TITLE 77: PUBLIC HEALTH
CHAPTER II: HEALTH FACILITIES AND SERVICES REVIEW BOARD
SUBCHAPTER b: OTHER BOARD RULES
PART 1120
HEALTH FACILITIES AND SERVICES FINANCIAL AND
ECONOMIC FEASIBILITY REVIEW
SECTION 1120.10 STATUTORY AUTHORITY AND DEFINITIONS
Section 1120.10 Statutory
Authority and Definitions
a) Statutory
Authority
This Part is
filed pursuant to Section 12 of the Illinois Health Facilities Planning Act
(Act) [20 ILCS 3960/12]. A public hearing on this Part was held in accordance
with the provisions of Section 12 of the Act. A record of the public hearing
on this Part is available for inspection at the HFSRB offices at 525 West
Jefferson Street, Springfield IL 62761.
b) Definitions
1) "Agency"
means the Illinois Department of Public Health (DPH).
2) "Audit"
means the most recent formal examination, correction and official endorsement
of financial reports by an independent certified public accountant that is in
accordance with generally accepted auditing standards.
3) "Capital Expenditure" means an expenditure as
defined in Section 3 of the Act [20 ILCS 3960/3] and includes expenditures made
by, through, or on behalf of a health care facility as specified at 77 Ill.
Adm. Code 1130.
4) "Debt Financing" means all or any portion of project
costs financed through borrowing. Leasing, for purposes of this Part, is considered
borrowing. Portions of lease payments that are for service, insurance, or
other noncapital costs are not considered borrowing.
5) "Economically Feasible" means the costs of
financing, constructing, acquiring, and operating a proposed project are
reasonable and the expected impact of the project's operating and capital costs
on the overall costs of health care are reasonable.
6) "Estimated Total Project Cost" means the dollar
amount of all expenditures or other transactions estimated to complete a
project. This amount includes all items that are to be capitalized and also
includes the fair market value of any items that may be acquired through lease,
donation, gift or other means.
7) "Fair Market Value" means the dollar value of a
project or any component of a project that is accomplished by lease, donation,
gifts or any other means that would have been required for purchase, construction,
or acquisition.
8) "Financially Feasible" means that funds are
available or will be obtained, and that are equal to or in excess of the
estimated total project and related costs, without jeopardizing the applicant's
financial viability.
(Source: Amended at 40 Ill.
Reg. 14067, effective September 27, 2016)
 | TITLE 77: PUBLIC HEALTH
CHAPTER II: HEALTH FACILITIES AND SERVICES REVIEW BOARD
SUBCHAPTER b: OTHER BOARD RULES
PART 1120
HEALTH FACILITIES AND SERVICES FINANCIAL AND
ECONOMIC FEASIBILITY REVIEW
SECTION 1120.20 FINANCIAL AND ECONOMIC FEASIBILITY INTRODUCTION AND APPLICABILITY
Section 1120.20 Financial
and Economic Feasibility – Introduction and Applicability
a) Introduction
1) This Section
contains the review criteria that pertain to the financial and economic
feasibility of a project. HSFRB shall consider a project's conformance with
these criteria (as applicable), as well as a project's conformance with all
other applicable review criteria.
2) Applications
shall be subject to this Part except for those that are classified as emergency,
those requesting a certificate of exemption, those for long-term care
facilities and categories of service, and those that have no estimated project
cost.
b) Financial Information of
Applicants
1) Applicants
shall be identified, specifying their roles in the project funding or
guaranteeing the funding (sole responsibility or shared) and percentage of
participation in that funding.
2) Applicants
shall submit the following, if applicable:
A) Current
bond rating − The rating must have been affirmed within the latest
18-month period prior to the submittal of the application; and
B) Both:
i) Most
recent audited financial statement; or evidence of a performance bond; or
evidence of an escrow account with the cash that is being used for the subject
project; and
ii) a
commitment letter from a loan agency verifying the debt agreement.
3) Sections
1120.120, 1120.130 and 1120.140(a) do not need to be addressed by the
applicants responsible for funding or guaranteeing the funding of the project
if the applicant has a bond rating of A- or better from Fitch's or Standard and
Poor's rating agencies, or A3 or better from Moody's (the rating must have been
affirmed within the latest 18-month period prior to the submittal of the
application).
c) Charity Care
1) Applicants
shall indicate the amount of charity care provided during the latest three
audited fiscal years, the cost of charity care and the ratio of that charity
care cost to net patient revenue.
