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Hospital Commissioners plan for 2017, approve budget

The Adams County Public Hospital District No. 2 Board of Commissioners set their sights on the future of the district with plans for the upcoming months, as well as approving the 2017 budget during the Nov. 17 meeting.

CEO/CFO Gary Bostrom provided updates on the status of the ongoing construction at the hospital and the status of the application to convert East Adams Care Center (EACC) into a wing of the hospital. The construction project is currently in Phase C, the final stage, and Bostrom said the potential substantial completion date is Nov. 28.

Bostrom said the initial intent for the final stage had been to complete the portion of the building that would house x-ray and CT. The rooms were supposed to be complete nearly two weeks prior, but they are still unfinished and the equipment cannot be installed.

The inability to utilize the rooms for those services has cut into the district’s financial gain during the time of construction, Bostrom said. Currently the facility is utilizing a mobile CT unit, but the unit has to be returned by Dec. 5.

At this stage, Bostrom said the contractors have entered the penalty phase of the contract, allowing the district to pursue damages.

Bostrom explained it is costly for the district to move forward with collecting damages because of legal fees, and he is inquiring with the contractors if they will complete additional, smaller projects at no cost to help compensate for the loss because of the extended construction.

Bostrom added the project is not progressing like it should, and they will enter into negotiations when Phase C is complete. He explained he is hesitant to accept the November completion date, and believes it will be around mid-December when the project reaches substantial completion.

The contractors have moved to working on Fridays and putting in overtime hours in order to progress quicker on the project, Bostrom stated.

Aside from waiting for the final portion of the building to be operational, the ongoing issue of the roof continues, Bostrom said. It still has standing water and there have continued to be leaks, even with multiple attempts to fix the issues.

Bostrom stated the district will not sign off on the roof until all of the updates have been made and the roof is functioning properly.

The application for EACC to become a wing of the hospital has been approved by Noridian, and now the state has to approve the application before the conversion can occur, Bostrom said. The state has sent representatives to the facility for a review and now they are working to see what requirements have to be met before the conversion can proceed.

Bostrom added all qualifications must be met before EACC can become a wing of the hospital. This includes completing an update of the HVAC system and installing a separation of power, which would provide a 24-hour battery backup for the facility.

Along with other smaller items to be addressed, Bostrom said the facility most likely will not become a wing of the hospital for an estimated three to four months. This time will be needed to complete the checklist of qualifications the facility must meet prior to the application being approved by the state.

Bostrom explained the facility should receive the final report by Nov. 21 and then can progress with plans. Depending on the scope of the projects, Bostrom said the Board may have to hold a special meeting to discuss plans for the facility.

Before approving the 2017 budget, Bostrom provided a financial update for the Board.

The current month at East Adams Rural Healthcare showed the district over budget by $73,553. Bostrom said this amount does not include the EACC budget, and if it did, the district would be $203,987 under budget for the month.

Bostrom said the district recorded a net loss of $260,199 for the current month, and a year to date loss of $700,888. At this time last year, the district had a positive bottom line with an income of $1,361,057.

Due to the remodel, Bostrom said it has caused several months of reduced revenue and increased expenses, as well as limited the amount of beds available in the facility. For EACC, the facility cannot begin to accept patients again until the conversion is complete and the facility is approved as a wing of the hospital.

Bostrom said each month the construction continues into, the district can expect to record additional losses.

The 2017 budget, approved during the meeting, is $18,451,902. In 2016, the budget was $1.4 million negative for the district.

Bostrom said the district has a good rating in the financial strength index, and currently has $3 million in reserves. A portion of the monies is dedicated to the current construction project, Bostrom explained.

For the levies with the county, the general obligation bond has an estimated levy collection and is budgeted for $445,000. The EMS levy has $265,000 budgeted in collection for the upcoming year.

Bostrom said he anticipates a positive revenue next year since now the nursing home and hospital financials are listed together.

The next Board of Commissioners meeting is scheduled for Thursday, Dec. 15, at 5:30 p.m. in the basement conference room at EARH.

 

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