By Kirk Johannesen, The Republic
johannesen@therepublic.com
Columbus Regional Hospital now estimates its total damage from the June 7 flood at $125 million, a figure that will increase when more costs are known.
The largest cost is for the first floor and basement, which comprise nearly half of the hospital's square footage.
Cost to repair the first floor is $52 million and $42 million for the basement.
"While the number may seem shocking at first, it is not surprising given the extent of the damage across our hospital," said Jim Bickel, CRH chief executive officer.
CRH previously said the damages would be at least $25 million.
Higher cost expected
Dave Lenart, CRH director of facilities and materials management, worked with the hospital's senior leadership and contractors to arrive at the estimated cost, which includes only property and equipment.
The estimate was determined Wednesday evening in anticipation of presenting it to Federal Emergency Management Agency on Thursday.
Not included in the damage estimate are costs for cleanup, temporary generators for lighting, loss of business and employee salaries.
Costs for inventory and supplies were known because of past history of the costs.
Vehicle and property costs were based on market values.
McCarthy Construction was consulted for the building construction costs, and a dollar amount was applied to the square footage that has to be repaired.
"Working in construction and plant operations, I had a good feeling of what the dollar value was going to be, so I'm not that surprised by the number," Lenart said.
"I'm not happy with it, but it's what we're going on. It hurts."
One good thing, Lenart said, is that vendors and contractors are working to expedite help and "change internal red tape" to provide help.
"That's been a blessing," he said.
Determining the estimated costs of damage has not helped present a clearer idea of a timeline for the hospital's recovery, and when each service would be restored, Lenart said.
He expects a timeline to be determined next week. CRH would be without services in the basement for "quite a while," Lenart added.
Financial questions
How much assistance CRH can receive from FEMA or state agencies is not known, said Denise Glesing, hospital spokesperson and director or marketing and planning.
CRH also is trying to determine how much of the damage will be covered by its flood and business interruption insurance.
The hospital has $130 million in savings, and up to $30 million has been pledged to pay salaries and benefits of employees for at least the next three months.
That money had been planned for CRH's expansion and renovation project, which has been delayed.
The remaining $100 million represents approximately 200 days' cash on hand. Each day represents an organization's average operating expense. CRH's average daily operating expense is about $500,000.
Financial management practices and general industry and financial market guidelines require that hospitals maintain a certain number of days of cash on hand in their savings accounts, according to Marlene Weatherwax, CRH chief financial officer.
"These savings are important to manage unexpected circumstances, ensure operational funds to pay bills regardless of income flows and meet bond and financial lender requirements," Weatherwax said.
CRH will build a comprehensive financial plan for longterm stability once it knows what money will come from additional funding sources, Weatherwax said.
Those sources include:
Insurance payments.
FEMA and other government resources.
CRH Foundation funds raised.
Loans and bonds.
Revenues from services as they open.
The hospital has not determined if it will need to dip into the remaining $100 million to cover costs.
"It could be an option, although we have to strongly evaluate how much can be used without putting the hospital at financial risk for the future," Weatherwax said.