USDA to health board: cut cost of hospital

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$28-million loan denied

PINEDALE – The loan application to build a $28.3 million critical access hospital in Sublette County wasn’t approved by the United States Department of Agriculture Rural Development division.

“This package as presented will not be approved,” the USDA’s Lorraine Werner told the Sublette County Rural Health Care Board and staff.

The USDA has said they’re still interested in helping fund the project, but it would have to be scaled back or get a lot more monetary support from the community or grants.

“I want to make this happen,” Werner said. “I’m just trying to save you money.”

Werner was in Pinedale on Wednesday to explain her decision to the health board and public. The reason why the USDA is turning down the initial application? “We were worried about the affordability once it’s built,” Werner said. “We don’t think it’s viable; it’s too big.”

After years of conducting studies and community meetings, the frustration among the hospital board and staff was palpable as Werner explained the USDA’s decision to them.

The feasibility study, conducted by BKD, that the health board submitted with the loan application said the project was viable, after all. With some of the assumptions, however, Werner said there was no buffer room.

“If you have one major hiccup, you won’t have the money to move forward,” Werner said.

Werner also questioned several of the decisions the board made, including why the existing Pinedale clinic couldn’t be turned into the hospital, the size of the land for the hospital, the building’s construction cost and what the board had done to assure Big Piney after the hospital is built.and Marbleton that services won’t be cut there

The health board was able to explain the rationale behind all of their decisions, and Werner told them that the information should also have been included in the Preliminary Architecture Report. The PAR, in other words, should have not only included information on what the board had decided, but also some reasoning explaining why other ideas were dismissed.

Moving forward, Werner told the board two things she’d like to see. Value engineering was No. 1, looking where some cuts can be made to get the price of the hospital down and also what services can be phased in to the new hospital over time.

The board has done some of this already, like its decision to keep using the existing ambulance barn at the Pinedale clinic instead of building one in the new hospital. Now it will have to make some tough decisions moving forward. It might need to cut up to $8 million off the price tag to get a USDA loan.

“I’d be really comfortable with anything under $20 million,” Werner told the board.

Werner also asked the board what it could do to assure that the Big Piney / Marbleton clinic would continue to operate.

The district earmarked $600,000 at its January meeting, and got permission from the county to upgrade the building in February, for the expected, required upgrades the facility needs to stay up to code. That decision, however, still left people skeptical.

Community support is important for the project, and Werner said she’d like some of that support to materialize into monetary pledges. She said Pinedale Town Council member Tyler Swafford told her the town would put $1 million toward the hospital. “That was the first positive thing I’ve heard from an elected official (not on the health board),” Werner said.

It’s also no secret the county has enough money to write a check for the entire cost of the project and hasn’t pledged anything, Werner said.

Despite turning down the initial loan application, Werner assured the board that the project could still get USDA funding if some adjustments are made.

“We see the need and know you do need the project, the question is what do you really need?”

The public wasn’t allowed to comment at Wednesday’s informational meeting, but Werner assured everyone that she would schedule a future public meeting after some decisions are made.

“Even if I have to be here every week, we are going to break ground,” Werner said. “This is not dead by any stretch of the imagination.”


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