Settling on what kind of management model will oversee construction of a new Allen County Hospital will make a difference as to how soon the preconstruction phase can begin, including financing and the letting of bids, hospital trustees learned Tuesday night.
Trustees voted to go with a construction manager at-risk model that, among other things, allows for substantial trustee input when bids are let. The method also allows for pricing to begin when drawings are 70-80 percent completed.
The alternative was to go with a design-bid-build model that insists a design be 100 percent complete before bids are let.
Another downside to the latter form, said adviser Chuck Wells, is the model requires multiple contractors, which ultimately means there is no single party responsible for overseeing the entire project. Thus the county, not the construction manager, bears the risk should the project go over budget or miss completion dates.
Wells’ advice ran counter to that of Mark Thompson, the Kansas City-based attorney for Allen County, who recommended trustees “look seriously” at the design-bid-build model. Thompson works for the law firm Seigfreid, Bingham, Levy, Selzer & Gee, P.C.
Trustees felt comfortable with the advice of Wells, which was supported by Steve Lewallen and David Wright of Health Facilities Group. Lewallen is an architect with the Wichita-based company that helped write this summer’s Master Plan for the hospital. Wright is vice president of operations. Together they have worked on the construction of “30-40 hospitals — I’ve lost count,” Wright said.
The sooner financing can be secured for the project, the better, Wells said. When it comes to the bond market, “there are more bad things out in the future than good.”
Trustee Tom Miller, Iola, agreed, saying “going with the at-risk model essentially buys us 90 days. A 1 percent rise in interest rates could make a big difference.”
SECURING the site on East Street for the new hospital is not flowing as smoothly as hoped, trustees learned. County Counselor Alan Weber issued three requests for proposals to appraisers to set a price on the main site, a little under seven acres, and on one to the north, an additional 12 acres.
Only Tim Keller of Keller & Associates, Lawrence, replied, asking for a $15,000 fee and eight weeks to do the job.
“That’s high and lengthy,” Weber said of Keller’s proposal.
Weber said the county is using out-of-town appraisers for the job to ensure an impartial bid.
Trustee Jay Kretzmeier said he has secured the names of 23 appraisers from the east side of the state who will be contacted by he and Weber.
NEGOTIATIONS with representatives of Hospital Corporation of America to manage the hospital can begin “in mid-December,” said Joyce Heismeyer, chief executive officer of the hospital and an HCA employee.
