HomeMy WebLinkAboutAgenda - 12-14-2010 - 7bo~fl-aoio-og~
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: December 14, 2010
Action Agenda
Item No. ~_
SUBJECT: Approval of Health Department Expansion within Whiffed Human Service
Building and Approval of Budget Amendment #5-B
DEPARTMENT: Asset Management, Health
Department and Financial
Services
PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
Floor Plans
INFORMATION CONTACT:
Pam Jones (919) 245-2652
Dr. Rosemary Summer (919) 242-2411
Clarence G. Grier (919) 245-2453
Michael Talbert (919) 245-2153
Jeff Thompson (919) 245-2658
PURPOSE: To review and approve plans for the renovation of space for the Health and Dental
Clinics at the Whiffed Building and approve Budget Amendment #5-B.
BACKGROUND: In 2000 the County produced a space study that analyzed departmental
space needs through 2020, including those of the Health Department. The Health Department
requirements were confirmed in each of the 2004, 2006 and 2008 study updates. Most of the
operational space requirements for County departments have been satisfied through the
aggressive construction schedule carried out between 2006 and 2010. One of the largest
unmet needs, however, remains in the space allocated for the delivery of human services, in
particular health and dental services.
Social Services' long term needs have been met through the lease of 56,000 square feet at the
Hillsborough Commons Shopping Center in June 2008. The lease also included an option to
purchase the 108,000 square foot building situated on 10-acres of land on Mayo Street in
Hillsborough for approximately $15 million. Upfit costs for the Health/Dental space would add
several million dollars to this cost. Negotiations with the owner to bring the asking price into a
more realistic range, given the state of property values over the past two years, have not been
successful and do not appear will be successful in the future. The Board of Commissioners
have, therefore, articulated the desire to allow the option to expire without effecting the
purchase.
Currently, no long term plan for health and dental clinic space exists. Over the past two years
options have been discussed, including collaboration with UNC Hospitals in its development of
the new hospital in Hillsborough; and with Durham Technical Community College for possible
inclusion of clinic space in future facilities at the Orange Campus. While these, or other yet to
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be discussed options may be viable in the future, it is not clear when economic circumstances
would allow the County to enter into a building program this endeavor represents.
To maintain the necessary level of service for health and dental services and to anticipate and
respond to the projected increase in needed services future health care reform may present,
staff has worked to develop interim plans that support needed services for at least the next
decade. Renovation of the current clinic area and areas vacated by Social Services at the
Whiffed Building is proposed.
In January 2010 the Board authorized the reallocation of space at the Whiffed Building for 1)
the Health and Dental Clinics; and 2) for administrative space to be used by the Orange County
Board of Education. According to the abstract, the renovation of the Health Clinic area was to
serve three to five years pending decisions relative to the Hillsborough Commons project. The
cited cost estimate was $200,000-$250,000, plus equipment. This renovation would have
covered three major areas: HVAC re-zoning to serve the new use; bare essential electrical
modifications to provide appropriate electrical service for the relocated equipment; and
paint/carpet needed to make the space presentable. This level of renovation did not invoke
additional work for building code compliance.
Since January 2010, two notable actions have been taken which resulted in an increased
scope of work, and therefore associated cost, of renovating the Whiffed space:
1.) Plans to consolidate Dental Services to the Whiffed Building were approved by the Board
in September 2010; and
2.) The decision to not pursue purchase of Hillsborough Commons as reiterated by the Board
in various discussions, November 18, 2010 being the most recent.
Upon approval of the consolidated dental services in September, the architect was asked to
formulate the plans which would adequately support the expanded services using the
reallocated space at Whiffed. Health and Dental staff worked with the architect to prepare a
plan that would serve the needs of the community for an estimated seven to ten years. The
presented plan reflects those efforts.
In September 2010 the County Manager reported the Orange County School Board's intent to
decline use of the Whiffed Building. The Board of Education's declination of the space
prompted the County to consider more seriously how to address structural issues created by
substandard building practices employed in the pre-1970's renovations. While the building is
structurally sound, a structural analysis conducted during the 2000 HVAC renovation at the site
revealed three areas that would benefit from reinforcement should the area be utilized for
purposes other than general office use:
1.) Conference room on the first floor adjacent to the old library space; and
2.) Area previously used by the Library for the children's collection; and
3.) Second floor office areas immediately above the old library space.
