Funding for hospital expansion on hold

Funding for hospital expansion on hold

Jan. 12, 2002

By Jim Mimiaga
Journal Staff Writer

The Montezuma County Hospital District board held off on a decision Wednesday on funding infrastructure needs for Southwest Memorial Hospital.

At a Wednesday board meeting, a motion was made to ante up $3.4 million of tax dollars over a 10-year period for capital improvements and maintenance. But the motion was withdrawn a short time later.

The board will take up the issue next month, deciding to wait until pending issues surrounding the nursing home are resolved.

"I don’t feel comfortable voting for this until we know what the final legal costs may be with the nursing-home issue," said board chair Randy Smith.

Last-ditch negotiations between management of the Vista Grande nursing home and MCHD board representatives went on for two days ending Friday. The two parties have been at a stalemate on lease issues that are holding up the construction of a new nursing home on the Southwest campus. Both parties are claiming lack of good-faith efforts by the other.

Southwest’s operating board, Southwest Health System, is planning $10 million in upgrades, remodels and expansions at the 26-year-old, full-service hospital. The three major projects are expanding the operating department, remodeling to better accommodate the lucrative outpatient-surgery service, and expanding the radiology department to the north.

If the expansion is approved, in the first year SHS would receive $282,000 from the district to replace the roof ($110,000) on Vista Grande and for two chillers at the physical plant ($150,000), master alarm panels ($4,800), and a vacuum compressor ($17,000) in the hospital.

The future calls for replacement of items that include chilled water replacements ($218,000), a four-pipe fan coils system ($175,000), heating unit ($525,000), boiler and steam piping replacement ($327,000) and replacement of all electrical systems in the nursing home ($520,000) among others.

The roof will be replaced immediately, whether or not the financing plan is approved by the board. Under an operating lease with the district, SHS is obligated to maintain the facilities. MCHD will send a letter to SHS officially informing them of the need to replace the chronically leaking roof.

SHS then has 60 days to comply, which officials said was not a problem.

Board member Rick Beisel said he would be hesitant to fund hospital development unless a certain percentage of yearly tax income was directed to fund unmet community health needs.

"When SHS was formed, it was our commitment to help meet the health needs in the community that are outside the hospital because there are a lot of them out there," Beisel said.

It was suggested that $70,000 per year go toward identified health gaps in the county.

The district holds $1.4 million in tax dollars derived from a mill levy that brings in approximately $300,000 per year. Under an agreement with the district and the county, $800,000 remains in reserves to cover hospital operations in case of SHS default.

SHS is looking for lenders to help finance the rest of the $7 million or so needed to go ahead with improvement plans. MCHD has been cold to the idea of putting up taxpayer assets as collateral unless there is a public vote. Other avenues are being sought such as revenue or general obligation bonds.

Either way, the public needs to be educated on the issue and it should be put to a public vote, said board member Susan Keck. She referred to a controversial medical-office-building plan by SHS that was quashed in 1998 due to overwhelming civic mistrust.

"If this board is asked to participate in a bond, I recommend a huge community-education effort and that it be put to a vote," Keck said. "The last issue did a lot of damage, so it is very important that the community decides whether a vote is technically needed or not."