Preparing for the future
Humboldt County Memorial Hospital secures key loan
HUMBOLDT — A major expansion plan to guarantee a bright future for Humboldt County Memorial Hospital is on track to become a reality. The hospital has gained approval from the U.S. Department of Agriculture for a 40-year, fixed-rate loan to support a major building project that could begin as early as April 2018.
A $13.9 million loan with an interest rate of 3.25 percent has been made possible by a USDA program created to boost economic development in rural communities.
According to Michelle Sleiter, the hospital’s chief executive officer, this loan is a key part of the financing arrangements for the facilities master plan that has been developed to keep HCMH state-of-the-art in the years ahead.
She said the overall budget for a hospital expansion that is being proposed is $19.2 million.
A major assessment began in 2015 to determine what enhancements were needed to guarantee the hospital’s readiness to serve its community for many years hence, Sleiter said.
“We’ve been working on it since July of 2015,” she said. “We were having growth. So, we started to outpace our current space. That led us to moving a little bit faster maybe than we had originally anticipated in regard to a building project such as this.”
Sleiter said the demand for the multitude of patient services HCMH provides has been on a significant upswing.
“In the last couple of years we’ve seen about a 28 percent growth of services,” she said. “Primarily outpatient services.”
The plan being considered to bring about a facilities expansion envisions the renovation of existing space near the present hospital entrance and the construction of a two-story addition in the area that is currently the hospital’s parking lot.
“It’s almost 40,000 square feet, 39,000-plus,” Sleiter said of the new construction. “There’s almost 4,000 square feet of renovation in the current hospital building.”
A major portion of the new space would be devoted to a new location for the primary care physicians who serve the community and their office teams.
“It’s a two-story building. The first floor would be the primary care clinic as well as the new specialty clinic,” Sleiter said. “They are making up about 20,000 square feet of the new space.”
The existing primary care clinic would disappear once the new structure is ready.
“The intention will be to demolish the current clinic building and that space would be transitioned into parking,” Sleiter said. “So, it will increase parking from 60 to 100 spaces.”
Improving the attractiveness of Humboldt as a place to practice for primary care physicians is a key factor in the building plan that is under consideration. Sleiter said it is understood by just about everyone that attracting and keeping those care providers is important to the future of the hospital and the community.
“The most important thing is attracting primary care physicians,” she said. “They drive our business. An attractive facility will help us in the recruitment and retention of the providers. So, that’s been our No. 1 focus.”
Having the primary care clinic part of the hospital building will also be a convenience for a key part of the patient population HCMH serves, according to Sleiter.
“Medicare is about 60 percent of our business,” she said. “Having our services under one roof is very conducive to the health care of our citizens here in Humboldt.”
The project will strengthen the hospital’s capabilities in a number of care areas in addition to primary care. The new and renovated spaces also will benefit specialty services, rehabilitation services, cardiopulmonary services, diabetic education, dietary support, patient education, Humboldt County Public Health and assorted internal HCMH administrative needs.
Securing the USDA loan was the key development that makes it economically feasible for this major construction undertaking to move forward, according to Sleiter.
The next steps are a public hearing, bid solicitation and final board approval to launch the project.
“The final decisions are yet to be made,” Sleiter said. “Right now we’re going through the formalized process of getting the resolutions set, the public hearings set, finalizing our bid packages.”
Sleiter said the public hearing will be at the Nov. 27 meeting of the hospital’s board. If all goes without a hitch, bid solicitation could proceed soon thereafter. If the bids received are acceptable to the board, construction could begin as early as April 2018. By sometime in 2020 the new and renovated facilities could be outfitted and ready for occupancy.
The largest portion of the funds needed for this project will come from the USDA loan, according to Sleiter, but some other funding is also being arranged.
“The USDA requires us to use some of our cash equity as well as have local loans to show local support,” she said. “We’ve worked with our local banks to get a percentage there as well. We’re also looking at some other rural development pass-through loans that are at zero interest as a couple of options.”
Sleiter said it is not anticipated that either a major fundraising capital campaign or increased tax levies will be needed to accomplish this construction project.
“Based on our current financial feasibility study we are able to process this improvement project and renovation with our operational funds,” she said.
As this significant enhancement of HCMH draws closer to becoming real, Sleiter said it is an exciting time for her, board members and everyone who cares about the hospital.
“It’s scary and exciting all at the same time,” she said. “For the sustainability for the future, this is definitely a long-term strategy for us.”
Her enthusiasm for the endeavor is in sync with a statement about the project released by Rod Harklau, the board president:
“The board of trustees has considered an expansion that would include a physician’s clinic for a number of years. Humboldt County Memorial Hospital is a great asset for our area businesses and residents alike. Our goal is to provide the best care and be a provider of choice for the county in an ever-changing health industry. We are currently taking necessary steps towards making a final decision to proceed.”
Humboldt County Memorial Hospital is a 21-bed Critical Access Hospital, which includes acute and skilled care along with a 28-bed long-term care unit. HCMH also provides a wide variety of outpatient diagnostics services, 24-hour emergency room coverage, ambulatory surgery, rehab services, home and community health services, nutritional services and ambulance services. In addition to medical services, the hospital campus also includes Springvale Independent and Assisted Living for seniors. There are 240 employees. It is governed by a seven-member elected board of trustees.