Hospital to receive USDA loan for new facility
August 12, 2021
Plans for building a new hospital in Kimball took a big step forward this week. At their meeting on Monday, the Kimball Health Services Board of Trustees announced receiving approval of a $23.4 million direct loan through the US Department of Agriculture’s Community Facilities Direct Loan Program, a crucial first stage in securing financing for the estimated $32 million facility.
“We were thrilled to get that phone call from the USDA office in North Platte that the national office in Washington had approved.” said Ken Hunter, CEO at Kimball Health Services. “The most important step was the USDA loan approval and we are very confident that construction will begin in early fall.”
“We’re on the verge of being able to not only replace a 70-year-old hospital that has served us well, but allows us virtually no space to grow to meet current demand or meet an ever increasing standard of care,” he added.
Over the last five years, demand for services has been on the rise, Hunter explained. “During that time, hospital discharges increased 24 percent, specialty clinic visits increased 65 percent, imaging services increased by 50 percent and surgeries increased from 16 in 2016 to 303 in 2019. Our 1950s facility wasn’t designed for today’s volumes or patient care needs.”
The new facility will be located at the current KHS North Campus. It will include an 18,157 square foot renovation of the former West Elementary School building, an 1,811 square foot basement renovation and the construction of a new single-story, 40,358 square foot hospital attached just east of the current structure.
“We are delighted to have completed the rigorous USDA testing and review process and qualify for a long-term fixed interest rate USDA loan,” said Jim Cederburg, chairman of the KHS Board of Trustees. “We are proud that we have not required any taxpayer support in the past 30 years, and endeavor to continue to provide healthcare independently. The new hospital will provide the physical space needed to offer additional high-tech services in a more private environment to enhance healthcare for the communities we serve.”
While the USDA loan approval is an important first step, the project’s finance package also includes a $6.4 million general obligation revenue bond that must be approved by the county commissioners and a $2.2 million capital fundraising campaign by the Kimball Hospital Foundation.
An independent financial feasibility study, termed as “exhaustive” by Hunter, determined that “sufficient funds could be generated to meet Kimball Health Services’ operating expenses, working capital needs and debt service requirements associated with the new facility.”
Central to the project’s success is the fact that critical access hospitals such as KHS are reimbursed by Medicare for costs incurred for both inpatient and outpatient services, including allowable costs such as depreciation and interest related to building projects. “This means Medicare can be expected to reimburse KHS for more than half of the project cost,” Hunter said.
Key improvements to the new hospital will include larger inpatient rooms and bathrooms to meet current federal standards; widened major corridors; the addition of in-house MRI and CT scanner services; additional patient services such as mammography, cardiac rehabilitation, chemotherapy infusions, orthopedic procedures and expanded surgical options; an updated surgical suite and more space for preoperative and postoperative procedures; an expanded physical therapy department including a walking track and kitchen for home-based activity therapy; an expanded ER department, additional exam room and a covered ambulance bay; a helipad and numerous other improvements.
At their regular meeting in April, the board of trustees selected Haselden Construction of Centennial, Colo. from among three competing general contractors. Their prior work includes expansion and renovation projects for UC Health in Fort Collins, Poudre Valley Hospital, Cheyenne Regional Medical Center, Ivinson Memorial Hospital in Laramie, Pioneer Medical Center in Meeker, Colo. and many others.
Haselden Construction is hosting a meet and greet event for prospective area subcontractors this Friday, 4 to 6 pm at the Sage Brush in Kimball.