2) If the applicant owns or
operates one or more facilities, the reporting shall be for each individual
facility located in Illinois. If charity care costs are reported on a
consolidated basis, the applicant shall provide documentation as to the cost of
charity care; the ratio of that charity care to the net patient revenue for the
consolidated financial statement; the allocation of charity care costs; and the
ratio of charity care cost to net patient revenue for the facility under
review.
3) If
the applicant is not an existing facility, it shall submit the facility's
projected patient mix by payer source, anticipated charity care expense and
projected ratio of charity care to net patient revenue by the end of its second
year of operation.
d) Project Types and
Applicable Review Criteria
1) Unless
otherwise stated, only the applicants that are responsible for funding or
guaranteeing funding of the project shall provide the documentation required by
the applicable review criteria.
2) For
projects owned/operated by the State of Illinois, exclusive of the University
of Illinois hospital, the following review criteria apply:
A) Section
1120.110 Project and Related Cost Data – Review Criteria;
B) Section 1120.120 Availability
of Funds – Review Criteria;
C) Section 1120.130 Financial
Viability − Review Criteria; and
D) Section 1120.140 Economic
Feasibility − Review Criteria:
i) Subsection
(c) Reasonableness of Project and Related Cost – Review Criteria;
ii) Subsection
(d) Projected Operating Cost.
3) For
all projects except those owned/operated by the State of Illinois, exclusive of
the University of Illinois hospital, all Sections in this Part apply.
(Source: Amended at 40 Ill.
Reg. 14067, effective September 27, 2016)
SUBPART B: INFORMATION REQUIREMENTS AND REVIEW CRITERIA
| TITLE 77: PUBLIC HEALTH
CHAPTER II: HEALTH FACILITIES AND SERVICES REVIEW BOARD
SUBCHAPTER b: OTHER BOARD RULES
PART 1120
HEALTH FACILITIES AND SERVICES FINANCIAL AND
ECONOMIC FEASIBILITY REVIEW
SECTION 1120.110 PROJECT AND RELATED COST DATA REVIEW CRITERIA
Section 1120.110 Project and
Related Cost Data – Review Criteria
a) Estimated Total Project
Cost
The applicant shall provide the
estimated total project cost, including the amounts for each cost component
(line item) applicable to the project. When a project or any component of a
project is to be accomplished by lease, donation, gift or any similar means,
the fair market value or dollar value that would have been required for
purchase, construction or acquisition shall be included in the estimated total
project cost. The applicant shall submit documentation as to the fair market
or dollar value as defined in 77 Ill. Adm. Code 1130.140. Costs shall be
provided for the following components (line items), as applicable:
1) Preplanning
Costs − those costs incurred prior to the submission of an application,
such as development and feasibility studies, market studies, legal fees, bid
solicitation, etc.;
2) Site Survey
and Soil Investigation Fees − the costs for surveying of a proposed
project site and related soil investigation fees;
3) Site Preparation
Costs includes, but is not limited to, costs for equipment rental for
earthwork, concrete, lifting and hoisting, site drainage, utilities, demolition
of existing buildings or structures on site, clearing, grading and related
earthwork;
4) Off-site
Work Costs – all costs related to off-site activities, such as drainage, pipes,
utilities, sewage, traffic signals, roads and walks;
5) Construction
and Modernization Contracts – all costs and expenses covered under the
construction contract, including major medical and other fixed equipment,
contractor's overhead and profit;
6) Contingencies
− a cost allowance to be used solely for unforeseeable events relating to
construction or modernization costs;
7) Architectural
and Engineering Fees – the costs
associated with the design, development of contract documents, and construction
administration related to the proposed project, including only those fees
defined as "basic services" in Document B101-2007, Standard Form
of Agreement Between Owner and Architect (www.aia.org) (American Institute of
Architects, 1735 New York Ave., NW, Washington DC 20006-5292, 800/242-3837; 2007,
no later editions or amendments included);
8) Consulting
and Other Fees – the costs and charges for the services of various types of
consulting and professional expertise, including environmental impact, computer
software fees, certificate of need fees, etc. (the applicant shall provide a
detailed listing of types and amounts of such fees);
9) Capital
Equipment Not Included in Construction Contracts − the cost of all fixed
and movable capital equipment, including any medical equipment and the cost of
installation of the equipment, excluding any trade-in allowances on existing
equipment, that are not included in construction contracts;
10) Bond
Issuance Expense − all costs associated with the issuance of bonds to
finance a project, including issuer's fees, bond counsel's fees, official
statements (feasibility study), official statement printing, printing of bonds,
survey of the collateral site, title insurance to property, auditor's fees,
trustee fees, underwriters' discount, and government fees (if applicable);
11) Net
Interest Expense During Construction – the cost representing the difference
between interest earned on funds for construction and interest expense on the
amount of borrowed funds;
12) Other
Costs that Are To Be Capitalized − miscellaneous fees, expenses (e.g.,
asbestos removal, mold treatment, temporary insurance, workers' compensation,
surface parking lots, temporary roads or paving, lighting, fencing, security,
etc., that are not included in construction contracts) and working capital
expenses related to the project (the applicant shall provide a detailed listing
of all other fees and expenses and the amount of each);
13) Acquisition
of Buildings or Other Property (excluding land) − the cost incurred (or
the fair market value) for the acquisition of buildings or property for the
project. Any acquisition that has occurred within two years prior to the date
of application for permit submission must be included as part of project costs.
