The hospital ballot issue which asked voters whether funds from an existing capital improvements sales tax should be used to help build a hospital failed by less than 3 percent. The total vote was 873 YES to 919 NO. There was an overall 33 percent voter turnout, with 1,792 votes being cast. The measure passed in the first and fourth wards and failed in the second and third wards.

Hospital Ballot Issue
GateHouse News Service
Tue Feb 02, 2010

By C-T Photo/Laura Schuler

CAPTION: Election judges at 4th Ward voting headquarters assist a voter while another voter fills out his ballot this (Tuesday) morning at Calvary Baptist Church. By 11 a.m., 137 voters had cast ballots in the election, which will determine if city funds should be used to help finance a new hospital in Chillicothe. The local election authority had predicted a 28 percent voter turnout in the municipal election. There are a total of 5,341 registered voters in Chillicothe.

Hospital Issue Goes to Chillicothe Voters
Constitution-Tribune
Tue Feb 02, 2010

C-T Photo/Laura Schuler

CAPTION: A few voters were in attendance at 3rd Ward voting headquarters at the Coburn Building this (Tuesday) morning, casting ballots in the municipal election that will determine whether city funds should be used to help finance the construction of a new hospital. Polls are open today until 7 p.m. A total of 37 votes had been cast at 3rd Ward by 9:25 a.m.

Conceptual Drawings of Proposed Hospital
GateHouse News Service
Thursday, Jan 28, 2010

Conceptional drawings of a new hospital being proposed in Chillicothe have been released. The renderings were created by the architect firm of WJE, of Kansas City, in partnership with BWBR, of Minneapolis, Minnesota.

The two firms will be chosen as the architect on the project if the ballot measure passes next Tuesday, Feb. 2. That ballot issue specifically asks voters whether the city should use revenues from the existing capital improvement sales tax to help construct a new hospital. The city council passed a resolution Monday night limiting the cost of the project to $30 million. The resolution also called for setting a maximum of $3 million (plus interest) in capital improvement sales tax dollars be used for the project and that the funds would be repaid within 10 years. The balance of the project costs would be paid for by local foundations, which have pledged $2 million, and St. Luke’s, the current operator of the hospital, which will put in $25 million.

The proposed hospital is to be built on city-owned property in the southeast corner of U.S. Highways 65 and 36. The total amount of land is 267 acres. Of the total amount, between 200 and 250 acres are located in a 100-year flood-plain area, according to a study released by the hospital consultants. The footprint of the proposed new hospital, which would be in the northwest corner of the property, would not in the floodplain, however, the surrounding ground would be.

If the ballot measure passes, work would begin immediately to firm up details of the building. “Once we clear the election, the next step is to get a contract signed with the architect to convert the conceptual drawing and plans into a hard set of drawings that can be used while staying within the confines of the budget,” Palmer said. Specifics of the facility may change from the conceptual drawings but Palmer said, in general, the finished product would be close to what the conceptual drawings depict.

City OKs Spending Cap
Constitution-Tribune
Tuesday, Jan 26, 2010

Chillicothe City Council members approved a resolution that caps the amount of capital improvement sales tax dollars to help build a new hospital if next Tuesday’s ballot question succeeds. The resolution defines the council’s intent: 1) to spend a maximum of $3 million (plus interest) on the project; 2) that the city’s portion which would be financed by the capital improvements sales tax be repaid in full within 10 years (based on current terms and interest rates); and 3) that total construction costs of the hospital project do not exceed $30 million.

The measure passed 3-1 with 3rd Ward Councilman Tom Douglas voting against the measure. Councilman-at-Large Darryl Rinehart Jr., did not vote since he was serving as mayor pro-tem in the absence of Mayor Chuck Haney.

No one spoke in favor of the proposal but there were several members of the public who voiced opposition to the resolution. Patricia Anderson, who serves as treasurer of Citizens Against Unnecessary Local Government Spending, read a prepared statement to the council and asked several questions. “This resolution is legally non-binding,” she said. “It changes nothing with respect to the language of the Feb. 2 ballot proposal.”

