By: Max Hackett Source: The Herald-News 05-27-2007

The new Rhea Medical Center will be completed on schedule and under budget, according to Exley Hill, construction supervisor for American Health Facilities Development.

Hill reported his projections to the Rhea Medical Center Board of Directors Tuesday.

The construction had fallen behind schedule early in the spring, but recent good weather and continuing cooperation among the subcontractors, has put the facility back on schedule to be completed July 27, Hill said.

The construction budget of approximately $28 million included almost $1.5 million in a contingency fund set aside for cost overruns, according to Rhea Medical Center CFO Harv Sanders. More than $900,000 remains in the fund, with less than two months left before the facility is completed. Barring any major and unforeseen setbacks, Hill said that most of the remaining money should be returned to RMC.

“The confidence we have in the builders, and their ability to keep things moving, has been consistently confirmed by their performance,” Rhea Medical Center CEO Ken Croom said.

The board also approved the medical center’s budget for 2007-08. The budget projects earnings of nearly $2.8 million for the year.

“The medical center will make it’s final loan payment to the county, which is about $141,000, and we’ll pay about $1 million in interest payments on the new hospital in the coming year, which is an interest-only year,” Sanders said. “So that will come out of the projected $2.8 million in earnings for 2008 and should leave the medical center in very good shape without having to approach the county for any assistance. It looks like we shouldn’t have a problem.”

The budget assumes patient admissions, outpatient visits and emergency department visits will all grow by 6 percent, primarily due to the new facility, Sanders said.

“We modeled our projections on information from several hospitals similar in size and demographics served that had opened new facilities like ours,” Sanders said.

A rate increase of 2 percent and salary increases of 2.5 percent are also projected.

Max Hackett can be reached at maxhackett@xtn.net