Aspen Valley Hospital's
2009 Annual Report
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AVH Master Plan - Newspaper Articles AVH looks to taxes, philanthropy for expansionby Curtis Wackerle, Aspen Daily News Staff Writer Friday, July 2, 2010 Roughly $80 million of the estimated $120 million cost of Aspen Valley Hospital's four-phase expansion will need to come from a combination of fundraising and new property taxes, AVH CEO David Ressler said. During lengthy hearings on the hospital, the City Council has barred discussion about how the hospital plans to fund its expansion, saying that such considerations should not influence land use decisions. Hospital finances are the purview of the AVH Board of Directors, which will have to get voter approval for property tax-financed general obligation bonds to pay for a portion of the expansion. AVH is currently seeking final City Council approval for phase two, which is the most significant phase, size wise. It includes expanding the number of hospital rooms from 16 to 27, and adding space to the intensive care, same-day surgery and the cardiopulmonary areas. Phase two also includes a 236-spot, three-story parking garage, an 18-unit employee housing building, 17,000 square feet of medical office space and a new loop road to provide access around the property. Final approvals for phases three and four will go forward after phase two moves forward. Phases three and four include improvements to the emergency room, a new helipad, more medical office space and a refurbished main entrance. Already-completed phase one of the expansion consists of the new baby delivery unit, and represented the first significant physical improvement to the hospital since it opened on its lower Castle Creek Road site in 1977. AVH is looking to four "buckets" of money to fund the expansion, Ressler said. The first is hospital cash on hand, which amounts to about $15 million, he said. That cash comes from surpluses above and beyond the hospital's 180-day operating reserve of about $28 million, and has been accumulated over the last few years as AVH's revenues have exceeded expenses. The second bucket would be revenue bonds. Hospital officials estimate that those bonds could account for as much as $25 million of the expansion's cost. Revenue bonds are financed through existing hospital revenues and do not require voter approval. That could change, however, if Amendment 61 passes, which requires voters to approve all forms of government debt, and requires that debt be amortized over a period of 10 years, instead of the current standard of 20. "Believe me, we are watching those," Ressler said of the package of tax limiting amendments of which 61 is a part of. The others are Amendment 60 and Proposition 101. AVH is currently running an analysis of its finances to see how much revenue bond financing it can afford, Ressler said. Ability to fund the revenue bonds is tied to the cash surpluses the hospital has been accumulating over its reserve amounts, he said.
That leaves about two-thirds of the expansion still needing funding. Ressler said he would like to see that share — about $80 million — divided equally between general obligation bonds supported by a property tax increase and philanthropic giving. "It would be great to see a relatively equal distribution between the two," he said. "It would be a good story to present." The Aspen Valley Medical Foundation is conducting a feasibility study this summer to determine the community's capacity for giving to the hospital expansion. Whatever isn't covered by philanthropy will have to be paid for by general obligation bonds tied to a new property tax, which will have to be approved by hospital district voters. The AVH Board of Directors has not set a date for when the election should occur, although Ressler didn't take this November off the table. However, AVH will need to get further along in the design process before it can figure out how much the final price tag for the expansion will be. Kris Marsh, director of the Aspen Valley Medical Foundation, said a national consulting firm has been hired to conduct interviews with the foundation's donor base to determine how much money the hospital can realistically expect to raise through philanthropy. The firm, Bentz Whaley Flessner, of Minneapolis and Arlington, Va., will explain the project, and the hospital's reasoning for pursuing it, Marsh said. "We want to study how people feel about it when they look at the facts," Marsh said. Once a financial capacity is determined, the foundation and AVH would kick off a capital campaign to raise the money, Marsh said. Community members who were around in 2003 through 2005 will recall the financial troubles related to the hospital's billing system. Ressler said he anticipates that memories of those issues will have to be dealt with as AVH looks to gain community support for the expansion. During those dark days at the