CCHC hosts meeting on proposed facility

Seeking financing through the United States Department of Agriculture (USDA) for the construction of a 74,000 square-foot modern medical facility, Cloud County Health Center hosted a public meeting on the project Thursday at City Hall.
The public meeting was one of the necessary steps being taken by Cloud County Health Center (CCHC) during the USDA application process.
CCHC is expecting to have a commitment from the USDA by December 31, and hopes to break ground on the $40.35 million facility early in 2021.
The new hospital will be located on College Drive north of Walmart.
CCHC administrator David Garnas provided about 25 people in attendance at the meeting with details on the proposed new facility and the financing process, and answered questions about the project.
CCHC master facility planning began in December, 2018.
“Because clearly we knew we had some challenges with our building,” Garnas said.
The current hospital building was constructed in 1951 as a 150-bed facility.
“It is very well built which is part of the problem. Because it is very well built it is really, really hard to renovate,” Garnas said.
The building was evaluated by engineers and architects, and a report was presented to CCHC which stated “The findings of the review team do not support the continued use of the hospital building for acute care nor for outpatient care functions. A recommendation can not be made to continue to renovate and expand the 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 organization of the existing building space.”
Land in College Drive Park owned by the city of Concordia was selected for the site of the facility.
CCHC entered into a development agreement with the city for the land, and closed on it on Tuesday.
“The land is perfect in many ways,” Garnas said.
CCHC also entered into a development agreement with Cloud County Community College for land adjacent to the land owned by the city.
The new hospital will be a one level facility with a basement. All patient care services, except the sleep study lab, will be located on the main level.
CCHC was given a cost estimate for the construction of the new facility, which included a low, mid range and high cost estimate.
The $40.35 million is in the mid range cost estimate.
“These aren’t numbers we just randomly picked out of the sky. We have hired construction estimators as part of our master facilities plan,” Garnas said.
The community group involved in the facilities planning agreed that CCHC should try to do the project without local taxpayer support.
CCHC is one of just five critical access hospitals that does not receive any local taxpayer support.
“It was a high priority if we could figure out a way to do this, and find a funding mechanism we could qualify for to move forward and have a modern medical facility in Concordia,” Garnas said.
CCHC looked at two financing options through USDA and Housing and Urban Development (HUD).
Garnas said that USDA has the same low interest as HUD of 3.5 percent, but offers a longer payback term of up to 40 years.
USDA does not require mortgage insurance, which can be costly.
Garnas said there are a lot of steps in the USDA application process including feasibility studies, market analysis, preliminary architecture reports, appraisal on the proposed building and environmental impact studies.
Once CCHC receives the letter of commitment from the USDA, the design process will begin. That is expected to take about eight months.
Construction of the facility is expected to take about 19 months.
Garnas said that the USDA likes to see community support for the project, and CCHC will be setting up specific programs for donations for the project.
Garnas was asked by an audience member if he could give the people of the county assurance that if the hospital, for some reason, could not make the payments, that there will be no attempt in the future to seek local tax support.
“All I can do is give you my word. That is not the direction we are going nor is that the direction we have even ever talked about. It is our complete intent not to do that,” Garnas said.
Garnas said that he is not even sure how you would go about seeking local tax support.
“It (hospital) is owned by Cloud County Health Center, Inc. It is owned by the board. So in order to be a county owned building, a county owned facility, you would have to change ownership. There would have to be a sale, a transfer, something of that nature,” Garnas said, “And I would assume, you guys can correct me if I am wrong because I haven’t been in the state that long, but I would assume there would have to be a vote by the people as well. So it is not Dave Garnas or his board, it is a vote of the people. So to convert that from a 501(c)3 not-for-profit organization to a government organization or government owned organization,  the first thing you would have to do is get your commissioners on board. The second thing you would have to do is transfer assets and everything else. I don’t know how you would possibly go about that. That would really be tough.”
Garnas said the hospital board made a very important decision a little over three years ago to align with and affiliate with Salina Regional Health Center.
“We are not the same organization today that we were a year ago, three years ago, five years ago, etc. We are just not,” Garnas said.
Over the past  three years, CCHC has been able to bring in a number of speciality physicians and services that were not available before.
“So we are financially stable, we are financially profitable and we are organizationally stable. So we are a very different organization than we were in the past,” Garnas said.