LEXINGTON, Mo. – City leaders in this Lafayette County community are searching for a different way to get a new regional hospital built after a proposed bond issue to finance one failed in the Nov. 6 election.
The ballot question was about 100 votes shy of the 57 percent majority approval needed to authorize the sale of $4 million in general obligation bonds. The city would’ve raised property taxes – for a period not to exceed 20 years – to pay off the bonds.
As part of the proposed $40 million hospital project, the city would cover the costs of extending water service to a roughly 50-acre site east of town at the intersection of U.S. Highway 24 and state routes 13 and 224.
Proponents said they envision the 77,000-square-foot hospital as the anchor of a medical campus on the site, which would include a physician office building. The site is also primed for residential and commercial development, according to Lexington Mayor Jerry Brown.
“How to get water out there now – that is our issue,” Brown said. “We are looking hard at how we can do it, and we don’t have an answer today.”
Options under consideration, he said, include another ballot issue in the spring or a privately financed bond plan that would not need voter approval. In the latter scenario, according to projections prepared for the city, revenue from the hospital could pay off the bonds.
Located about 45 miles east of Kansas City, Mo., Lexington is a county seat of approximately 4,700 residents. The community’s hospital initiative is similar to an effort undertaken two years ago in Iola, Kan., where voters approved a sales tax to construct a new critical access hospital there.
The current city-owned hospital in Lexington, Lafayette Regional Medical Center, is six decades old, has no room for further expansion at its site on the north edge of town, and is about three quarters the size of the proposed new hospital.
“We have stellar health care out there,” said Toniann Richard, executive director of the Health Care Collaborative of Rural Missouri, which has its offices in Lexington. “Unfortunately, the building does not reflect that. It’s a 60-year-old building.”
HCA Midwest Health System leases the facility from the city, and chief executive Bret Kolman said the company has made more than $10 million in upgrades since 2003. That’s when the Tennessee-based company completed its acquisition of 12 hospitals in an $885 million transaction with Health Midwest, a nonprofit health system.
(Proceeds from the sale established the Health Forward Foundation.)
Kolman said the upgrades include new flooring, new windows, and electrical upgrades.
In addition to the city funding, HCA would contribute $4 million in start-up funds for a new hospital. Remaining funds would come through a federal loan through the U.S. Department of Agriculture and other private financing, Mayor Brown said.
Kolman said the new facility would allow physicians to practice more effectively. It would have 16 instead of nine outpatient exam rooms. The new facility would have improved emergency room services, he said, by doubling to 10 the number of ER exam rooms.
Kolman also said the new hospital site would also allow for an expansion into obstetrics, if the hospital decides to get back into the business of delivering babies.
Proponents said no organized opposition emerged to the ballot issue.
According to state campaign finance records, the Healthy Community, Health Economy campaign committee spent more than $18,000 promoting the bond issue. Lafayette Regional Health Center provided most of the funding.
Kolman said that, with all the money HCA has put into the hospital, voters apparently did not see the need for a new facility.
“That is probably the No. 1 reason this did not pass,” he said. “People said, ‘You have a good hospital.’ We took the need away from them by fixing stuff.”
But Brown said voters also likely were leery of paying for more public debt.
Just days before the election, he said, tax bills came out reflecting the increase the voters approved in April for school construction.
In addition, he said, city residents are now paying an extra $10 a month on their water bills to help cover the city’s $3 million purchase of the local water company.
In retrospect, Brown said, proponents might have made the November vote too much about the hospital and not enough about the economic development prospects of extending water to the tract.
Using the latter approach, he said, “I think we can sell that.”