Cost of new health-care building rises to $15 million

<p>The Petaluma Health Center’s estimated expense for purchasing and renovating a facility on North McDowell Boulevard has risen from $11 million to $15 million, but an additional funding source might soon provide some of the money.</p><!-- Nothing to do. The paragraph has already been output --><p>The PHC is in the final stages of reaching a purchase agreement for a building on 1179 N. McDowell Blvd. that will provide 53,000 square feet of space, compared with 15,000 square feet at the PHC’s current location, at 1301 Southpoint Blvd.</p><p>Originally, the PHC hoped to obtain the estimated $11 million to purchase and renovate its new site by obtaining $6 million in federal stimulus funding from the Health Resources and Services Administration, part of the U.S. Department of Health and Human Services; $4 million in bond financing; and a $1 million loan from the Petaluma Health Care District.</p><p>“But construction estimates were generally made before architects went into the building. We need to pay prevailing wages for the work, due to the Davis-Bacon Act, and need to have everything done by American companies,” said Kathie Powell, executive director of the health center.</p><p>The Davis-Bacon Act of 1931 is a U.S. federal law that requires the payment of prevailing wages on public works projects.</p><p>Powell says that the health center now hopes to obtain $9 million in federal stimulus funding; $5 million in bonds; a $1 million loan from the Petaluma Health Care District; and $500,000 from a Congressional effort led by Congresswoman Lynn Woolsey.</p><p>On Friday, Woolsey helped to secure House approval of $500,000 for the PHC so that it can renovate its new home. The funding was part of the Labor, Health and Education Appropriations bill, and it now must be reconciled with a Senate version of the bill.</p><p>“It’s not a sure thing yet, but her office staff says that there is a good chance we will receive the money,” Powell said. “We’ve been hoping for (Congressional) funding for two years, and this year, because we’re so close, I submitted a request for it.”</p><p>The PHC also plans to submit a $9 million request for federal stimulus funding by Saturday, Aug. 1. Powell feels that the health center has a good chance to receive the funding because she has been told that “shovel ready” projects such as the PHC’s will be given priority. She expects to find out on Nov. 1 if the PHC will receive the money.</p><p>She also is confident that the bond money will be obtained.</p><p>“UnitedHealthcare has a bonds program specifically for community health centers, and I expect that we’ll qualify for the bonds,” she said, adding that the PHC hopes to receive $5 million, and would cover some $500,000 in expenses.</p><p>Powell expects to know within 60 days if the bond money will be secured.</p><p>The Petaluma Health Care District Board of Directors voted on July 8 to provide a $1 million loan to the health center to help purchase and renovate its new site, but stipulated that the loan will be given only if the other funding from the other sources is acquired.</p><p>On Monday, the PHCD provided the health center with $250,000 for escrow down-payment.</p><p>“But it is refundable if the deal doesn’t happen,” said Daymon Doss, the PHCD’s executive director.</p><p>(Contact Dan Johnson at dan.johnson@arguscourier.com)</p>