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St. Charles obtains bond approval from city

For local construction, renovation


by: HOLLY M. GILL - St. Charles Health System received approval from the city of Madras to move forward with an $80 million bond issue for improvements across the whole Central Oregon hospital system. An estimated $12 million of that will be spent for improvements and construction at St. Charles Madras.When St. Charles acquired Mountain View Hospital in Madras at the beginning of 2013, among the key points in the transfer agreement was a promise to spend at least $10 million to improve the local facilities.

Last week, the Madras City Council approved St. Charles Health System's request to issue $80 million in new debt to finance capital improvements and construction, with $12 million of that to be dedicated to St. Charles Madras, and about $30 million to a new 60,000-square-foot facility in Prineville, to be called St. Charles Prineville.

Jeanie Gentry, CEO of both the Madras and Prineville hospitals, said that since St. Charles acquired Mountain View, it has already invested over $1 million in capital improvements, including the installation of equipment, the switch to electronic medical records and needed upgrades.

"This building is going to be above that $10 million mark," she said, adding, "This year, before we get into construction, we're going to have another half-million (dollars) in capital improvements."

At its Feb. 25 meeting, the Madras City Council unanimously approved the request by St. Charles to take out tax-exempt bonds — an approval that St. Charles must obtain in each community as part of its intergovernmental agreements.

Gentry, who attended both the Madras City Council and Prineville City Council meetings with finance officers from St. Charles, said that the approvals don't mean that the cities will have any liability. "There isn't any liability on the part of the city for the tax-exempt bonds," she said.

Once the bonds are issued through Hospital Facility Authority of Deschutes County, St. Charles Health System will be able to move forward with its plans for renovation and an addition to St. Charles Madras.

As recently as January 2012, before the asset transfer, Mountain View Hospital was moving forward with a renovation and construction project estimated at $22.4 million. HDR Architecture had drawn up plans for the project, but bids came back 6 percent higher than anticipated.

The project — which was first bid in 2010, and then again at the end of 2011 — was delayed by the downturn in the economy, and the likelihood of cuts in Medicaid funding, which has since been realized.

While the hospital may use ideas from the old plans, Gentry doesn't expect to use the exact plans. "We're going to work with a different architecture firm," she said. "It will basically be a new hospital, keeping some of the old hospital."

"For the initial proposal to the (St. Charles) board, we've contracted with Neenan Co. We're trying to get the proposal all finished to take to the May board meeting of St. Charles," said Gentry. "That's our target."

Construction would likely begin next year. "In my conversations with the architects, we would be pushing it to start any consruction this year," she said. "They feel pretty confident that they could break ground and finish within 2015."

In the meantime, the Mountain View Hospital Board of Directors is continuing to meet quarterly. "Their main function is to make sure that the construction gets done within four years of the transfer," she said, noting that St. Charles has until the end of 2016 to complete construction.



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  • 1 Oct 2014

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