HFSRB NOTE: If the acquisition is
by a lease, and the terms of the lease include capital improvements to the
property, then those capital improvements are to be listed separately.
b) Related Project Cost
Data and Information Requirements
The applicant shall provide the
following information related to the project, as applicable.
1) Land
Acquisition Cost − the purchase price or fair market value, whichever is
applicable, for the acquisition of land that has been acquired within two years
prior to the date of application for permit submission or that will be required
in order to undertake the project. Acquisition of land is not included as part
of total estimated project costs.
2) Operating
Start-up Costs − the estimated non-capitalized operating start-up costs,
including any estimated initial operating deficit, and any other necessary
amounts to make the project operational (AMPO). Any capitalized costs that are
related to the start-up costs of a facility must be included in the total
estimated project cost.
3) Project
Development Schedule − a project completion schedule that provides the
project start date, the estimated date when one third of the total estimated
project cost will be expended, and the anticipated date for completion of the
project.
HFSRB NOTE: Project completion
includes all post-construction activities, including installation of
furnishings and equipment, inspections and training of staff. (Applicant should
refer to definition of "Project Completion" in 77 Ill. Adm. Code
1130.140.)
4) Construction
Schedule − a construction schedule that provides the dates for
construction start and midpoint of construction and anticipated date for
construction completion.
5) Debt
Service Reserve Fund − the amount that will be placed in a debt service
reserve fund and the terms of and conditions on uses of the fund.
(Source: Amended at 40 Ill.
Reg. 14067, effective September 27, 2016)
| TITLE 77: PUBLIC HEALTH
CHAPTER II: HEALTH FACILITIES AND SERVICES REVIEW BOARD
SUBCHAPTER b: OTHER BOARD RULES
PART 1120
HEALTH FACILITIES AND SERVICES FINANCIAL AND
ECONOMIC FEASIBILITY REVIEW
SECTION 1120.120 AVAILABILITY OF FUNDS - REVIEW CRITERIA
Section 1120.120 Availability
of Funds − Review Criteria
Applicants shall document that financial resources will be
available and be equal to or exceed the estimated total project cost plus any
related project costs by providing evidence of sufficient financial resources
from the following applicable sources:
a) Cash
and Securities − statements (e.g., audited financial statements, letters
from financial institutions, board resolutions) as to:
1) the
amount of cash and securities available for the project, including the
identification of any security, its value and availability of those funds; and
2) interest
to be earned on depreciation account funds or to be earned on any asset from
the date of applicant's submission through project completion;
b) Pledges
− for anticipated pledges, a summary of the anticipated pledges showing
anticipated receipts and discounted value, estimated time table of gross
receipts and related fundraising expenses, and a discussion of past fundraising
experience. Provide a list of confirmed pledges from major donors (over
$100,000);
c) Gifts
and Bequests − verification of the dollar amount, identification of any
conditions of use, and the estimated time table of receipts;
d) Debt
– for applicants with projects involving debt financing, a statement of the
estimated terms and conditions (including the debt time period, variable or
permanent interest rates over the debt time period, and the anticipated
repayment schedule) for any interim and for the permanent financing proposed to
fund the project, including:
1) For
general obligation bonds, proof of passage of the required referendum or
evidence that the governmental unit has the authority to issue the bonds and
evidence of the dollar amount of the issue, including any discounting
anticipated;
2) For
revenue bonds, proof of the feasibility of securing the specified amount and
interest rate;
3) For
mortgages, a letter from the prospective lender attesting to the expectation of
making the loan in the amount and time indicated, including the anticipated
interest rate and any conditions associated with the mortgage, such as, but not
limited to, adjustable interest rates, balloon payments, etc.;
4) For
any lease, a copy of the lease, including all the terms and conditions,
including any purchase options, any capital improvements to the property and
provision of capital equipment;
e) Governmental
Appropriations − a copy of the appropriation Act or ordinance accompanied
by a statement of funding availability from an official of the governmental
unit. If funds are to be made available from subsequent fiscal years, a copy
of a resolution or other action of the governmental unit attesting to this
intent;
f) Grants
− a letter from the granting agency as to the availability of funds in
terms of the amount and time of receipt;
g) All Other
Funds and Sources − verification of the amount and type of any other
funds that will be used for the project.