The hospital proposal, as it appears on the ballot, does not identify a dollar amount but simply asks voters whether to allow the city to use its existing half-cent capital improvements sales tax for the purpose of paying some of the costs of constructing a new city hospital. Anderson told council members that when the city began looking into the feasibility of building a new hospital, the public was told that the cost would be $46 million to $52 million and that it was most recently announced that it was a $30 million project. “Passage of this resolution so close to an election will only confuse the electorate further,” she said.

C-T Solicits Questions from Public for Feb. 2 Hospital Election
Constitution-Tribune
Friday, January 08, 2010

The Constitution-Tribune will begin publishing a series of questions and answers over the next few weeks regarding the Feb. 2 ballot issue which seeks voter approval for using city funds to help build a new hospital. All questions submitted will be directed to a representative of the city and may be forwarded on to the person most appropriate to provide the answers to each question.

A number of questions have already been formulated, and the C-T invites members of the public who are interested in submitting questions to do so in writing. Questions may either be dropped off at the C-T business office or e-mailed to ctnews@chillicothenews.com. Those submitting questions via e-mail should telephone the newsroom if they do not receive a reply after having submitted their questions. Questions should be submitted to the C-T office no later than Tuesday, Jan. 26.
Questions will be addressed daily up through the final week of the election. It is the C-T’s intent to publish all questions regarding the proposal.

The question, as it will appear on the Feb. 2 ballot is: “Shall the City of Chillicothe, Missouri, permit use of the City’s existing one-half cent capital improvements sales tax for the purpose of paying some of the costs of constructing a new city-owned hospital, in addition to other currently permitted purposes? Approval of this proposition will neither increase, nor extend the duration of the City’s existing capital improvement sales tax.”

The ballot measure needs a simple majority for passage.

Click here to see questions and answers...

City Land Picked for Proposed Hospital
Constitution-Tribune, Tuesday, December 01, 2009

CAPTION: This 267-acre site southeast of the U.S. Highways 36 and 65 junction could be the site for a new city hospital. This property, owned by the city of Chillicothe, was ranked top on a list of 12 potential sites because of its location, size, accessibility, visibility and availability of utilities. Chillicothe voters will decide Feb. 2 whether to allow the city to use a portion of an existing capital improvements sales tax to help build the hospital.

C-T Photo / Catherine Stortz Ripley

A tract of city-owned land southeast of the intersection of U.S. Highways 65 and 36 is being presented as the preferred site for a new city-owned hospital.

Identification of this recommended 267-acre site is the latest development in a plan to ask Chillicothe voters to allow the city to use a portion of revenues collected from its existing capital improvements sales tax to help fund construction of a new hospital. The election is Feb. 2, 2010.
The site was ranked top on a list of 12 because of its location, size, accessibility, visibility, availability of utilities and the potential for future development nearby. Because the property is owned by the city, there would be no cost for land acquisition.

This tract was identified as the best location through a feasibility study by WIPFLI CPAs and Consultants, a firm hired by the city. Three other city-owned sites and eight privately-owned locations were considered. The sites considered ranged in size from 9.4 acres (the existing hospital site) to 267 acres. Most of the privately-owned sites considered were located along or near U.S. Highway 36. One tract was located north of Chillicothe along U.S. Highway 65.

The other three city-owned sites: the existing hospital site, the former prison site and a tract of land near Donaldson Company were ranked toward the bottom of the list because they were not visible from U.S. Highway 36 and did not have adjacent property available for future development. The site of the existing hospital was also ranked low because of its small size.

Ranked second best of proposed sites was the Beetsma 50-acre tract immediately east of the top recommended site. The purchase price of the Beetsma property would be $40,000 per acre.
WIPFLI provided updates of the study to Chillicothe City Council members during their regular Monday night meeting at City Hall and addressed the site analysis, space programming, architecture selection and current budget and financing. Also attending the meeting were representatives form Chillicothe’s city-appointed hospital committee, Hedrick Medical Center and Saint Luke’s Health System.

WIPFLI had mapped out all sites that were identified through a formal request for proposals process. The group toured all sites, researched and documented their findings, evaluated utility issues, prepared a comparative site matrix and reviewed the preliminary findings with the city, hospital and Saint Luke’s Health System.