Although no assignment has been approved for use of the subject areas #1 and #2 above,
Board members will recall that representatives of the arts community have appeared before the
Board requesting use of the building. Further, on November 18, 2010, the Board authorized the
Manager to continue discussions with the Town of Hillsborough regarding a possible agreement
for use of the old Library space for this purpose. Should an agreement occur for this purpose,
the structure beneath the two areas identified in #1 and #2 above need to be considered.
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Based on the Board's direction that the arrangement not cost the County money, it is also
assumed the costs of that work would be borne by new users.
The Health Department has requested use of the second floor area, which will make additional
offices available for employees now sharing offices; and for the development of rooms for
patient education and general training. Reinforcement in the area cited as #3 above will resolve
any structural questions that may exist in the area designated for conference/training on this
floor.
The structural work has been designed and is part of the pending bid package, which will be
released immediately following the Board's approval of this item. The bid isolates the costs of
the structural work separately so it can be awarded in part or in whole; and the cost parsed to
the appropriate parties. The construction estimate for the structural work in all three areas
totals $80,000.
The structural work associated with the old Library space will not benefit the clinic in any way,
but significant operational disruption and destruction of newly renovated space would be
necessary if it were done later.
Major renovation will be done to approximately 14, 814 square feet within the Whiffed Building,
with the remaining space receiving cosmetic work (paint/carpet). Renovation costs for the
Whiffed Building are estimated at $99/square foot of renovated area which compares favorably
to the estimated $300 per square foot which can be expected for new construction of medical
clinic space. Higher renovation costs per square foot can be expected at the Whiffed site due
in part to the age and type of construction of the building and the proposed use of the space.
Renovations at Hillsborough Commons, including all sustainable design items (windows,
skylights, etc) and the facade work were completed for $67.60 per square foot.
At the conclusion of this renovation project, the Health Department will have approximately
38,000 Gross Square Feet (GSF) square feet available for operational use, compared to an
estimated 17,000 GSF currently assigned.
This plan provides Health and Dental clinic space suitable for an estimated seven to ten years.
The plan, while not "new-building" perfect, effectively uses the existing Whiffed structure to
deliver quality clinic space in a reasonable timeframe and at a reasonable cost. Where
structure has created a costly or insurmountable impediment to the desired usage goal,
technology or other work around strategies have been recommended (e.g. monitoring waiting
areas via camera; personally escorting patients to clinic space).
The revised timeline by which the project would be delivered is as follows:
TASK PROPOSED
BEGINNING
DATE END BY
DATE
BOCC Action: A royal of lans for the renovation of s ace 12/14/10 12/14/10
Biddin hase 12/20/10 1/19/11
BOCC Action: Bid Award 2/15/11 2/15/11
Phase 1 Construction -Buildin A est. 90 da duration ,Health Clinic move 2/16/11 5/23/11
Phase II Construction -Buildin Best. 45 da duration 5/26/11 7/11/11
Dental move from Carr Mill 7/25/11 7/29/11
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FINANCIAL IMPACT: Development costs for this project are estimated at $1.47 million
allocated in the followin cate ories:
HEALTH ESTIMATED COSTS DENTAL ESTIMATED COSTS
Construction $1,016,000 $203,000
Professional Services $ 83,000 $ 15,000
Furnishin s $ 45,000 $ 5,000
E ui ment $ 33,000 $ 70,000
Total $1,177,000 $293,000
This estimate was developed by staff, the project architect -Corley Redfoot Zack (CRZ), and
CostPlus Estimators, a third party estimating firm.
Medicaid Maximization Cost Settlement Funds are the proposed funding source for this project.
In the mid-90s, the federal Medicaid program recognized that health departments were often
expending more funds in providing care for Medicaid recipients than the reimbursement that
was provided. In order to bring health departments to a more equitable "cost reimbursement" in
line with that received by federally qualified health centers and by public hospitals, the federal
Medicaid program authorized a supplemental payment for health departments to adjust for the
cost of providing Medicaid direct services on an annual basis. The amount reimbursed is only
calculated on the federal portion of Medicaid, not on the state share. Federal regulations
require the funds to be allocated and spent for the programs that actually earned the funds.