(Source: Amended at 40 Ill.
Reg. 14067, effective September 27, 2016)
| TITLE 77: PUBLIC HEALTH
CHAPTER II: HEALTH FACILITIES AND SERVICES REVIEW BOARD
SUBCHAPTER b: OTHER BOARD RULES
PART 1120
HEALTH FACILITIES AND SERVICES FINANCIAL AND
ECONOMIC FEASIBILITY REVIEW
SECTION 1120.130 FINANCIAL VIABILITY - REVIEW CRITERIA
Section 1120.130 Financial
Viability − Review Criteria
a) Financial Viability
Waiver
The applicant is
NOT required to submit financial viability ratios if:
1) all
project capital expenditures, including capital expended through a lease, are
completely funded through internal resources (cash, securities or received
pledges); or
HFSRB NOTE: Documentation of
internal resources availability shall be available as of the date the
application is deemed complete.
2) the
applicant's current debt financing or projected debt financing is insured or
anticipated to be insured by Municipal Bond Insurance Association Inc. (MBIA)
or its equivalent; or
HFSRB NOTE: MBIA Inc is a holding
company whose subsidiaries provide financial guarantee insurance for municipal
bonds and structured financial projects. MBIA coverage is used to promote
credit enhancement as MBIA would pay the debt (both principal and interest) in
case of the bond issuer's default.
3) the
applicant provides a third-party surety bond or performance bond letter of
credit from an A rated guarantor (insurance company, bank or investing firm)
guaranteeing project completion within the approved financial and project
criteria.
b) Viability Ratios
Applicants that are responsible
for funding or guaranteeing funding of the project shall provide viability
ratios for the latest three years for which audited financial statements are
available and for the first full fiscal year at target utilization, but no more
than two years following project completion. When the applicant's facility
does not have facility specific financial statements and the facility is a
member of a health care system that has combined or consolidated financial
statements, the system's viability ratios shall be provided. If the health
care system includes one or more hospitals, the system's viability ratios shall
be evaluated for conformance with the applicable hospital standards. The
latest three years' audited financial statements shall consist of:
1) Balance
sheet;
2) Revenues
and expenses statement;
3) Changes
in fund balance; and
4) Changes
in financial position.
HFSRB NOTE: To develop the above
ratios, facilities shall use and submit audited financial statements. If
audited financial statements are not available, the applicant shall use and
submit Federal Internal Revenue Service tax returns or the Federal Internal
Revenue Service 990 report with accompanying schedules. If the project involves
the establishment of a new facility and/or the applicant is a new entity,
supporting schedules to support the numbers shall be provided documenting how
the numbers have been compiled or projected.
c) Variance
Applicants not in compliance with
any of the viability ratios shall document that another organization, public or
private, shall assume the legal responsibility to meet the debt obligations
should the applicant default.
(Source: Amended at 40 Ill.
