Rangely set to open new hospital in 2013

This artist’s rendering shows the completed main entry to the new Rangely District Hospital.

Construction will begin Monday on a new Rangely District Hospital in Rio Blanco County.

Like the current hospital at 511 S. White Ave., the new hospital going in next door at 225 Eagle Crest Drive will have one level and 18 beds. Those beds are paired in nine rooms in the current hospital but will be spaced out in 14 rooms in the new facility.

Private rooms are one of the few new offerings in the hospital, which will continue to operate a retail pharmacy, Rangely’s sole family-practice office and Eagle Crest Assisted Living Community. Hospital Chief Executive Officer Nick Goshe said it was the building’s condition, not a desire to expand services, that spurred interest in a new facility.

“The state was telling us on several occasions if we did anything to the building, we’d have to abate asbestos, and if we did anything electrical, we’d have to fix the entire electrical system. It just came down to this is the right time to do this,” Goshe said.

The timing seemed right when Goshe and others began planning a new hospital in February 2009 to ask voters for a property tax increase to pay for it.

By the time the question went to a vote in May 2010, many of the town’s short-term residents working in the oil and gas field were gone and hotels and trailer parks had emptied.

“Most people thought we were crazy to go for a vote when we did,” Goshe said.

But the measure passed by a narrow margin, and the hospital began searching for an agency to back bonds that would be paid for with the additional tax revenue. Goshe said the hospital originally planned to sell bonds with backing from the U.S. Department of Housing and Urban Development, but it ran into difficulties.

The department asked the hospital to pay $100,000 to remove a diesel contaminant from soil on the new hospital site, Goshe said, despite that soil being under the future site of a parking lot that will contain that contaminant. A HUD attorney also told the hospital to buy outright the Bureau of Land Management land where the hospital will be constructed, something Goshe said would cost too much too soon. The hospital will instead pay $10 a year to the bureau to use the land under the Recreation and Public Purposes Act.

The hospital decided to give up on the nonrefundable $116,000 application fee with HUD after being told more than 50 percent of their patient cases, which are mostly long-term now, had to be for short-term cases in order to get the department’s backing.

The hospital went to Moody’s and received backing and a BAA rating. The bonds have all been sold at a 5.1 percent interest rate and will be paid within 15 years, 10 years sooner than HUD would have allowed.

“It ended up working out for the best because we sold them right when the stock market was taking a dive and interest rates were low, and people wanted safer investments,” Goshe said.

He estimated the construction project will cost $22.5 million and estimated it will cost $53.5 million to repay the bonds, nearly $40 million less than the maximum repayment amount approved by voters. The district already paid $3.6 million for early components of the project.

The old hospital will be torn down soon after the new hospital opens in early 2013. Goshe said hospital staff will wait until the entire construction project is complete to start moving into the new building.

The hospital has room to expand in case the population, about 2,200 now, begins to boom again. Goshe said the hospital is integral to the town regardless of its population.

“If we weren’t here, it would be devastating to the community. In good weather, another hospital is an hour away,” he said.


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