HomeMy WebLinkAbout04022015 City Council Work Session Notes - CHC/Prov Expansion t1\-0)
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Hospital and Clinic Expansion Discussion vjyy'a ' .
30-year
Scenario A: @ 4.5%
Clinic cost $ 2,795,280
PSMC cost $ 2,270,831
Total $ 5,066,111
Clinic: $ 2,795,280
less HRSA grant $ (1,000,000)
Clinic financing $ 1,795,280 $ 118,500'LAr (lc
PSMC: $ 2,270,831
less est. cost-based reimbursement(30%) $ (681,249)
PSMC financing $ 1,589,582 $ 106,500/t ( 4I1
Annual borrowing cost: $ 225,000/L(1/ ,tx1
30-year
Scenario B: @ 4.5%
Clinic cost $ 2,795,280
PSMC cost $ 2,270,831
Total — — ileu) \00 irk) --- $ 18,000,000 `/
Clinic: $ 5,400,000
less HRSA grant $ (1,000,000)
Clinic financing $ 4,400,000 $ 275,000
CYV
PSMC: , NO,47 $ 12,600,000
less est. cost-based reimbursement (60%) $ (7,560,000)
PSMC financing $ 5,040,000 $ 315,000
Annual borrowing cost: $ 590,000
Back-of-the-Napkin:
Book Value Hospital/LTC $ 20,800,000
Remaining Principal LTC 23,250,000
Est. Depreciation Shortfall $ (2,450,000)
Remaining interest on bonds $ 12,231,045
Remaining Life of Bonds: 18 years
Estimated sales tax through 2033 18,000,000
Needed in total to build surplus 7,349,994
Needed each year to build surplus 408,333 Worse case
Needed each year to build surplus 136,111 Best case
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• • SEWARD COMMUNITY HEALTH CENTER
PO Box 2895/417 First Avenue -- Seward,AK 99664-2895
41 °COMMUNITY PHONE (907) 224-2273
HEALTH FAX (907)224-8501
t,CENTER www.sewardhealthcenter.org
April 2, 2015
Seward City Council
City Hall
410 Adams Street
Seward, Alaska 99664
Dear Mayor Bardarson and Council Members:
On behalf of the Board of Directors of Seward Community Health Center we appreciate the
Council's willingness to consider the HRSA capital grant opportunity. We acknowledge that the
impending grant application due dates create expedited decision making time frames for both
the Board of Directors and City Council. The Board of Directors devoted considerable time and
discussion to the proposed facility expansion at its most recent meeting held on March 26,
2015. Both bodies need adequate time to develop, analyze and evaluate all of the available
options before making a final decision to move forward on this project.
In an effort to take advantage of the $1 million federal grant opportunity while also providing
our respective governing bodies and the general public the additional time needed to
adequately assess the project and its associated financial impacts, the following two
recommendations approved by the Board are offered for your consideration:
• "To approve a resolution authorizing that an application up to $1 million to the HRSA
Health Infrastructure Investment Program (HIIP) be submitted in support of the
community health center portion of the proposed expansion phase of the hospital facility
improvement project."
• "That City representatives continue to work with representatives of SCHC and
Providence Seward Medical and Care Center (PSMC), and their respective consultants, to
research, analyze and prepare conclusions and recommendations on the design, costs,
phasing and financing options of this proposed development project and that ample
opportunities be provided for all parties to make well informed decisions no later than
September 1, 2015 on whether the grant application should be continued or withdrawn."
Thank you again for your continuing support of the community health center and the healthcare
needs of the people of Seward. We stand ready to continue working collaboratively with the
Council and representatives of PSMC to thoroughly analyze this project.
Richard (Dick) Cruse, President
Board of Directors
Cc/ SCHC Board of Directors, Jim Hunt, Patrick Linton, Joseph Fong
Where your health matters