Reg. 14067, effective September 27, 2016)
| TITLE 77: PUBLIC HEALTH
CHAPTER II: HEALTH FACILITIES AND SERVICES REVIEW BOARD
SUBCHAPTER b: OTHER BOARD RULES
PART 1120
HEALTH FACILITIES AND SERVICES FINANCIAL AND
ECONOMIC FEASIBILITY REVIEW
SECTION 1120.140 ECONOMIC FEASIBILITY - REVIEW CRITERIA
Section 1120.140 Economic
Feasibility − Review Criteria
a) The
applicant shall document the reasonableness of financing arrangements by
submitting a notarized statement signed by an authorized representative that
attests to one of the following:
1) That
the total estimated project costs and related costs will be funded in total
with cash and equivalents, including investment securities, unrestricted funds,
received pledge receipts and funded depreciation; or
2) That
the total estimated project costs and related costs will be funded in total or
in part by borrowing because:
A) A
portion or all of the cash and equivalents must be retained in the balance
sheet asset accounts in order to maintain a current ratio of at least 2.0 times
for hospitals and 1.5 times for all other facilities; or
B) Borrowing
is less costly than the liquidation of existing investments, and the existing
investments being retained may be converted to cash or used to retire debt
within a 60-day period.
b) Conditions of Debt
Financing – Review Criterion
Applicants with projects involving
debt financing shall document that the conditions of debt financing are
reasonable by submitting a notarized statement signed by an authorized
representative that attests to the following, as applicable:
1) That
the selected form of debt financing for the project will be at the lowest net
cost available;
2) That
the selected form of debt financing will not be at the lowest net cost
available, but is more advantageous due to such terms as prepayment privileges,
no required mortgage, access to additional indebtedness, term (years),
financing costs and other factors;
3) That
the project involves (in total or in part) the leasing of equipment or
facilities and that the expenses incurred with leasing a facility or equipment
are less costly than constructing a new facility or purchasing new equipment.
c) Reasonableness of
Project and Related Costs − Review Criterion
The applicant shall document that
the estimated project costs are reasonable and shall document compliance with
the following:
1) Preplanning
costs shall not exceed the standards detailed in Appendix A.
2) Total
costs for site survey, soil investigation fees and site preparation shall not
exceed the standards detailed in Appendix A unless the applicant documents site
constraints or complexities, and provides evidence that the costs are similar
to or consistent with other projects that have experienced similar constraints
or complexities.
3) Construction
and modernization costs per square foot shall not exceed the standards detailed
in Appendix A unless the applicant documents construction constraints or other
design complexities and provides evidence that the costs are similar to or
consistent with other projects that have experienced similar constraints or
complexities.
HFSRB NOTE: Construction and
modernization costs (i.e., all costs contained in construction and
modernization contracts) plus contingencies shall be evaluated for conformance
with the standards detailed in Appendix A.
4) Contingencies
(stated as a percentage of construction costs for the project's stage of
architectural development) shall not exceed the standards detailed in Appendix
A unless the applicant documents construction constraints or other design
complexities and provides evidence that the costs are similar to or consistent
with other projects that have experienced similar constraints or complexities.
HFSRB NOTE: Contingencies shall be
limited in use for construction or modernization (line item) costs only and
shall be included in construction and modernization cost per square foot
calculations and evaluated for conformance with the standards detailed in
Appendix A. If, subsequent to permit issuance, contingencies are proposed to
be used for other component (line item) costs, an alteration to the permit (as
detailed in 77 Ill. Adm. Code 1130.750) must be approved by HFSRB prior to that
use.
5) New construction
or modernization fees and architectural/engineering fees shall not
exceed the fee schedule standards detailed in Appendix A unless the applicant
documents construction constraints or other design complexities and provides
evidence that the costs are similar to or consistent with other projects that
have experienced similar constraints or complexities.
6) The
costs of all capitalized equipment not included in construction contracts shall
not exceed the standards for equipment as detailed in Appendix A unless the
applicant documents the need for additional or specialized equipment due to the
scope or complexities of the services to be provided. As documentation, the
applicant shall provide evidence that the costs are similar to or consistent
with other projects of similar scope and complexity, and attest that the
equipment will be acquired at the lowest net cost available, or that the choice
of higher cost equipment is justified due to such factors as, but not limited
to, maintenance agreements, options to purchase, or greater diagnostic or
therapeutic capabilities.
