Another step in the process

CHELAN - So far, so good. 

At their regular board meeting on Feb. 21, the Lake Chelan Community Hospital and Clinic (LCCHC) Board of Commissioners okayed the initial renderings of the proposed new hospital site, and instructed LCCHC CEO Keving Abel to proceed with the pre-application process for the USDA grant. The motion allowed Abel to spend $6,000 to get the process started in order to lock in the interest rate, which is updated on a quarterly basis. 

“The space was based on the master facility strategic plan,” Abel began in his presentation. “One of the first things we did was to look at the analysis that Jody Carona (from the Healthcare Facilities Planning and Development) and her team helped us with, going out to 2030, and saying these are the space requirements we need.” 

Overall, the board was pleased with the preliminary renderings, but Commissioner Mary Murphy asked if the square footage was the same as the original and if that impacts the cost of the total project. 

“It is a little different,” Abel responded. “It is a little higher right now, of course one of the things we are doing is we are going to adjust this once the vote comes in. We are going to have caregivers and providers; the staff and physicians will meet with the architects and make sure the flow is going well. There could be some minor adjustments to this, but it is a little higher than the original 77,000 square foot.” 

As to the financial implications on the project, “Kelly Arduino from WIPFLi thinks that it is within the range now. It will likely be adjusted when it gets more refined in the future,” Abel stated. 

Commissioner Mary Signorelli was adamant in stating the renderings were only initial and also echoed Abel’s sentiments in the importance of getting the opinion from the people that are actually working in the space in terms of the flow. 

“It is coming along,” Commissioner Tom Warren stated at the end of the discussion. 

Abel then transitioned into the USDA grant.

“It is a three month preperation and three months once it goes to USDA to get approval and get the loans in,” Abel began. “So that is something for us to consider in terms of timing. I have a recommendation that we move forward with a piece of it and not the entire thing. There are a couple of things, one is the pre-application to determin eligiblity for community facilitys. As a part of that WIPFLi has to submit their organizational documents to the Office of General Council, so that is a high level legal review whether we qulaify for USDA loan. We know that other hospitals like us do this, so it is very likely to be approved, but that costs about $1,000 to get that application in and it can take two to three weeks to get that done. After that comes the overall application process and the details that surround that.” 

Those details include a premilinary architecture review, an environemtal review on the proposed site, a letter from the City of Chelan Community Development for intial approval of the project, the project budget, site development, architecture engineering fees and an examined financial forecast from a CPA firm. 

“The exmamined financial forecastis more detailed work to the 10-year financial forecast that we already had done,” Abel said. “We are thinking we can get the pre-application for $1,000 and we can do several of the preliminary documentation work so they are ready to go on their end for another $3-5,000. The cost benefit to the commission is if we approve $6,000 to get going on it, we can get a month or two ahead of that six month curve by getting a lot of this information to them. The downside is if we push it out, we could potentially see a different interst rate if it happens at a later date. I think at this point, having a modest piece working before the election is reasonable. If we don’t win the election then that $6,000 is lost in the grand scheme of things.” 

“But a .1 percent increase (in the interset rate) would be a lot more money than $6,000?” interjected Commissioner Fred Miller. 

Since the interest rates are updated quarterly, the next one would come out April 1.  

“Really my conversations with Kelly were how can we get the most bang for our buck and get further along in the planning on this,” Abel said. “Once the application is submitted the rate gets locked in is what Kelly had told me.” 

“I think you ought to go ahead and do the $6,000 now,” Warren calmly asserted.  

If the levy passes the election, the $6,000 will be capitalized as a part of the project. If it doesn’t it will be expensed for this year. 

The next LCCHC board meeting is on March 28, at 5:30 p.m. in the hospital board room, 

Zach Johnson can be reached at lcmeditor@gmail.com or (509) 682-2213.