hospital, the "revenue cycle" broke down because bills were not being collected in a timely manner, causing AVH to exhaust its cash reserves. Bills also were notorious for being complex and unintelligible to the recipients. The hospital has fixed that, bringing its average time to collect on a bill down to 50 days from 150 days, according to a 2008 audit. Ressler, who came to AVH in 2004, "right at the depth of the situation," also adjusted the hospital's cost structure, laying off some of the staff and eliminating other expenses wherever possible. The hospital's bond ratings have subsequently been upgraded to investment quality by Moody's bond rating service, Ressler said. Whether the hospital had gone through those issues or not, Ressler said, he knows he must make the case that the hospital will spend the community's money wisely on worthwhile investments in the facilities. Aspen Valley Hospital expansion approved by Curtis Wackerle, Aspen Daily News Staff Writer Tuesday, July 13, 2010 Aspen City Council approved the initial phase of Aspen Valley Hospital's size-tripling expansion on a 4-1 vote Monday night. Phase two includes about 63,000 square feet of a potential 136,000-square-foot total expansion of the hospital campus on Castle Creek Road. Most of the second phase includes expanded surgery and patient rooms, plus more physical and cardiac therapy space, a new gift shop, cafeteria and administrative offices. It also includes 12,000 square feet of medical office space. The hospital is looking to philanthropic giving and a property tax increase to fund the expansion. The tax increase must be approved by voters in a yet-to-be-determined election. Phase one — a new obstetrics ward — has already been completed. Also in the second phase, but not included in the 63,000-square-foot building expansion, are a three-story, 210-space parking garage and an 18-unit apartment building for hospital employees. To secure the 4-1 vote, with Councilman Torre dissenting, hospital officials had to vigorously defend their plans. AVH CEO David Ressler began his presentation with a "myths versus facts" slideshow. His first slide reiterated that AVH is not planning to expand the types of services it offers — just the quality. "We're not trying to be all things to all people," he said. The size of the expansion has also been criticized. Hospital board members said that the plans presented — and approved conceptually — have already been cut down as much as possible by the AVH Board of Directors, which sought to create a lean project. "We are of course aware that scale and mass and size are extremely important issues (to the community)," said hospital board president John Sarpa, who develops hotels in Aspen. Added Ressler: "This is not an Aspen approach to architecture, this is a health care approach to architecture." Torre, who was not on the council when the three-phase master plan was conceptually approved last spring, said he felt he hadn't been sufficiently informed about what would be coming in the later phases, and why the expansion is broken up into phases. "I feel like I'm coming a little late to the party here," he said. After three meetings on final approval of phase two, he remained unconvinced that the hospital's expansion was right for the future. He was also concerned that a phase two approval gave a tacit blessing to phases three and four. "I don't feel my community understands this fully," said Torre, who said he "remorsefully" voted no.
Sarpa said that phase two represents the hospital's most critical expansion needs. Phases three and four are important, but not as much as phase two, "otherwise they would be in phase two," Sarpa said. The hospital said phase two stands on its own, and that phases three and four don't need to be completed for phase two to function. Phase two does include parking designed for the project's entire buildout, however. To this end, Mayor Mick Ireland successfully amended the approval so that the third floor of the parking garage will be blocked off until later phases are complete, so as not to encourage an overparking of phase two. Phases three and four include emergency room and radiology improvements and expansions, a refurbished front entrance and more expansions to the surgery unit. It also includes an additional 15,000 square feet of medical office space. But Ressler said the conceptual plans for phases three and four are purposely designed to be flexible. It is unclear how long the hospital will wait before seeking final approval for the next phases. The hospital's first task is to determine the community's capacity for giving to the expansion, and then to begin raising the money. This will instruct the hospital on how much money it needs to ask to borrow from taxpayers in the form of general obligation bonds. Ressler said he would like to see the final phases come in succession right after phase two is finished, but Sarpa said it would be more