This week hospital board members learned that bids for the $22.5 million renovation/ refurbish for the Cook County North Shore Hospital and Care Center came in 7.8 percent higher than estimated.
A large stack of bids was discussed at the hospital board’s special meeting held June 15. When the dust settled it was determined that the bids pushed the price past the hospital’s budget. “Which means,” said Shelly Peterson, Boldt executive vice president and general manager of Minnesota operations, “We have to do some value engineering and see what we can take out of the project.”
Staff from Boldt will work with DSGW Architects and hospital/care center maintenance staff and administration, as well as with the hospital board to decide what must be cut in the next two weeks, said Peterson.
There were four areas that came in high, said Mark Walch, Boldt’s chief estimator. “They were in mechanical, electrical, drywall and tile,” he said.
Boldt was hired by the hospital board to act as construction manager at risk. Boldt provides consulting to the hospital board and administration during the design of the facility and also through construction. They also serve as the general manager for the project, and have placed construction manager Ruth Drake here for the next two years to oversee the work.
A July 23 groundbreaking is still in the plans, said Peterson, and despite the new challenges, “We still believe we can keep to our (two-year) timetable.”
Walch said a list of 40 subcontracts was mailed out and Boldt received “at least” three bids for each contract. “We got back at least 120 bids,” he said.
Boldt will perform some of the work, said Walch. “We will do the concrete work, carpentry, demolition, and erect the steel.”
Hospital Director Kimber Wraalstad said while some cuts might have to be made, “We are not willing to compromise on function or functionality. So far we have looked at 87 different items that we might be able to change. Shelly is also checking with her counterparts in Wisconsin and Michigan to see if they have any help or ideas that can save us some money. We’re trying to leave no stone unturned.”
The hospital has received a direct loan of $12,275,000 from USDA with a 3.5 percent maximum interest rate. AgStar will provide the construction financing that will be repaid with a USDA direct loan upon completion of the construction.
“Should the interest rate go down, we will get a lower interest rate but it can’t go higher than 3.5 percent, “ said Director Wraalstad.
All of the bonds are secured by mortgage and security agreements. The hospital district’s real estate will be mortgaged with a blanket security interest in the district’s equipment and accounts receivable.
The hospital/care center was also awarded a $100,000 grant from the Iron Range Resources Rehabilitation Board (IRRRB). Wraalstad said the City of Grand Marais applied for the grant on behalf of the hospital/care center.
Wraalstad said that both the Grand Marais State and Security State banks have each committed to a construction loan of $500,000; which shows local financial support in the facility project, she added.
Did you know?
As of April 30, 2015 the Cook County North Shore Hospital & Care Center has 145 employees, of which 86 are full-time and 59 are parttime and casual. Minority members make up 6.9 percent of the full-time work force while female employees make up 82.06 percent of the total workforce.
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