Hospital Sets $3 Million, 3-Year Fundraising Goal
County Hears Updated Plans for New Facility
By Karen Gould

A campaign kick-off to raise $3 million for the new Mackinac Straits Hospital in St. Ignace is just weeks away, says Rod Nelson, chief executive officer at the hospital. Building costs and equipment are estimated at $26 million for the 15-bed hospital. Planners may reduce expenses by using a combination of steel and wood construction, rather than an allsteel framed structure, as previously planned.

The Mackinac County Board of Commissioners received the update on hospital plans during their Thursday, April 26, meeting. They also discussed incompatibility issues with Sue Dionne, the county deputy treasurer and Moran Township treasurer, and signed a contract for inmate health care that could save the county approximately $13,000 annually.

The hospital fundraising event will be June 8 at Grand Hotel on Mackinac Island, said Mr. Nelson. A foundation board of business people has been established and is co-chaired by Mackinac Island Mayor Margaret Doud and retired State Senator Walter North of St. Ignace. From that board, R. Dan Musser III, president of the hotel, and Jim North, president of First National Bank in St. Ignace, are co-chairing the campaign.

An aggressive plan to raise $3 million over three years will include seeking federal appropriations with the help of Congressman Bart Stupak, said Mr. Nelson, and through foundation grants and local support.

"We are optimistic we can raise that kind of money," he told commissioners.

The 110,000-square-foot hospital building is expected to cost approximately $18 million, and equipment will raise the tab to $26 million, although that does not include interest expense for construction loans, said Mr. Nelson. The U.S. Department of Agriculture has pre-approved loans amounting to $24.6 million at an interest rate of approximately 5%. Interest expense is estimated at $2 million, said Mr. Nelson.

The medical complex will include a hospital, long term care, tribal health clinic, and physician offices and will sit on 16 acres of land donated by the Sault Ste. Marie Tribe of Chippewa Indians just south of the Mackinac County Airport on North State Street in St. Ignace.

Incorporating steel and wood construction would reduce costs further by $25 to $35 a square foot from the original plans. An all-steel structure, currently reflected in the $26 million price, would be approximately $200 a square foot, said Mr. Nelson.

"My goodness, you can't make money with this hospital, how do you build and pay for a new hospital?" is a common question Mr. Nelson hears from area residents. Mackinac Straits Hospital lost $487,963 in 11 months through February.

Addressing that question, Mr. Nelson said that because it is a critical access hospital, Medicare pays the facility 110 percent of costs. Also, the hospital now is missing out on several revenue sources, including surgery, which are not offered at the current facility. A surgery unit is planned for the new building. Tribal services will be available at the new facility, which will benefit tribal members who now must travel to Sault Ste. Marie.

"If we don't modernize and give the hospital the ability to expand services, generate more revenue from those services, and upgrade in technology, we're going to be just like Ontonagon," said Mr. Nelson. Ontonagon Memorial Hospital has run into financial difficulty and now is affiliated with a Wisconsin hospital.

"Whether or not that hospital stays open long term, I think, is kind of debatable," he said.

The state's budget crisis may produce a negative impact on hospital finances. Last week, Governor Jennifer M. Granholm announced a 6% cut in Medicaid provider fees. If the cut remains in the final budget, due June 1, Mackinac Straits Hospital could lose approximately $350,000 annually in Medicaid fees from the state.

The hospital is taking steps to prepare for the loss of revenue, said Mr. Nelson, including reducing expenses by $500,000. Contracting laundry services, not replacing retiring Dr. Jesus Neri, and additional plans to cut costs will be taken in the next several months, he said.

Revamping the current hospital would cost more than building a new facility, said hospital board president Ron Mitchell at the meeting.

The county owns the property the current hospital sits on, and the hospital owns the building. A $1.3 million bond is left on the old building. County commissioners and hospital officials said they will have to discuss the site once the hospital receives final approval from the U.S. Department of Agriculture for the new facility loans. A decision on the loans could come as early as the end of May or as late as August, said Mr. Nelson.

"The goal is to have the infrastructure in the ground this summer and fall," said Mr. Nelson.

In another matter, Mackinac County Prosecutor Fred Feleppa told commissioners they could consider changing Sue Dionne's job title to bookkeeper to resolve any incompatibility issues between her position as chief deputy treasurer and Moran Township treasurer. The board then would need to revise her job description, he said. Cheboygan County is facing a similar situation, said Mr. Feleppa.

At issue is a lack of checks and balances. With Ms. Dionne as a township treasurer, she is paying the county tax money on behalf of the township, and collecting that same money at the county level as a deputy treasurer.

"Calling her something else within the office would avoid the conflict that way," said Mr. Feleppa. "I need to fully explore that before I can recommend it."

Commissioners asked Mr. Feleppa to get further details on how Cheboygan County is handling the matter, including if the any job duties had changed.

Commissioners became aware of a new attorney general's opinion on incompatibility of the two positions in March, and asked Mr. Feleppa to look into the legalities of the matter.

The board voiced concerns that simply changing the title would not address the issue, because it would not change the responsibilities of the job.

Two years ago when the issue was first addressed by commissioners, the county treasurer's department assured them that measures were taken to avoid conflicts in accounting procedures. Last month, commissioners noted that the potential for impropriety exists with Ms. Dionne holding the two positions.

At Thursday's meeting, Commission Chair Dawn Nelson said simply changing Ms. Dionne's title could result in a lawsuit charging commissioners with circumventing the law. The conflict is in the job duties, she said, not the title.

"It would not sit too well with the people [county residents] that we agreed, fully knowing, to the title change, but there was no job change," said Mrs. Nelson.

To change the responsibilities of her job would include bringing the matter to the Wage and Classification Committee because a change in title and duties could impact her wages.

"If we're changing job titles, we're getting involved in reclassification," said Commissioner Carl Frazier. "We want to make sure we do it right."

A letter in support of Ms. Dionne signed by Moran Township Supervisor James Durm prompted the discussion.

Commissioners signed a oneyear contract with Inmate Healthcare of Peoria, Illinois, to manage health care at the county jail for $52,000. The new medical care program will reduce costs and stabilize monthly payments. It does not cover dental expenses. The contract had been reviewed by Mr. Feleppa.

The county has paid between $65,000 and $69,000 a year over the last two years and had been using Vital Care of Cheboygan.

Commissioners next meet Thursday, May 10, at 3:30 p.m. in the annex building at the Courthouse.