likely for a period of time to pass between phases to evaluate funding and functionality. Public comment was similar to the last three meetings, with most opposition coming from homeowners living near the hospital expansion, although some from the general public questioned the need for the on-site medical offices and the size. Most said they supported some form of expansion, but perhaps with a cutback in the parking garage size or the medical offices. Doctors and other hospital staff spoke of how far behind the times the current hospital has fallen in its physical features and how having medical offices on site could be potentially life-saving. Currently, when a doctor must come to the hospital for an emergency, that doctor must fight traffic on Main Street in Aspen. Voting in support of the project, council members expressed some sympathy for the neighbors, but said that the benefits of the hospital expansion outweighed the drawbacks they would face. "Yes, there will be some places where from Castle Creek you will not be able to see Highlands," Councilman Derek Johnson said. "But as a community we will be better off." Tuesday, July 13, 2010 Aspen OKs hospital expansion Aaron Hedge The Aspen Times Aspen, Colorado ASPEN — The City Council on Monday gave Aspen Valley Hospital officials the green light on the second phase of a massive four-phase hospital expansion, on the condition that it complies with four amendments to the proposal. The council's conditions are a deed restriction that would take away the possibility for the hospital to condominiumize any new office space; limit parking in the planned garage by 70 spaces until the full project is complete; provide four extra units of affordable housing for AVH employees; and provide traffic reports every two years with remedies in case traffic is too heavy. Phase 2 of the project will add 12,000 square feet of new medical office space to be shared by three or four private practices under lease agreements; 22 units of affordable housing, with four of those units to be constructed off the hospital campus; and a new service road that will encompass the 18-acre property. The multi-phase project would roughly triple the size of the facility. Councilman Torre, who expressed concern that the approval would set a precedent for future councils for the following two phases, regardless of their viability, cast the sole dissenting vote in the 4-1 approval. "I don't know what's in Phase 3, and I don't know why it's not in Phase 2," he said. AVH CEO Dave Ressler and John Sarpa, chairman of the hospital's board of directors, assured Torre that Phase 2 only includes the bare essentials of the project, and if Phase 3 does not get council approval in the future, it would not matter. "Nobody's gonna be looking at plastic and plywood and a hole in the ground and say, 'Oops,'" Ressler said. Councilman Derek Johnson warned hospital officials that they must continue to work with concerned community members in the building process if they want to continue subsequent phases of the project in the future. "If you want Phase 3," he said, "everything's gonna have to go smooth with Phase 2." Residents in the area have expressed concern over the last several months that the expansion would increase what they say is already a large community footprint by the hospital. They also said the project would create a redundant hospital system in the Roaring Fork Valley, citing a similar expansion at Valley View Hospital in Glenwood Springs. But Ressler and Sarpa assured the council that the building is essential to AVH's ability to serve the community, stressing that the project is being designed on a needs-only basis — an idea critics are still skeptical about. "This is not an Aspen approach to architecture," Ressler said. "This is a hospital approach to architecture." Funding for the project will come from four different sources: savings from hospital revenues; tax-exempt revenue bonds; a property tax hike which will require voter approval; and donations from the hospital foundation. The property tax increase will likely go on the ballot in November 2010, May 2011 or November 2011. The portion of the burden those different sources will bear has yet to be determined, Ressler said, because of the preliminary nature of the proposal — the $120 million price tag — is just a projection right now. The hospital is fostering a relationship with a potential contractor for the expansion, Haselden Construction, which is finalizing a bid. Aspen hospital expansion wins conceptual go-ahead City Council conceptually approves another 214,395 square feet at medical campus Carolyn Sackariason The Aspen Times Aspen, Colorado ASPEN — With minimal opposition from the public, Aspen Valley Hospital officials on Monday got the go-ahead to move forward with their plans to triple the facility's size. The Aspen City Council voted unanimously to conceptually approve AVH's plans to add 