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Costs for healthcare facility come in $21 million high

Posted 4/07/15 (Tue)

By Neal A. Shipman
Farmer Editor

The McKenzie County Healthcare Systems, Inc., which was planning to break ground this summer on a new replacement hospital and clinic, as well as plans to modernize the Good Shepherd Home long-term care  facility in Watford City got the “worst of the worse” bad news when bids came in $21,790,899 higher than originally budgeted.
“Total bids came in at $79,147,609, which is $21,790,899 over our budget,” states Dan Kelly, McKenzie County Healthcare Systems, Inc. CEO. “Now that solid construction costs are available, we must determine the next step.”
According to Kelly, the options facing the healthcare system’s board of trustees are simple. Either the healthcare system is successful in reaching the goal of raising $20 million or they will be forced to make cuts to the project, or possibly delay construction.
“In reality the community will determine the course of action we take,” states Kelly. “If we meet our goal of raising the $20 million in pledges or cash, we can proceed with construction as designed.”
As of last week, according to Kelly, the healthcare system had reached the halfway mark of its fundraising goal. But the remaining $10 million needs to be raised quickly if the project is to move forward as planned.
Funding for the project is comprised of a $39,250,900 loan from the U.S. Department of Agriculture and a $12,500,000 loan from the Bank of North Dakota with the balance of the funding coming from equity from the healthcare system and a $20 million local fundraising capital campaign.
According to Kelly, funding for the entire project must be in place before construction can begin.
“The Fundraising Committee of the Benefit Fund of the McKenzie County Healthcare Systems, board members and administration will be reaching out to businesses, industry and residents in an effort to secure the pledges necessary to move forward with construction,” states Kelly. “Fundraising will continue on all fronts with one particular area of emphasis being placed on oil-related companies.”
The expansion of the oil and natural gas development, according to Kelly, has brought the influx of population to Watford City and McKenzie County. And that influx of oil-related workers has resulted in a tremendous amount of stress being placed on the hospital, its emergency room services, and the need for a new healthcare facility.
“Pledges from the oil industry have lagged,” states Kelly Peterson, McKenzie County Healthcare Systems, Inc. vice chairman. “All of the oil companies talk about the urgency for health care. But few have stepped forward.”
Of the $10,072,297 currently pledged, according to Kelly, only $1,948,000 has come from oil-related companies.
“While oil revenues are down, many companies have benefited from their history in McKenzie County, and will benefit into the future once oil prices rise,” states Kelly. “The healthcare system is appreciative of the four oil-related companies that have made pledges in excess of $100,000. We hope and believe that other oil-related companies will step forward with significant pledges.”
According to Kelly, in order for the healthcare system to begin construction this spring, the board of trustees will need to make a decision within the next 60 days as to how to proceed.
“Making cuts to the project is the last thing any of us want to do,” states Kelly. “If we must make changes to the project, those changes will likely impact all areas including the emergency room, clinic, hospital and the Good Shepherd Home.”
For Patsy Levang, board of trustees chairman, the last thing that the board wants to see happen is to build a facility that does not meet the wants and needs of Watford City and McKenzie County.
“The time  is right to build this much-needed medical facility,” states Levang. “Community members, businesses, and most importantly, those companies associated with the oil industry need to make their pledge today.”