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CCHC unveils plan to build new hospital with no local tax support

Recognized as a priority, the construction of a new modern medical facility in Concordia is closer to becoming a reality.
Cloud County Health Center administrator David Garnas, during an event at the Broadway Plaza this morning, announced that the hospital is moving forward on the possible construction of a new 14-bed, 74,000-square foot facility, to be located on College Drive east of U.S. Highway 81, without seeking taxpayer support.
Cloud County Health Center (CCHC) will be seeking financing through the United States Department of Agriculture (USDA) to fund construction of the new hospital.
The preliminary cost estimate for the facility is $40,347,000.
“While our community group sometimes differed on design aspects, they unanimously agreed on one thing, we should try to do this project without taxpayer support. Cloud County Health Center is one of a handful, and I believe the number is five, of critical access hospitals in the state that does not receive local taxpayer support. We receive no sales tax, no property tax, no personal property tax, nothing of that nature. We are 100 percent independent and stand on our own two feet financially,” Garnas said, “Our community group, board, staff and Salina Regional Health Center wanted to remain in that elite group. And I am happy to announce today that we will not, and I will say it again, we will not be seeking taxpayer support for this project.”
Garnas said that in the next six months they will be working with the USDA on all of the steps necessary for the new facility.
“We are hoping to have a final answer from the USDA in late December,” Garnas said.
Garnas said that utilizing the USDA program available to critical access hospitals will allow for more favorable rates and payback period than a conventional loan.
“This financing program, along with the critical access hospital reimbursement methodology, allows hospitals such as ours across the nation to continue to offer high quality services in modern facilities,” Garnas said.
CCHC, over the next six months, will issue a request for proposals for a manager-at-risk.
Garnas said that once final approval for financing is received from USDA, it will take eight months to design the building, with groundbreaking no later than early 2021. Construction time after groundbreaking is estimated at 19 months.
“So why are we coming to you this early? We really struggled and wanted to make sure that  a word is kept in the forefront through this whole process, and that word is transparency,” Garnas said, “Through this entire process we have strived to let the community know our intentions and be transparent as we continue on this path.”
Garnas and CCHC board of trustees chairman Phil Gilliland will be meeting with the Concordia city commission on Wednesday to ask for an option on the land on College Drive for the construction of the facility.
The eight-acre parcel of land in the South Development is owned by the city of Concordia.
“I think it’s great,” Chad Sallman, who was attending the event said, “It’s exactly what the town needs. I love the location, the visibility of it. It’s just going to be great for this community.”
Garnas announced during the event that CCHC has enjoyed a financial and operational stabilization.
“Due in no small part to our partnership with Salina Regional Health Center and due largely to the continued high quality care provided by our doctors, advanced practice providers and staff. We have added providers. We have added specialists, I think in just the last year, five or six. We have added a walk-in clinic to serve you, our community better and most importantly, we have done these things with sound financial footing,” Garnas said, “With our house in good order, our board, Salina Regional and the leadership made a decision in December to start working toward providing a health care facility to match.”
CCHC entered into an operational agreement with Salina Regional Health Center in May, 2016.
While no taxpayer dollars will be sought for the construction of the facility, Garnas did ask for support from the community.
“Number one, make this your hospital. Visit our clinics, use our services, see our doctors, our midlevels and our staff. Your use of the current facility and our new facility will be the number one way to help,” Garnas said, “Please remember we are building this for you, the communities that we serve.”
Garnas also called on the public to make it their project.
“Between now and January we will be well on the hunt for additional grant funding and private support, because every dollar we can raise for this project means less financing we have to seek or new equipment that we can purchase,” Garnas said, “USDA also likes to see some skin in the game. That is a big piece of their project evaluation. So today I am also asking you to think about how you can help us in our goal. I am calling on every service group, government entity and citizen to think about ways you can adopt this project to bring a high quality healthcare facility to Cloud County. No donation is too small and they are all very much appreciated.”