214,395 square feet at the medical campus over 20 years. The proposed two-story development, which must come back to the council for a final review and approval, includes a new underground parking garage and surface lot that would accommodate 338 spaces. Also included in the development plans are an expansion of the emergency and imaging departments, a surgical suite, central plant upgrades, as well as new medical office space, patient and family services, and a rooftop heli-pad. The expansion of the existing 75,700-square-foot facility on Castle Creek Road would occur in four phases, with a complete build-out expected in 2016. Final reviews, which will come in the form of denials or approvals, will occur with each individual phase and will span over several years with different councils. The more significant detail design issues are scheduled for phase two; the other phases are less complex in terms of public infrastructure, according to city planners. A new bus stop and trail improvements are anticipated in the development's second phase. Two people spoke against the proposal, saying its size is inappropriate for the upper valley's population and would create a traffic burden at the roundabout and the entrance to Aspen. Mayor Mick Ireland said issues of traffic and parking haven't been resolved, but will be in future reviews. He commended AVH representatives for providing as much information as they did at a conceptual level. Based on traffic analysis, the expansion is expected to generate an additional 866 vehicle trips a day. That was the estimate offered to the council by Denver-based LSC Transportation Consultants, Inc., the firm hired by the hospital. Based on recent traffic counts and other analyses, the current level is 752 trips into the AVH campus and 752 going out on a daily basis. Council members in previous public hearings had asked hospital officials to incorporate into the plan a detox facility, senior citizen accommodations and childcare. But after further analysis, AVH officials said those amenities would be better served in other capacities off-site — a notion that the council appeared to support. There has been minimal public comment on the proposal during numerous hearings over the past few months. csack@aspentimes.com Aspen Valley Hospital has big plans by Brent Gardner-Smith, Aspen Daily News Staff Writer Tuesday, May 27, 2008 Aspen Valley Hospital has big plans to renovate and expand its current facility, which dates back to 1977. The facility on lower Castle Creek Road could grow from its current 75,700 square feet to a total of 291,000 square feet — nearly four times its size — including a three-story parking garage that alone adds 76,000 square feet to the total package. (This figure differs from the previously reported figure of 209,000 square feet, which does not include basement space or the parking garage.) The new construction wraps around nearly all sides of the hospital's current building and will result in what the hospital hopes will resemble a tasteful "village of structures." In February, the hospital submitted a master plan proposal to the city of Aspen, which annexed the 23-acre hospital property in 2003. The project is expected to cost $100 million, which will be financed by a combination of savings, debt and public tax money (see related story on hospital finance). The plan has four phases and all work takes place on six acres on the south end of a distinct 19-acre parcel of land, which also includes the hospital CEO's residence and the building that houses Pitkin County Senior Services and Whitcomb Terrace, the hospital's assisted living facility. The first phase is nearly complete and relied on prior approvals from Pitkin County. It includes a new obstetrics department with 5,700 square feet of new space and 4,252 square feet of renovated space. The second phase includes the 234-space parking garage, which would be placed between the road and the existing hospital parking lot. A new "loop" road around the hospital is also proposed for the second phase. The road would begin at the current senior center driveway and then wind around the back of the hospital, providing access to two loading docks and an ambulance garage. Also as part of the second phase, the number of hospital rooms will grow from 16 to 27 and a variety of departments would gain new space, including intensive care, same-day surgery and the cardiopulmonary area, as well as the reception area, cafeteria and gift shop. The third phase includes a new rooftop helipad for emergency medical transport, an expansion of the emergency room and 18,000 square feet of new leased medical office space. The final phase includes a new entrance "atrium" and patient drop-off area as well as other improvements. The hospital expects to soon review several key issues with the city, including the size and visual impact of the parking garage along Castle Creek Road, which would reconfigure