Hospital Board considers construction project adjustments

The Board of Commissioners for the Adams County Public Hospital District No. 2 addressed concerns with remaining within the budget for the ongoing construction projects during the regular meeting on May 26.

Two representatives from NAC Architecture attended the meeting to discuss the progress and issues that have been discovered during construction.

While the contingency money for the entire construction project has not been used yet, NAC Representative Michael O’Malley voiced his concern with how close the district is to having to use those funds.

The estimated completion date for the construction project is in September, and the final phase is yet to be started.

Throughout the project, NAC has encountered multiple structural issues. The main problem, O’Malley said, is the roof deck decay and rust.

The cost for fixing the unforeseen issues has led to increased costs for the district. Another ongoing issue is the roofing, but those repairs are being made without any cost to the district because the issues were caused by errors during construction.

The roof still needs to be completed and has developed issues with drainage and proper covering on the existing portion of the hospital. On the new construction, CEO/CFO Gary Bostrom said the final caulking needs to be completed and then the helicopter landing zone will be functional.

O’Malley explained with the overhead costs exceeding the initial budget, he would like the commissioners to create a list of tasks to cut from project in order to reduce costs and pull money out of the project, without effecting patient care.

Bostrom interjected to mention frustrations not only with the unforeseen issues, but also lack of communication. Bostrom said changes were made to the project without being discussed or approved by the district first.

O’Malley addressed the concern and explained NAC has been working hard for the district for over two years. The company first came in to assist with upgrading the hospital to move into compliance with state regulations, and agreed to stay on with the district after the bond measure passed.

Prior to the construction project, O’Malley said NAC and Apollo Solutions worked hard with Centers for Medicaid and Medicare Services (CMS) and the Department of Health to ensure the local hospital stayed open. But because of the citations from the state, NAC had to work on an accelerating schedule to begin the project.

During that time, O’Malley explained the market went down and the prices for construction increased. The district made a few initial changes to the project during this time, and an alternate project list allowed NAC with the ability to know the prioritization of projects.

O’Malley agreed the communication could have been improved, but overall, the district needed to be patient and understand changes occur constantly during a project. O’Malley said NAC is working hard to stay under budget, but with unforeseen issues and increased costs for products, it truly is a challenge.

“We’re going to keep working with you and get it done right,” O’Malley stated.

O’Malley provided the commissioners with a sheet explaining the cost of changes, which have already occurred with the project. Of the $325,071 total cost, $118,806 is due to unforeseen conditions while $132,019 is from owner changes.

The unforeseen conditions portion is roughly 40 percent higher than anticipated, O’Malley said. These are the issues discovered during construction, and include the decking issues, as well as having to add support walls during construction in the second phase of the project.

Bostrom explained Apollo has not utilized any of the contingency money set aside for their portion of the project. If Apollo does not use their contingency money, Bostrom said that is over $100,000 being returned to the district.

O’Malley stated NAC would like the commissioners to find cuts in order to keep money in contingency. There is roughly $1.3 million of bond money remaining before the district will need to use the reserves, Bostrom added.

The commissioners also had an opportunity to voice their frustrations to NAC. The primary frustration is the ongoing issues with the roof, which is the responsibility of a sub-contractor hired for the project.

The second portion of the frustration revolved around the basement. The commissioners said they would like to see the basement completed so the space can be utilized.

O’Malley agreed with the commissioners regarding the frustrations, and mentioned Apollo, NAC, and Leone and Keeble have continued to work hard throughout the project.

He said this is a tough and messy project filled with complications, and the work Leone and Keeble has been able to complete is close to miraculous.

He asked for the commissioners to remain patient during the final months of construction and to relay any concerns they may have.

NAC representatives and the commissioners will meet during a construction meeting on June 8 at 5 p.m. to discuss potential cuts to the project.

Bostrom updated the Board regarding the change from NextGen to Harris computer system. The main change is Harris is not going to upgrade to Meaningful Use 3. Harris will give the district the software upgrade for the inpatient program, but Bostrom said he is currently unsure if the district will have to pay for the installation and training to use the program.

The district is also moving forward with an application to CMS regarding the conversion of the East Adams Care Center (EACC) into a wing of the hospital. Bostrom said Dingus, Zarecor and Associates (DZA) is currently assisting him with completing the application.

During the finance update, Bostrom explained the district had a substantial amount of write-offs and contractual adjustments. If these are applied to 2015, Bostrom said it will have a positive effect on the bottom line.

Currently, the budget is under by $33,445 for the month and deductions from revenues were over budget by $152,182. The district currently has a net income of $54,074 and a year to date loss of $59,408.

EACC Interim Administrator Michele Johnston provided an update regarding the facility and the progress made in the past month. The facility currently has 19 patients, of which, multiple are Medicaid patients.

Johnston explained since arriving at the facility, she has been meeting with employees and having one-on-one discussions with the staff members in order to develop relationships and listen on how the facility can improve. Johnston said the first priority is an improvement in communication.

During the Medical Staff report, Dr. Marty Sackmann mentioned the communication has already improved drastically between EACC and the hospital.

He mentioned the linear structure of authority has created a better strand of communication.

At EACC, Johnston explained one of the largest issues the facility is facing in regards to revenue is the amount of agency nurses on staff.

Johnston also asked for the board to allocate $1,000 towards the purchase of fireworks for the annual event.

This year, EACC is hosting the firework display for the community on June 30.