Floyd Valley Hospital gains expansion funds

Posted October 23, 2013 at 9:22 pm

By Steve Peterson

Plymouth County supervisors approved a request for funds for the Floyd Valley Hospital’s North Addition.

The supervisors’ vote was 4-1 with Supervisor Mark Loutsch dissenting.

The three-year payment to Floyd Valley Hospital as chosen by the supervisors will be from:

• Revolving Loan Fund: $15,000 in FY 2013-2014 and $150,000 in FY 2014-215; and

• $100,000 in FY 2015 – 2016 from the county’s Local Option Sales Tax fund.

Supervisors stressed this funding is from existing LOST funds from the Plymouth County Jail bond issue; not the new funding which begins in 2016.

Three other options were presented but the formulas all had $400,000 as their total contribution.

“I wish more of it would have come from the LOST fund,” said Loutsch of his reason for voting against it.

All supervisors said they favored the $400,000 figure.

“I think there should be at least $50,000 in the Revolving Loan Fund to be able to be used for those things that might come along,” said Supervisor Jack Guenthner.

Hospital Administrator Mike Donlin said if the bids come in higher than expected, then the plan would be to use a contingency basis and possibly cut some of the 11 alternates. “If we cut the alternates, then we will have to have another project in the future. With the debt we’re taking on, we will need capital for it.”

A re-bid is a possibility.

Supervisor Craig Anderson thanked Donlin for the hospital’s information Oct. 1, for its “honest information about what they’re asking for. I’m glad you did not ask for the moon. I would encourage us to do a three-year plan as opposed to a lump sum.”

“Now we have $450,000 in the Revolving Loan Fund. When I got on the board, the reserve was down to $300,000. All this money is pooled, and it all works to make the checks clear. Floyd Valley Hospital has a really good project,” said Anderson.

“We’re keeping our promise that the new LOST funds would go to roads,” said Supervisor Don Kass. “We’re going to keep that promise.”

Project Revenues

According to Donlin’s Oct. 1 presentation, 70 percent, $18 million of the approximately $25.9 million expansion, is expected to come from a USDA/Rural Development loan. Other sources are hospital reserves, $2.34 million; City of Le Mars, $3 million; and a $2.6 million capital campaign.

Project Costs

Costs are site development at $700,000; building construction, $19.812 million; equipment and furnishings, $3.414 million; and design, engineering, professional fees, etc., $2 million. Bids were due to the Hospital Board of Trustees on Oct. 15. The bids were delayed by the board members to a future meeting.

“Seventy percent of it is the funds we are borrowing from the USDA. We’re also knocking on doors in the community,” said Donlin. “Over the past 10 months our Foundation has been having area-wide conversations for support of the North Addition project. We’re 80 percent done with that campaign.”

The Floyd Valley Hospital’s North Addition schedule would be:

• In 2013, relocate utilities and loading dock; and begin installation of a new geothermal system.

• In 2014, North Addition construction which includes a new clinic, surgery center, offices, lobby, and utility updates over two stories.

• In 2015, the renovation phase includes installing remaining geothermal system and pave the new parking lot; modernize seven patient rooms built in 1973.

Renovation phase improvements costing $2 million would be paid with Local Option Sales Tax Funds, which the supervisors approved in August 2014.

Akron and Westfield are in the hospital’s “secondary” market area, said Donlin.

In FY 2013, Akron residents had 77 Emergency Room (ER) visits to Floyd Valley Hospital; 223 outpatient visits; 404 Family Medical Clinic and 25 for Home Health.

Le Mars had 4,005 ER visits; 16,842 all outpatients; 23.912 at the Family Medicine Clinic and 211 for Home Health.

Westfield had seven ER visits; 36 all out-patients; 34 Family Medicine Clinic and seven Home Health.

According to figures in a brochure, Plymouth County had 5,023 ER visits; 21,773 all outpatients; 32,165 for Family Medicine Clinic and 327 for Home Health.

“We would like to have a conversation about (the county contributing) the cost of one bridge. If one bridge could be delayed a year, it would be about $400,000,” said Donlin. “We hope when we open the North Addition, we can add the county to the city and citizens as list of supporters. That would be 1.5 percent of the North Addition project. I think it’s a fair amount.”

“The North Addition project is out for bid. Local banks, financial consultants and the USDA still has some hoops to go through,” said Donlin of future steps. “We’ll negotiate a ground breaking with the winning bidder.”

Of note, the government recognizes that smaller, rural hospitals have unique needs. Because this project impacts the hospital budget, Floyd Valley Hospital will receive larger Medicare-Medicaid reimbursements to offset some project costs.

Donlin said about 350 people work at the hospital.

“Our region reaches all over the place — to Sioux and Union counties. We have three employees who live in Akron and one in Westfield.

We polled our employees to see if they were supportive of the North Addition with Plymouth County supervisors and about half said they were, said Donlin, explaining supporters, by zip code, included Le Mars, 178; Remsen, 43; and Merrill, 13.

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