the parking at the hospital from today's total of 185 spaces to 339. "The Hospital is well aware of the community's aversion to overly large and imposing structures that block views of the mountains or fail to blend into the site," states the hospital's land-use application, which was prepared by former Pitkin County commissioner and planner Leslie Lamont, who today runs Lamont Planning Services, LLC. Today, most visitors to the hospital probably don't even notice the hillside between Castle Creek Road and the northeastern side of the hospital. That would change under the plan, both because of the size of the parking garage but also because "a row of large aspen and spruce trees next to the east side of the building must be eliminated for the construction of Phase II and the garage," the plan states. The hospital is also eager for an upfront discussion with the city about employee housing. First, it wants credit for the employee housing it has developed or purchased in the past. The hospital voluntarily built 21 rental units at its Mountain Oaks complex near the hospital and purchased the former Beaumont Lodge in Aspen that has 25 rental units. Second, it wants a special analysis of employee generation. Typically, the city assigns a number of new employees based on an increase in the size of any given facility. The hospital wants the city to consider the seasonal nature of its business, as it has more employees on site during the busy winter and summer tourist seasons. It also wants consideration for what it is calling "decompression." It argues that just because its employees will no longer be "compressed" into tight working spaces doesn't mean it will also be adding new employees. City planners in the past have rejected such arguments, reasoning that if the hospital, in this case, ever relocated, it could be replaced by another large employer who would not have to provide new employee housing for simply purchasing an existing facility. Another reason the discussion may be contentious is that the new medical office space could alone potentially require mitigation for 46 new employees. "It is important for the Hospital to understand, at this conceptual level, that the City will accept housing credits and for there to be agreement regarding the methodology for calculating the number of employees generated and what mitigation level will be required of this essential community facility," the hospital's land-use application states. Much has changed since the hospital was moved to Castle Creek Road in 1977 from its old location near the Hunter Creek apartments. While annual hospital admissions have actually dropped from 1,716 in 1977 to 1,630 in 2007, outpatient visits have increased to 34,291 from 11,665. The emergency room has gotten busier too, with visits climbing to 9,193 last year from 4,857 in 1977. And technology has changed use patterns at the hospital. Last year, the hospital performed 9,222 computed tomography, or CT, scans which provide doctors with a three-dimensional X-ray of patients. That number is up from zero CT scans in 1977. New AVH birth center taking shape by Brent Gardner-Smith, Aspen Daily News Staff Writer Monday, April 14, 2008 At least one entrance to Aspen has been improved significantly. Aspen Valley Hospital is putting the finishing touches on a new maternity ward, which includes five new labor and delivery rooms for inbound Aspenites. "It's clean. It's bright. It's very patient-friendly and family-friendly," said Cheryl Heffernan, the obstetrics nurse manager at AVH, about the new "Aspen Birth Center," which expects to welcome between 300 and 340 babies a year. In addition to the new labor and delivery rooms, there are five post-partum, or post-delivery, rooms, a new nursery, as well as a new high-tech nursing station for monitoring labor in progress. "It's just great to have them all in one place," Heffernan said. The new birth center represents the first large expansion outside of the hospital footprint since it was constructed in 1977. About 5,000 square feet of new space has been added on to the west side of the hospital, and another 2,700 square feet inside the hospital will also be renovated in a second phase of the maternity ward. The first phase of the project cost $6.5 million to build. The new delivery rooms have 9-foot ceilings, large windows and what appear to be two-toned wood floors that are actually easy-to-clean vinyl floors. The rooms also have whirlpool bathtubs, a bed for mom that can easily be wheeled into the operating room if necessary, bright overhead lights that allow a doctor to see how things are coming along, and a specially designed armoire that includes a miniature Murphy bed where newly emerged infants can be weighed, kept warm and duly monitored. The post-partum rooms have a similar warm and cozy feel, and include a fold-out couch for dad, a queen-sized bed for mom and the baby, and a flat-screened television.