Robert P. Walker, an architect and project manager with Walker & Associates who was retained by WIPFLI, revealed the recommended site and highlighted some of its key characteristics. The preferred site, he said, is within the city limits and currently is used for agriculture. Most of the land is located in a 100-year floodplain area. Although the recommended portion of the site is reasonably flat, it may require additional fill.

Walker said the site has excellent visibility from Highways 36 and 65 and noted that there are existing utility easements and that lines for gas and sewer would need to be relocated. The site would also need to be evaluated for the feasibility of relocating dirt from the Beetsma site to the city-owned site. Walker stated that existing soil conditions would need to be evaluated and that the next step would be to proceed with a soil evaluation and site (boundary and topographic) survey.

Read complete press release here. (50KB PDF)

Hospital Study Progresses
By Catherine Stortz Ripley, Constitution-Tribune
Tuesday, Sept 15, 2009

The consulting group hired to develop a feasibility study for construction of a new hospital in Chillicothe is now evaluating potential sites for construction. Representatives from WIPFLI CPA and Consultants as well as from of Walker and Associates, addressed city council members Monday night during their regular council meeting at City Hall.

Through a request for proposals, the city received submissions of eight potential hospital sites. These sites, along with four which are currently owned by the city, are now being reviewed. It is anticipated that by mid-November, WIPFLI will make a site recommendation to the council.

Bob Walker, of Walker & Associates, said the city could expect to spend up to $20,000 or $30,000 more on the hospital study before the issue goes to the vote of the people. This cost would pay an architect to develop a site plan, floor plan and, possible, a rendering of the proposed building.

The council was in agreement that the citizens of Chillicothe should vote on whether a new hospital is built, acknowledging that some residents in the community feel a new hospital is not needed. That vote could come in February 2010 or April 2010.

John Dao, of WIPFLI, made the hospital presentation with Walker to the council and fielded questions from the council as well as from members of the public. He said that objectives and goals are to maintain a transparent process, develop a hospital with no tax increase to community members, pay for the hospital using revenue bonds issued by the city in conjunction with a significant increase in reimbursement from the federal government’s critical access hospital program.

The feasibility study considers replacing the existing Hedrick Medical Center, which currently is a 25-bed critical access hospital. The proposed new hospital would still be a 25-bed critical access hospital but would be more energy efficient and built to more efficiently for staffing. Proponents also state that a new facility would be a recruitment tool to attract and retain doctors as well as patients. Those opposed to the idea of a new hospital state that the existing hospital is in good shape and does not negatively affect the hiring and retaining of doctors, nor does it impact attracting or retaining patients.

The council chambers were full Monday night with various city department managers and concerned members of the public.

Wanted: 15-20 Acres of Usable Land
Published: Friday, Aug 21, 2009, C-T

The city of Chillicothe is soliciting proposals for potential hospital sites to be evaluated as part of its feasibility study to determine whether a new city hospital should be built. As a part of the feasibility process, the city is now searching for suitable properties to consider for future hospital use. Site proposals must be submitted to City Hall by 3 p.m. next Thursday, August 27.

A legal notice published in the Constitution-Tribune last week stated that qualified sites must consist of at least 15 usable acres (20 usable acres preferred) in a land configuration and topographic condition that is conducive for the development of a new hospital campus. The site must be located within the city limits or adjoining the city limits, must have access to a public road (preferably a highway), and must have reasonable access to public utilities.

The owners must be willing to sign an authorization to permit the city and its agents during the option period to enter upon and inspect the site, including the right to conduct testing of the site such as soil borings, environmental inspections and testing, and similar site testing. If the site is selected as a potential site, the owners must be willing to grant the city a nine-month exclusive option to buy the site for an option cost of $1 million. Owners or real estate professionals wishing to submit sites for review must, in part, provide a permission form to be signed by proposed seller as prepared by the city, permitting right of entry and inspection of the property.

The city is contracted with WIPFLI CPA and Consultants to conduct the hospital feasibility study. In July, after hearing a report from the initial phase of the study, Chillicothe City Council members approved to pay the firm up to $200,000 to proceed into the next phase of the study. In this next phase, WIPFLI will conduct a site analysis and selection process with up to three potential locations identified, including the site where the existing hospital is located.

