West Park's pitch

Posted 8/10/10

Park County voters will help answer that question next Tuesday, when they decide whether to support a $14.2 million specific purpose sales tax to reconstruct much of the non-profit hospital.

The temporary 1-cent tax would help add or renovate …

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West Park's pitch


Few attend presentationsOfficials and trustees at West Park Hospital in Cody know their nearly 40-year-old facilities must be modernized.“This does need to happen, it's just the question of how,” said West Park CEO Doug McMillan, at a recent public presentation in Powell.

Park County voters will help answer that question next Tuesday, when they decide whether to support a $14.2 million specific purpose sales tax to reconstruct much of the non-profit hospital.

The temporary 1-cent tax would help add or renovate more than 110,000 square feet of space at West Park, improving and relocating the hospital's emergency, imaging, laboratory and financial services departments. It also would demolish the now-vacant Coe Building and provide space for future growth.

The total project cost is roughly $26.2 million; the other $12 million would come from the hospital's reserve accounts.

The project represents the second phase of a three-phase, roughly $55 million plan to renovate West Park's facilities.

The $14.2 million is the only component of the plan that West Park plans to ask taxpayers to directly support.

“We feel it's responsible, it's affordable,” said McMillan. West Park CFO Pat McConnell said the cost of constructing a new hospital would be between $120 and $150 million.

Officials, staff and trustees at the hospital have outlined a litany of problems with the current facilities — chiefly, that they're outdated, outgrown and out of code.

McMillan said the hospital was designed for a community the size of Lovell.

Among the facility's shortcomings: West Park staff currently have to pile medical equipment on top of medical equipment in some departments; the emergency room entrance — at the back of the facility — is hard to locate; and patients, doctors, nurses and hospital visitors all use the hospital's lone corridor.

West Park currently has three rooms for emergency care, each with two beds. When doctors or nurses ask extremely personal questions — such as an individual's sexual history — the answers are only a drawn curtain away from being overheard.

“Just not good care,” said McMillan. “Not good care at all.”

One of the tough sells in Powell has been why residents in the Powell Valley Hospital District should pay for the West Park Hospital District — as the 1-cent tax would be charged county-wide. Both hospital districts, governed by their own board of voter-elected trustees, collect up to three mills in property taxes each year.

“We feel this is a facility that everyone in the county benefits by,” said McMillan. He noted that some Powell residents get their medical care in Cody while some Cody residents get their care in Powell; approximately 9 percent of West Park's more than 61,000 annual visits come from Powell, and a similar percentage of Powell Valley Hospital's visits come from Cody.

“It's important that both facilities continue to have excellent facilities,” said McMillan, saying the hospitals frequently work together.

McMillan said he approached Powell Valley Healthcare CEO Rod Barton about the Powell Hospital's needs on a possible joint project, but was told Powell wasn't ready to move forward on planned upgrades to its emergency department.

Barton said that meeting took place in December, two or three weeks before West Park took its proposal to the Cody City Council.

The Powell Valley Hospital board declined to endorse West Park's project earlier this year, citing the rough economic climate.

“We (West Park) are in a place, because of the age of our facility, to move forward,” McMillan said. If Powell Valley Hospital officials seek a special purpose tax in the future, West Park officials have said they'll be supportive.

Officials and trustees from the Cody hospital have been busy getting out the word on its modernization plans — including a pair of recent trips to Powell.

“We've been actively trying to get in front of as many Park County residents to address the project (as possible),” McMillan said. However, the two presentations in Powell drew a total of three attendees from the general public; an Aug. 3 presentation was scrapped when only one individual showed up.

Questions from the two Powell residents who attended the July 28 meeting centered primarily on the financing of the project.

One inquiry from Barbara Collins concerned language in the ballot proposition which says the tax can, in part, be used for “repayment to West Park Hospital District of funds advanced internally and through revenue bonds issued for such purposes.”

However, McConnell said such repayment shouldn't actually be necessary. The only way the hospital would be repaid is if sales tax collections dragged and West Park ended up having to front more than the $12 million it's committed to the project.

Powell resident Amy Andreasen asked why the proposition is on the primary ballot, which is generally has a lower turnout than the general election.

McMillan said the only consideration in the timing was cost savings. The hospital's administrators believes construction prices will rise soon. Waiting until November would push the start of construction back to spring 2011 and, McMillan said, end up costing between $1.5 and $3 million more.

“Have you discussed a Plan B?” asked Andreasen.

Plan B, McMillan said, was asking voters within West Park's tax district to support a general obligation bond. That option would be funded by additional property taxes within West Park's district, and has been used for hospital projects in Park County in the past; however, West Park's board of trustees didn't believe it was an appropriate time to ask for increased property taxes.

An obligation bond would bring less revenue each year than a 1-cent tax, resulting in more interest to pay on the debt.

“That just means more property tax,” said McConnell.

West Park Board Chairman Carol Lea Roberts also noted a bond would only be paid for by property owners.

It would also last longer — roughly nine-and-a-half years to collect $14.2 million, or, if the board chose not to include the $12 million from reserves, close to 25 years. The sales tax, West Park officials say, would last just more than two and half years.

Given that the hospital currently has $12 million in reserves, Andreasen asked how long it would take for those reserves to build back up if they were spent.

McConnell said it would depend on finances.

“A year like last year (a poor financial year), it would take a while,” he said.

“Has that been considered?” asked Andreasen. “Just to wait?”

“We might have to,” said Roberts.

“What we're saying is, the project's not going away,” said McConnell.

He said West Park could look at raising fees, but it also can't price itself out of the market.

McConnell said the hospital will collect only about $1.5 million in property taxes this year, while losing around $5 million to charity care and bad debt from those who don't pay their bills.

Barbara Collins asked if it was possible for the hospital to seek donations to pay for the charity and indigent losses, but McConnell said that wouldn't be feasible. He noted it took three years for West Park to raise a smaller sum — $2.8 million — for the Spirit Mountain Hospice project.

Receiving federal funding for this phase of contruction was not an option.

Given the economic climate, “Our (congressional) representatives were not in a position to approve any earmark or appropriation for projects like this,” McMillan said.

McConnell noted that the first phase of the hospital's modernization — the construction of the nearly $14 million Cathcart Health Center on Cody's West Strip — was funded through financing the hospital obtained on its own; West Park similarly plans to internally fund a $15 million third phase to relocate patient rooms, the kitchen and other projects over the course of several years.

Also seeking independent financing for the $26.2 million second phase currently before voters would be difficult, McConnell said.

“There's a lot of balls we would have to juggle to make all three phases work,” he said.

That, West Park Hospital officials feel, leaves the temporary sales tax as the best option.

McMillan said 30 percent of the tax would be paid by tourists, meaning Park County residents will pay only 70 cents for every $1 of the project.

Citing Internal Revenue Service worksheets, West Park officials say the cost of a 1-cent tax would be like buying a bottle of water a week for most people, though, “that will change if you go out and buy a car,” said McConnell.

If approved by county voters, “At the end of 31 months, we're going to have the project paid for,” said McConnell, adding, “That's pretty amazing to do this size of a project with no debt after 31 months.”

Andreasen said she had gone into the presentation ready to put up signs telling passers-by to vote no on the $14.2 million tax; following the dialogue, she said she had to think about it.

“Coming here changed my mind, frankly,” she said.

Collins planned to mull her vote over.

“I'm not sure still,” she said.