Kaweah Delta Approves $100M Expansion

With plans for a new acute-care hospital in downtown Visalia already underway, the Kaweah Delta Health Care District has approved $100 million in additional expansion and upgrades. Included in the long list of construction projects are a new urgent-care facility in northwest Visalia and a doubling of ER beds downtown.

“The short of it is we will be issuing revenue bonds in December for $100 million,” said Lindsay Mann, CEO for KDHCD. “The board has already authorized the issue for each of these projects to be funded.”

The bond issue will also cover the cost of completing infill of the second, fifth and sixth floors of the hospital’s Acequia Wing, the construction of an endoscopy center on the West Campus at Cypress Avenue and Akers Street, refurbishment of the Exeter Health Clinic, a $22-million upgrade to the District’s IT system and construction of temporary parking after the demolition of two vacant buildings on the Downtown Campus.

Shortage In the ER

The expansion of Kaweah Delta Medical Center’s emergency department “addresses severe shortage of treatment areas” in the ER.

“The project will include new construction and the project will entail 20,600 square feet,” said Mann. “We’ll add 34 new beds to the 36 we now have. When we’re done we’ll be a 70-bed ER.”

Ten of those new beds will fill an already existing portion of the hospital, while the remaining 24 will be housed in a 12,000-square-foot expansion of the existing ER into the parking lot to the east.

The project carries a price tag of $33 million, and aims to ease congestion in a department that has seen an additional 18,000 visits a year since 2012.

“We now see 93,000 emergency department visits a year,” Mann said. “We’re one of the busiest.”

A design contract will likely be awarded in January, and work will commence in summer of 2017, following state approval.

Hospital At Maximum Capacity

Prior to the addition of a helipad, the most recent add-on at KDMC was the opening of the Acequia Wing in 2009. The medical center has continued to grow in the intervening six years, and is again facing a shortage of space.

“We have been operating Kaweah Delta at full capacity for a full year,” Mann said.

Fortunately, room to grow remains in the Acequia Wing, where “shell space” will become home to 32 additional hospital beds. Twenty-four of the beds will occupy a medical/surgical wing on the fifth floor, while the sixth floor will house an expanded neonatal intensive-care unit. The current NICU has 15 beds, and will gain eight additional beds when it moves. The space will also be safer for some of the most critical patients.

“We have to take the NICU up to that unit, not only to expand it, but so it will be a space that meets earthquake standards,” Mann said.

The Acequia Wing’s second floor will house two C-section operating rooms at a cost of $6.5 million. The fifth- and sixth-floor additions carry a project cost estimate of $21.8 million.

New Facilities

Kaweah Delta will be building at least one new treatment facility, possibly two, in northwest Visalia.

Already a certainty is the Northwest Area Urgent Care Center, which will be located on a 1-acre plot on Demaree Street. Probably.

“We haven’t concluded the final property acquisition,” Mann said. The project is planned as part of an expanded partnership with the Quail Park retirement community. “It will be a full urgent-care center.”

Staffed by MDs, the center will be similar to KDHCD’s urgent care center on Court Street on the former Visalia Community Hospital campus, treating conditions such as broken bones and lacerations.

The center will be housed in a 5,200-square-foot facility, including X-ray and lab services, and 14 exam rooms.

The District is also planning an outpatient endoscopy center on its West Campus. What hasn’t been decided is whether to build a new clinic or to expand the Sequoia Surgery Center.

“That’s under study at this point,” Mann said. Either way, cost of the clinic is pegged at $7.7 million. A 2-acre plot remains open on the West Campus.

Upgrades and Demolition

KDHCD will be pouring money into a pair of upgrades, one much bigger than the other. The smaller of the projects is the $3.8 million refurbishment of the Exeter Health Clinic. The larger is a $22 million revamping of the entire district’s information systems.

In Exeter, the main clinic building on San Juan Avenue is getting a makeover, including a new 7,000-square-foot parking area.

“We’ll be adding new facilities and refurbishing the facilities there,” Mann said. “It’s been operating at beyond capacity for years.”

Additions there include a 5,700-square-foot women’s health clinic and lab, and a 5,000-square-foot administration building.

One of the biggest projects is a major reworking of the entire KDHCD IT system.

“It’s very significant,” said Mann. “We’re actually replacing our electronic medical records.”

While $22 million seems hefty, Mann says it’s actually a bargain when considering the size of the system in question.

“It’s actually a very cost-effective solution,” he said. “This covers our emergency department, our four hospitals and our outpatient settings, including physician offices.”

Finally, for a mere $900,000, the District will tear down a pair of unused office buildings on its main campus and convert the area to temporary parking. The area in question, west of the Acequia Wing, will eventually become the Medical Center’s new acute-care wing.

New Hospital By 2025

The current main wing of the hospital, the Mineral King Wing, must be replaced by 2030 in order to comply with state seismic requirements.

A 10-year plan to complete the project is already in works, and the new wing should be open for business by 2025, well ahead of the state deadline.

To fund construction of that project, the District intends to ask voters to approve general obligation bonds, a move that will require 67% approval. Mann believes voters have a trust in the District’s financial acumen based on its past performance.

“We have a theme of doing these projects on-time, on-budget,” he said.

The bond-rating agency Moody’s has assigned KDHCD an A3 rating.

The $100 million bond issue, approved in October, is based on the District’s future earnings, and is well within its budget, Mann said.

“We have financial strength to be able to undertake these projects,” he said. “We just, on Monday, had our external audit by Moss Adams, confirming that we have three positive qualities that give the best perspective about our financial strength, which include a strong operating margin, solid cash reserves and a strong debt-to-equity ratio.”

 

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