City Advances Hospital Plan
Tuesday, July 28, 2009 by Catherine Stortz Ripley, C-T

CAPTION: The Chillicothe City Council voted 4-1 to proceed with a study regarding the replacement of the existing Hedrick Medical Center with a newer facility. The vote occurred Monday night during the regular council meeting at City Hall. The plan to replace the entire hospital was questioned, but no opposition was voiced at the meeting about replacing the doctor’s building.

C-T Photo/Laura Schuler

The City of Chillicothe is taking the next step in a plan to determine whether to build a new hospital. With a 4-1 vote, council members on Monday night approved an ordinance to spend up to $188,300 to enter the next phase for professional services with WIPFLI CPA and Consultants. The funds for this next step will come from the regular hospital lease payments which are made to the city by Saint Luke’s Health System for the operation of the city-owned hospital.

The firm has studied the feasibility of building a new hospital as well as substantially renovating the existing facility and presented the findings to the City Council during the regular meeting Monday night at City Hall. Following the presentation, members of the Hospital Facility Planning Committee — which had heard a more a detailed presentation a few weeks ago — made their formal recommendation to the council that they would like to see the city proceed with plans to build a new hospital. Third Ward Councilman Tom Douglas voted against plans to proceed with the study, stating that the city was moving too fast on the concept and that he wanted the citizens — not just the city council — to decide whether to build a new hospital.

In the presentation, WIPFLI directors John Dao and Kelly Arduino provided market and demand assessments, financial affordability analysis and square footage requirements. In this next phase, WIPFLI will conduct a site analysis and selection process with up to three potential locations identified, including the site where the existing hospital is located. Dao said that the existing hospital faces issues that other hospitals of this vintage face, including significant privacy issues between patients and the public, inadequate space issues, and inefficient energy infrastructure. Aside from physical concerns, an older facility would be less likely to effectively retain specialists.

Dao said that a new hospital would provide more efficiency, more privacy, better clinical care, better infection control and more space. He said that in HMC's specialty clinic, on certain days, the waiting room is so crowded that people must sit on the floor. He encouraged the city to "strike while the iron is hot" in order to take advantage of lower construction costs as well as government programs that create low interest rates.

The overall plan calls for project costs of $52.5 million, plus the cost of site acquisition if the facility would be built somewhere other than the existing hospital site. Of this amount, $5 million would be paid by the city and $3.5 million through a capital campaign. The city's portion of the project could be paid for through the existing capital improvements sales tax which is due to expire in 2027. That tax generates around $750,000 annually. The balance would be paid for through Medicare reimbursements and revenues generated by hospital services, Arduino said.

Rollie Stadlman, a community member, encouraged the city council to take action. "Chillicothe has visionary leadership and entrepreneurial spirit," he said. "Hedrick Medical Center is one of the best critical access hospitals in the country." But, he continued, the facility lacks in energy and staffing efficiency and the ability to recruit and retain physicians. He also stated that the window of opportunity to take advantage of government programs for low interest loans is open for only a short time.

Douglas said that he'd still like to give the residents of the community an opportunity to decide whether a new hospital should be built. Robert Cowherd, a city attorney, stated that eventually, the residents would have an opportunity to vote on the project in order to approve the issuance of revenue bonds. "This is the most important project we have ever done," Cowherd said. He noted that the hospital is the third largest employer in Chillicothe and having a quality hospital is necessary for jobs, economic development and industry recruitment.

A community member in attendance asked what the lease agreement would be between the city and Saint Luke's, questioning the level of commitment from Saint Luke's. Don Sipes, representing Saint Luke's, said that the hospital has made dramatic strides in the scope of services and quality of care. "Saint Luke's wants to continue that partnership," he said. "We are a concerned and conservative partner."

The WIPFLI representatives stated that the new facility would actually be smaller than the existing hospital, but would reconfigure the space to maximize service. The proposal would call for construction starting in July 2010 and being completed in December 2011.