One of the rooms, called the "corner suite," has windows on two walls and expansive views of Aspen from Shadow Mountain all the way around to Buttermilk Mountain. "It really makes you feel like you are in Aspen," said Heffernan, who said she expects it to be a very popular location for the first couple of days of family bonding. Russel Sedmak, the architect, with Herry International Inc. of Denver, who designed the new birth center, said that while the new rooms and facilities look lush, they are not extravagant. "This is state of the art, but not above the level of other modern community hospitals," Sedmak said. Today at the hospital, there are two cramped delivery rooms that don't have windows, a nursery that doesn't have enough room for the rush of babies that occasionally overwhelm the hospital, and post-delivery rooms that are mixed among regular patient rooms at the hospital. The new post-delivery rooms are within the maternity ward, but are also set aside from the more hectic delivery zone. "It is very quiet and restful on this side and those were very deliberate decisions," said Heffernan. The new maternity ward will be open for business by mid-May, and hospital officials are eager to show off the new area and plan to hold a community open house. A master plan to add 144,000 square feet to the current 70,000 square feet has been submitted to the city of Aspen for review. The 5,000-square-foot expansion for the maternity ward was from a prior land-use approval, but represents the first step in what hospital officials say will ultimately be a transformation of the hospital into a modern facility and grow the hospital from today's 25 beds to 39 or 40 beds. Hospital staff members have been touring the new maternity ward and Heffernan said there has been a consistent reaction. "A frequent comment has been 'I can't believe it is the same hospital'," she said. Aspen hospital's new 'birth center' first phase of master plan John Colson The Aspen Times Aspen, CO Colorado April 13, 2008 ASPEN — Expecting mothers from Aspen to El Jebel now have a much more modern place to have their babies than in the past, thanks to the partial completion of a new maternity ward at Aspen Valley Hospital. The new "Aspen Birth Center" is roughly two and a half times as large as the old maternity ward, or it will be once renovation of the old maternity ward is finished. In the meantime, local moms-to-be can have their babies in a brand new, $6.5 facility that is to begin accepting patients some time in the next couple of weeks. Hospital officials conducted a media tour of the new wing last week, showing off the bigger labor and delivery rooms, nicer furnishings and new features — which include Jacuzzi bathtubs with colored lights to help mom chill out (or warm up) before the big event, and specially built armoire cabinets that contain a baby bunk with a warming lamp, a scale and infant monitoring equipment. Each delivery room also has a pair of high-intensity lamps built into the ceiling to shine directly onto the lower part of the bed, to help doctors and nurses see better during the delivery process. The new wing is done up in what CEO Dave Ressler called a "color palette" that reflects seasonal changes in the mountains surrounding the hospital, and is both durable enough and softly unobtrusive enough to last a long time, even if fashions among hospital color schemes change. "It's clean, it's bright, it's very patient friendly, very family friendly," declared an obviously proud Cheryl Heffernan, manager of the birthing department.
"Our goal is to be here ... versus going to the operating room" for deliveries, Heffernan explained, although Cesarean section births will still take place in the operating room. The layout boasts five labor/delivery/recovery rooms [known as LDR rooms in medical parlance] and four post-partum rooms located on the other side of a set of swinging doors to keep the noise levels down in the post-partum wing. There also is a post-partum room, said Heffernan, that will be convertible to an LDR when needed. A key part of the expansion is the new nurses station, perhaps twice as big as the old station and with a new fetal monitoring system that will allow the nurses to check on babies from the station. According to hospital spokeswoman Ginny Dyche, AVH handles between 300 and 340 births per year on the average — three times the number of babies born there in 1977. Over the past decade, Dyche said, the numbers have hit a plateau with only "a slight increase" in the annual birth rate. but they numbers, hospital officials have said, still outstripped the capacity of the old maternity ward. And, Ressler added, AVH is handling "a fair number of deliveries from the midvalley" every year, a number that the hospital expects to increase with the valley's expected overall population growth. The expanded birthing facilities are phase one of a larger expansion and renovation project, estimated to cost $100 million, that is to take place in the coming years. Phase two, according to officials, will be in the Patient Care Unit, the wing where the regular patient rooms are located. Officials clearly were proud of the Aspen Birth Center expansion, noting that in the old maternity ward, the nurses once had to take care of nine babies at once in a room designed for two. In the new wing, the nursery is equipped for "special care" babies, and designed for four beds at once. The new wing also is equipped to re-admit babies who experience medical problems after