Concordia citizen Warren Regnier, who attended the event, said, “I think it’s the best thing to happen to Concordia in a long time. “They’re not using tax dollars; there’s no tax increase. This is what this town has needed for a long time.”
“I’m very excited about this,” Phil Sudduth, also in attendance, said, “The main thing for me is that they’re not raising property taxes. I’m going to do my best to support this project throughout the community.”
A Priority
At the request of CloudCorp, governmental agencies, taxing bodies and boards in Cloud County were asked last fall to provide a list of their top priorities for the county in the upcoming years.
Eight groups submitted lists of their top three priorities. A new, modern medical facility was included on seven of those lists and was the top priority on five of them.
“A new healthcare facility is an amazing opportunity for Concordia and all of Cloud County. In rural America, hospitals are many times the centerpiece of economic vitality providing jobs and resources for the community residents,” CloudCorp executive director Kim Reynolds said, “Healthcare facilities are typically the largest employers. Aside from the obvious medical professional positions, there are numerous supporting positions such as food service, maintenance, IT, environmental services and more. All of these jobs are important and provide economic impact into our communities by bringing in professionals to live and invest in Cloud County.”
Getting Started
In December of last year, the CCHC board of trustees, in conjunction with Salina Regional Health Center, initiated a master facility planning. TreanorHL was hired to develop the plan.
A four-month study of the existing facility by the hospital board, administration and department heads and a community group, did not support the continued use of the current four-story facility for acute and outpatient care functions.
Brack & Associates Consulting Engineers, PA and Cummins Corporation also provided input during the facility review.
The current facility was opened in 1951 as a 150-bed facility.
Garnas presented a proposal on May 3 for the construction of the new facility.
The new facility would be a single-story building with a basement. All patient services, including the 14 beds, are located on the main level of the building, except for the sleep lab.
Included in the patient services are the emergency room, admitting, the business office, family practice clinic, specialty clinic, rehabilitation department, cardiopulmonary, dialysis, outpatient surgery, laboratory, diagnostic imaging and pharmacy.
A walk-out lower level would include the dining room and dietary services, administrative offices, a conference room and maintenance.
During the evaluation of the existing facility, each department and room was evaluated along with mechanical, electrical and plumbing systems and were given a rating of good, fair or poor.
The Conclusion
The conclusion about the existing site and structure states that the age and configuration are below current standards and the quality of patient experience is compromised by those factors. Patient privacy issues are at very high risk and pose real danger in the future. The engineering systems need significant upgrades or replacement, which render continued use or expansion of the existing facility questionable relative to the benefits.
It also stated in the conclusion, that a recommendation cannot be made to continue to renovate and expand a facility in the current location. The benefits of code and regulatory compliant planning for both new acute and outpatient care spaces would continue to be compromised by the quality and organization of the existing building spaces.
The renovation of the existing facility was taken into consideration during the review.
Information provided by Garnas in May stated that given the report findings in all of the different departments, the cost estimator states that the time frames to renovate would exceed three years and cost more than new construction.
The cost estimate factors in business interruption costs as well as the construction cost of the existing building.
A review by Cummings Corporation stated “this report reviews in depth the issues and challenges associated with the existing facility. To remodel the existing facility would dramatically extend both design and construction durations.”
It was stated that the timeline for renovating the facility would easily double that of new construction and the end result would not solve the current problems identified in the analysis.
Once it was determined that the construction of a new facility was the best long-term solution, the process of selecting a site was started.
There were three potential sites evaluated, including the site of the existing facility, a site on the west side of U.S. Highway 81 south of Walmart and the site on College Drive that was selected, which provides room for expansion if needed.
In addressing what would be done with the existing building if a new facility is constructed, Garnas said that if someone were to come in with a well thought out plan, financing in place and was ready to repurpose the building, the hospital board and administration would be happy to talk to them.
Garnas said in the cost estimate presented, there is money allocated to level the building and repurpose the land.
“We do not feel like we would be good community stewards if we left it empty,” Garnas said.


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