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Hospital board gives nod to Phase 2 of new facility plan

By Sue Sitter - | Apr 24, 2021

Submitted Photo An aerial photo of the Heart of America Medical Center campus from a report by accounting firm Wipfli, LLP lists drawbacks to the current facility’s design.

The Good Samaritan Hospital Association Board voted unanimously in a special meeting April 14 to move forward with a project to build a new facility for Heart of America Medical Center.

Hospital CEO Erik Christenson presented the board with a report created by accounting firm Wipfli of Milwaukee, Wis., which described the present hospital structure as “outdated” and a financial burden to the organization.

Christenson showed the board a floor plan of a rambling structure with multiple additions, some dating back to the 1940s.

“Much of the building is very, very aged,” Christenson told the board.

Christenson said the report by Wipfli indicated “that (if the hospital was not moved to a new building) there would be an opportunity cost of $2 million, give or take.”

Some of the costs Christenson outlined included upkeep costs and “of course the cost of trying to heat a 150,000-square-foot structure.”

Christenson formed a construction steering committee after reviewing the report to explore building a new facility, which Wipfli suggested would cost about $40 million, much of which could be financed through the U.S. Department of Agriculture rural development programs.

Members of the steering committee spoke to the board.

Craig Zachmeier, who sits on the steering committee and the hospital board, said, “We talked about the economic impact this structure would have. We employ about 290 people directly from Rugby at our facility. (The hospital) paid out almost $18 million in salaries, that is about a $10.8 million impact into other industries and other jobs. Just the economic impact and the jobs that this project is going to create for this whole area is going to be the biggest economic impact that this area has seen in a very long time.”

“I did some further research through the Economic Policy Institute,” Zachmeier said. “In healthcare, nationally, for every 7.8 jobs, it creates 13.5 indirect jobs. So, it doubles (the number of jobs) indirectly. So, at 290 employees, the indirect jobs that this facility has not only in this community and the surrounding area but the other industries is quite impressive based on the national standard. There are going to be some percentages give or take there but that’s the national standard, that’s obviously going to have an impact.”

Board member Wayne Trottier asked steering committee member Neil Lotvedt, who owns a local construction company to speak. Lotvedt said his company had been involved in projects on the hospital and Johnson Clinic buildings in the past.

“Right now, in my opinion, I’ve added on to that (structure) way too many times, starting in the ’70s,” Lotvedt said. “And how many times can you add onto a building?”

Lotvedt spoke about the hospital’s second and third floors, which house long-term care patients.

“My parents were out here for three or four months in long-term care. It’s a horrible place,” he said of the building. “It should be at ground level so they can see the grass and see the snow. It’s just not right, especially in this pandemic. It’s horrible.”

“I honestly believe as a board, you guys don’t have too many choices,” Lotvedt added. “You can’t keep remodeling those buildings. The clinic, which you now own, if you didn’t before, is a (1940s) building. I remember working with that.” Lotvedt indicated he had encountered asbestos working with the older structure.

“The asbestos in this building, if this has to be torn down or whatever, you’re going to have a lot of questions. What are we going to do with this place?” Lotvedt asked.

Lotvedt suggested including the hospital in a comprehensive plan the City of Rugby is working to develop. “Hopefully, they can come up with a solution for what could be done.”

“I don’t think you can worry about that right now,” Lotvedt added. “You have more things to worry about like, can you keep this place afloat?”

“Or should we split off, kind of like the consultant said?” Lotvedt asked, adding, “Consultants aren’t always perfect, but I don’t think there are too many options.”

The “splitting off” Lotvedt referred to came from a recommendation by Wipfli to fund only the construction of a new hospital and separating the long-term care unit from the project.

Long-term care services would be moved to Haaland Estates, which would be remodeled using a campaign to raise the capital needed for that project. The Wipfli report estimated the long-term care project would cost an additional $15 million, which would be more than the hospital could afford.

Christenson said the organization was considering contacting the Sisters of Mary of the Presentation Health Care System of Fargo about possibly buying the long-term care facility.

Trottier made a motion for the board “that we proceed with exploring the options for the care center.” The board approved the motion unanimously.

The board next voted unanimously to give the steering committee authority to investigate possible sites for the new building, interview architects and investigate the possibility of hiring a builder’s representative or construction manager.

Lotvedt told the board garnering support from local legislators, city and county government entities, the Chamber of Commerce, larger businesses in the community and the local school district was critical. “We also need to get the Towner area, Maddock area and Dunseith area and areas we serve,” Lotvedt added, noting documenting significant support from the community served by the hospital would be necessary for USDA funding.

He also cautioned board members to consider how relocating the hospital on a new plot of land would take tax revenues away from the school district, city and county governments.

Lotvedt also said it was important to work closely with state government officials during the process. “If there’s something the state doesn’t approve of and the architect has to change something, you can tie up a set of plans for months.”

“Other than that, I believe 100 percent that you did the right thing as a board,” Lotvedt added.

In other business, Christenson told the board the hospital would send panels of about seven HAMC employees to tour hospitals in Hazen and Grafton. Both communities had replaced their aging hospitals with newer structures using different strategies. The Grafton hospital board had enlisted Wipfli’s help for their project, while Hazen found a way to repurpose their old hospital building.

Members also voted to give Mike Graner, administrator of Heart of America Correctional and Treatment Center, a seat on the board. Graner suggested sending a small group to visit Riverside Health Care, a facility in Crookston, Minn., where he had worked before taking his position in Rugby.

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