A consultant will be studying the effectiveness of a capital campaign to raise money for the proposed north addition at Floyd Valley Hospital.
The Floyd Valley Hospital (FVH) Board of Trustees recently approved hiring The Renaissance Group, of Des Moines, to determine if a capital campaign is feasible for the project.
A capital campaign is a fundraising effort focused on raising money for a specific project.
The FVH Foundation Board recommended a $2 million capital campaign or 10 percent of the proposed $20 million north addition project, said Mike Donlin, hospital administrator.
The north addition concept includes a two-story addition with surgical operating rooms and administrative offices on the top floor and a new family medicine clinic on the lower level; along with renovations in the existing hospital building.
Donlin, also a member of the foundation board, said the $2 million would be used to prepare space inside the hospital for its MRI (Magnetic Resonance Imaging) equipment.
"That's the portion of the north addition we think will be a possible cause to raise the money," Donlin said.
Currently, the MRI is in a separate trailer outside the main hospital building.
Larry Petersen, FVH board of trustees secretary and foundation board member, said both boards are in support of gearing a capital campaign toward the MRI project.
"We feel it's really important to put that inside the new addition," he said. "It was something we felt we have to do to stay competitive."
Determining whether a capital campaign would be effective through a feasibility study is also important, Petersen said.
"It's a little costly but we felt it was a good investment," he said. "We thought if we want to go ahead with this we have to have a study."
At a cost of $22,000, The Renaissance Group will spend the next six months educating people on the hospital's proposed north addition project and obtaining their feedback.
"From all of those interviews and education sessions, they're going to come up with a feasibility report," Donlin said.
If the report is favorable, the hospital trustees could decide to move forward with a capital campaign for the north addition, he said.
Donlin said hospital officials haven't done a capital campaign for a building project since the 1970s when the original hospital was constructed.
"All the other times the hospital has done revenue bonds or used our savings for projects," Donlin said.
Petersen reminded the public that the north addition is still in the conceptual stage as it has yet to be approved by the hospital trustees.
"There's a lot of questions, a lot of unknowns," he said.
Currently, hospital officials are working on an application to obtain a $15.8 million United States Department of Agriculture rural development loan to help pay for the north addition.
That process has been delayed while environmental studies are done for a wetland on the hospital property and because the north addition would be in a flood plain.
"It really kind of puts everything on hold until we get that cleared up," Petersen said.
Donlin pointed out that raising money through a capital campaign could give lenders more confidence in the north addition project.
"Strong community support makes it look good to these people that will loan us the other 90 percent," Donlin said.
He explained that capital campaigns are a positive because, in FVH's case, that is $2 million less to be paid for by the hospital and ultimately its patrons.
"That interest cost has to be earned in what we charge people," Donlin said. "It's a way to keep our costs down in the long run."
He said a capital campaign would also be a way for the community to show its support for the north addition project.
"Whoever wants to rally around the cause of this MRI project and thinks it's worthwhile can chip in either with a pledge or an outright donation," Donlin said.