CFO, other interested board members, and doctors."
The invitation to submit for HUD mortgage insurance would occur two days later, and the full mortgage insurance application would be submitted to HUD on Tuesday, Aug. 3.
A site visit by a HUD account executive would take place on Wednesday, Oct. 13.
The contract for construction would be on Wednesday, Sept. 29, with early construction beginning on Monday, Dec. 6.
Curtis explained that since Neenan is a Design Management firm, it looks to hire local tradesman.
The timeline projects construction to be completed and the new hospital occupied by Sept. 30, 2011.
"There are risks between May 7 and Nov. 17," which is the date of the recommendation for the loan insurance commitment, said Curtis.
Risks include the hospital's need to manage its financial performance as projected.
"The hospital must show financial performance that meets their criteria," Curtis told the board.
After a report by Haapla on the financial aspects of the project, Charles Ervin, with Dougherty Mortgage, said he thought there would be no problem qualifying.
A discussion ensued, clarifying that while the transaction happens under the district board, the contract will be with the corporate vote.
So, the decision to engage the professional services is with the corporate board.
"Our job here is to give you information," said Curtis, encouraging the board to get a second opinion if it would be more comfortable.
"We are giving you value," Burbano told the board. "We have to stand behind a guaranteed maximum price. If you're not satisfied with us, you don't have to pay us."
Dunagan pointed out, "We have discussed this over and over. We should either decide whether we're going to use you or not."
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