they leave, which Heffernan said is far better than putting them in with the general patient population in the Patient Care Unit. The old maternity ward, when it is finished, will contain a medicines room, a kitchen, an "anapartum room" for examining moms prior to the birth date, a waiting room, and an educational/lactation room for helping new moms learn some of the finer points of motherhood. The renovation of the old maternity ward should take about five months, according to John Scheid, AVH facilities manager, and Russell Sedmak, who is heading up the project for contractor Heery International, Inc. of Denver. Aspen hospital expansion plans move ahead City staff review under way, hearings likely next summer John Colson The Aspen Times Aspen, CO Colorado March 25, 2008 ASPEN — The plans to expand and renovate Aspen Valley Hospital — at an estimated cost of $100 million or more — are now in the hands of City Hall staff members. The hospital recently turned in its conceptual proposal as a Planned Unit Development document, which is intended to provide greater flexibility during the review process. David Ressler, the hospital's CEO, said the city has indicated that the staff review should be completed by June, after which the city's Planning and Zoning Commission is expected to schedule public hearings on the proposal. Ressler also said that, despite the financial storm clouds darkening the nation's skies these days, he is not worried about finding the money to pay for the hospital's expansion plans. The hospital district, which encompasses essentially the same area as Pitkin County with the exception of the Crystal and Fryingpan river valleys, announced plans late last year to triple the size of the hospital and add a three-level underground parking garage at the facility's campus on Castle Creek Road. The hospital is projected to grow from its current 71,000 square feet to about 214,000 square feet. The expansion will take place in four phases over several years, the first of which is nearing completion now. The hospital is almost finished with a $6 million expansion of the obstetrics and birthing wing, and soon will begin renovation of the former obstetrics ward. According to Ressler and hospital spokeswoman Ginny Dyche, the hospital has begun working on some of the details and the design of the second phase of the multiyear project. The second phase, Ressler explained, will focus on the patient care unit; on construction of the parking garage, which is to be located between the main hospital building and Castle Creek Road; and a portion of the planned medical office space for local doctors; among other additions. Phase three, he said, will bring expansion of the emergency room, radiology and surgery departments. Phase four, he said, calls for renovation of the existing hospital building. The existing hospital building will be updated last to allow normal operations to continue in the new sections (built in the earlier phases) while the existing facility is rebuilt. The first phase of the project, expansion and renovation of the obstetrics department, was paid for with money left over from an earlier bond issue approved by the district's voters, and some of the hospital's cash reserves. But for the coming phases, Ressler said, the hospital will turn to other financing options. Those likely will include some combination of using cash on hand; asking voters to approve increased debt; and seeking philanthropic assistance from wealthy supporters. Ressler said the hospital's finances continue to improve thanks largely to a revamped billing department. He said the hospital's reserve account now stands at around $30 million, or enough to continue operations for approximately 220 days without taking in any cash. National standards call for hospitals to have anywhere from 120 to 180 days of operating reserve on hand. In addition, Ressler said, the hospital's bond rating has improved to the point where it is now given a BAA3 rating by Moody's Investors Services, a nationally respected source of credit ratings and risk analysis. That rating, according to Moody's Investors Services, means that investments in AVH would be "subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics." It is the lowest-quality tier of the company's long-term risk assessments, but above the "speculative" or "junk" rating levels. Ressler said he is not worried that the current turmoil in the national financial markets, triggered by the collapse of the subprime mortgage industry, might pose a problem for the sale of bonds to finance the hospital's project. "Certainly, it's something we need to be thinking about," he said. But he said he's had no indication from Terry Collins, the hospital's chief financial officer, that trouble might be brewing. Given the hospital's improving financial reports, its growing cash reserves and its record of paying its bonded indebtedness obligations, he hopes that "Moody's will continue to look at Aspen Valley Hospital favorably." Although the exact mix of financing tools for the project won't be known for some time, Ressler said, "It's some sort of public-backed financing." And, he said, "It's probably a couple of years before we begin construction" on the remaining phases. |
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 "I really appreciate the 'tender loving care' the entire staff of nurses, doctors, and others provided while I was at Aspen Valley Hospital." —AVH Patient |
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