CAPTION: The Hospital Facility Planning Committee, following the recommendation of a contracted consulting firm, unanimously voted to remove the option of renovating the current hospital from the table following a presentation Wednesday in HMC’s conference room. Officials from the Wipfli firm stated that their research suggested the hospital could “well afford” paying for a new facility.

C-T Photo/Laura Schuler

The consulting firm studying options for Hedrick Medical Center’s future is recommending the replacement of the existing facility. After a unanimous vote, the Hospital Facility Planning Committee decided to take the firm’s advice, effectively removing the renovation option from the table. Wipfli CPAs’ counsel and the committee’s subsequent vote came Wednesday during a meeting in the lower level conference room of the hospital in a report to the committee. The city retained Wipfli CPAs and Consultants services several months ago.

Dean Brookshier, committee chairman, said the cost of replacing the hospital facility compared to an extensive renovation project is virtually similar. “Basically, the price is almost identical. Ultimately, however, the final decision rests with the city council,” he said. Specifically, according to Wipfli’s report, construction of a new hospital would cost around $43.5 million; renovation would come with a price tag of $43.9 million. Wipfli’s report stated that renovation costs have grown significantly over the past two years (roughly $30 million) for a few reasons:

• The complex phasing of construction while maintaining an operational facility (including extended construction time, mobilizations and infection control).
• New construction costs have risen over the past two years;
• The scope of renovation has significantly grown over the past two years. (A 2006 master plan recommended 6,975 square-feet of renovation as compared to a 2008 plan suggesting 42,200 square-feet of renovation);
• While the committee does not recommend renovating the existing hospital building, the decision of just where a new hospital would be constructed (if the project receives council approval sometime down the road) is still up in the air.

Kelly Arduino, Wipfli CPAs and Consultants director, spoke to the committee on the financial aspect of a proposed construction during the meeting. Wipfli’s findings, she said, show the hospital would be able to afford $52.5 million in total project costs with a maximum of $44 million in debt. "The hospital is doing very well financially," she said. "You can well afford a new facility," Arduino told the committee. The hospital's "upswing" has been primarily driven by two factors, the report shows: The large variety of visiting specialists at the hospital and the facility's cutting-edge imaging and telemedicine technology.

Construction of a new hospital, the study showed, would likely yield a 16 percent increase in inpatient and outpatient volume as well as a significant reduction of elimination of nursing vacancies. A new hospital would also pave the way for higher physician satisfaction - resulting in an increased visitation by specialists. It would also combat the non-contemporary image the hospital currently holds, according to study findings, and fight the migration of the population seeking healthcare in the city or at area hospitals.

Arduino said that while the economy is currently experiencing a downturn, Critical Access Hospitals (such as Hedrick Medical Center) now have access to federal stimulus money. While Arduino said there are several financing options available, she recommended taking a closer look at "Build America Bonds," which are funds from the federal stimulus package. She explained that because the hospital is city-owned, the city could qualify for the funds and issue taxable paying 35 percent of the interest for the life of the bond.

The funds are time-limited, which makes action within the next few years critical. Wipfli's project affordability plan includes (for a construction period starting July 2010 and ending December 2012), an $8.5 million equity contribution, which includes a $3.5 million capital campaign and a $5.0 million contribution from the city. Attorney Robert Cowherd, a member of the Hospital Facility Planning Committee said the city could afford a $5 million contribution since some of the major items currently being funded through the city's half-cent capital improvement sales tax (the city-owned golf course and costs associated with the old women's prison property) will likely roll off the budget within the next year or two.

The half-cent capital improvement sales tax nets about $775,000 a year and the city currently has $1.5 million reserved for hospital use. "Building a hospital is the largest project we'll ever do, and possibly the most important job we'll ever do," he said. Wipfli's proposal calls for a facility ranging from 85,785 to 99,955 square feet with space for the hospital and office building. The next step will be a similar meeting between Wipfli and the city council, the latter of which must confirm the board's recommendation.

CAPTION: The Hospital Facility Planning Committee and a few city officials listen to members of Wipfli CPAs and Consultants' market demand and financial affordability analysis during an afternoon meeting Wednesday at Hedrick Medical Center. The study found that it would cost just as much to build a new hospital as it would to renovate the current facility.

C-T Photo/Laura Schuler