The settlement amount is calculated on actual expenses and therefore generally paid one year
after the fiscal year in which the services were provided. The first payment made to health
departments in North Carolina was in late 1997 and represented a partial payment for the
federal fiscal year October 1994 through September 1995. That payment was $37,721.48. In
the fall of 1998, a second payment was received that was the balance of 1994-95 and 1995-96.
Since then the Health Department has received an annual payment in late spring that
represents payment for services in a previous year. As an example, the County received notice
of payment for fiscal year 2006-2007 on June 23, 2008 ($270,203.70). Each year, the Board of
Commissioners has authorized budget amendments accepting these funds into this project
account.
The Board. of Commissioners established a Medicaid Maximization Project Ordinance in 1998
to allow for the receipt and use of these funds. The intent was to save and utilize the funds for
renovation, capital building, equipment, and furnishings as needed by health and dental
programs, thereby assisting the County in meeting service obligations to residents. Federal and
State regulations require these funds to be budgeted and expended to further the objectives of
the program that generates the funds. Allowed uses of these funds include public information
and outreach, automation of administrative operations, capital improvements including
equipment and furnishings, and program support services.
In 2001-2002, approximately $225,000 was used to renovate the clinical space in conjunction
with the HVAC replacement at Whiffed. Over the years, the Board of Commissioners has
approved utilization of the funds to replace equipment on an emergency basis that has broken
but was not able to be funded through the General Fund. These funds were also used to bring
Health Department facilities and equipment into compliance with accreditation requirements in
2007. The Health Department has been parsimonious in the use of these funds, anticipating
the need to build or renovate adequately appointed space for the future. One such anticipated
use was the upfit of Hillsborough Commons, discussed in 2007 and 2008.
The Health Department has received additional Medicaid Maximization Cost Settlement funds
totaling $576,068 above the amount currently budgeted. Medicaid Maximization Budget
Amendment #5-B provides for the receipt of these revenues and amends the current Medicaid
Maximization Capital Project Ordinance as follows:
Revenues for this project:
FY 2010-11
Current Bud et FY 2010-11
Amendment FY 2010-11
Revised
Medicaid Maximization funds $1,816,093 $576,068 $2,392,161
Total Project Fundin $1,816,093 $576,068 $2,392,161
Appropriated for this project:
FY 2010-11
Current Bud et FY 2010-11
Amendment FY 2010-11
Revised
IT E ui ment $5,000 $0 $5,000
E ui ment $169,988 $0 $169,988
Furnishin s $50,000 $0 $50,000
General Renovations $1,591,105 $576,068 $2,167,173
Total Costs $1,816,093 $576,068 $2,392,161
The total Medicaid Maximization budget will be $2,392,161 after the budget amendment with
$359,465 expended since the inception of the project. This leaves a balance of $2,032,696
available for this and other projects in the future.
The Dental Capital Equipment Project was authorized and funded by the Board in the 2010-
2011 budget deliberations at $100,000 to replace broken and aging equipment. These funds
will be used for equipment as part of the facility renovations.
Available Resources:
Medicaid Maximization Capital Project $2, 032,696
Dental Capital Equipment Capital Project 100,000
Total $2,132,696
Estimated Project Costs $1,470,000
Estimate of Medicaid Maximization Funds
balance after completion $ 662,69
Adequate funding is available for the project within the Medicaid Maximization Capital Project
and the Dental Equipment Capital Project which are funded in the County Capital Project Fund.
RECOMMENDATION(S): The Manager recommends that the Board:
1.) Approve the scope and design of the project as presented;
2.) Authorize bids to be solicited;
3.) Approve the $576,068 Budget Amendment # 5-B for the Medicaid Maximization Capital
Project;
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4.) Approve the use of Medicaid Maximization Capital funds and Dental Capital Equipment
Funds to complete this project based on the Construction estimate of $1.47 million; and
5.) Authorize the Manager or his designee to negotiate and execute amonth-to-month
extension of the existing Carr Mill Mall lease for a period not to exceed 90 days following
the June 30, 2011 expiration.
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