7) Building
acquisition, net interest expense, and other estimated costs shall not exceed
the standards detailed in Appendix A. If Appendix A does not specify a
standard for the cost component, the applicant shall provide documentation that
the costs are consistent with industry norms based upon a comparison with
previously approved projects of similar scope and complexity.
d) Projected Operating Costs
The applicant shall provide the
projected direct annual operating costs (in current dollars per equivalent
patient day or unit of service) for the first full fiscal year at target
utilization but no more than two years following project completion. Direct
costs means the fully allocated costs of salaries, benefits and supplies for
the service.
e) Total Effect of the
Project on Capital Costs
The applicant shall provide the
total projected annual capital costs (in current dollars per equivalent patient
day) for the first full fiscal year at target utilization but no more than two
years following project completion.
(Source:
Amended at 40 Ill. Reg. 14067, effective September 27, 2016)
SUBPART C: FINANCIAL FEASIBILITY REVIEW CRITERIA
| TITLE 77: PUBLIC HEALTH
CHAPTER II: HEALTH FACILITIES AND SERVICES REVIEW BOARD
SUBCHAPTER b: OTHER BOARD RULES
PART 1120
HEALTH FACILITIES AND SERVICES FINANCIAL AND
ECONOMIC FEASIBILITY REVIEW
SECTION 1120.210 FINANCIAL FEASIBILITY REVIEW CRITERIA (REPEALED)
Section 1120.210 Financial
Feasibility Review Criteria (Repealed)
(Source: Repealed at 34 Ill.
Reg. 6143, effective April 13, 2010)
SUBPART D: ECONOMIC FEASIBILITY REVIEW CRITERIA
| TITLE 77: PUBLIC HEALTH
CHAPTER II: HEALTH FACILITIES AND SERVICES REVIEW BOARD
SUBCHAPTER b: OTHER BOARD RULES
PART 1120
HEALTH FACILITIES AND SERVICES FINANCIAL AND
ECONOMIC FEASIBILITY REVIEW
SECTION 1120.310 ECONOMIC FEASIBILITY REVIEW CRITERIA (RENUMBERED)
Section 1120.310 Economic
Feasibility Review Criteria (Renumbered)
(Source: Section 1120.310
renumbered to Section 1120.140 at 34 Ill. Reg. 6143, effective April 13, 2010)
Section 1120.APPENDIX A Financial and Economic Review Standards
| TITLE 77: PUBLIC HEALTH
CHAPTER II: HEALTH FACILITIES AND SERVICES REVIEW BOARD
SUBCHAPTER b: OTHER BOARD RULES
PART 1120
HEALTH FACILITIES AND SERVICES FINANCIAL AND
ECONOMIC FEASIBILITY REVIEW
SECTION 1120.APPENDIX A FINANCIAL AND ECONOMIC REVIEW STANDARDS
Section 1120.APPENDIX A
Financial and Economic Review Standards
a) Reasonableness of
Project and Related Costs Standards
1) Preplanning
Costs shall not exceed 1.8% of
construction and modernization contracts plus contingencies plus equipment
costs.
2) Site Survey
and Preparation
Costs shall not
exceed 5.0% of construction and contingency costs.
3) New
Construction and Modernization Costs per Gross Square Foot (GSF) Hospital and
long-term care (LTC) cost standards are derived from the RSMeans Building
Construction Cost Data (Means) publication (RSMeans, 63 Smiths Lane, PO Box
800, Kingston MA 02364-9988, 800/334-3509; 2015, no later amendments or
editions included) and will be adjusted (for inflation and location) for each
project to the current year (www.rsmeans.com). Cost standards for the other
types of facilities are derived from the third quartile costs of previously
approved projects and are to be adjusted to the current year based upon
historic inflation rates from RSMeans.
HFSRB NOTE: HFSRB staff will
review the cost per square foot data submitted in the application, to determine
compliance with the latest available cost standards of the RSMeans
publication.
HFSRB NOTE: Modernization
includes the build out of leased space and shall include the cost of all
capital improvements contained in the terms of the lease. These standards are
based on 2015 data.
|
Type of Facility
|
New Construction
|
Modernization
|
|
Hospital
|
Adjusted Means 3rd Quartile
|
70% of Adjusted Means 3rd Quartile
|
|
LTC (includes ICF/DD facilities)
|
Adjusted Means 3rd Quartile
|
70% of Adjusted Means 3rd Quartile
|
|
ESRD
|
$254.58 per gsf
|
$178.33 per gsf
|
|
ASTC
|
$357.89 per gsf
|
$249.66 per gsf
|
4) Contingencies
Contingency costs for projects (or
for components of projects) are based upon a percentage of new construction or
modernization costs and are based upon the status of a project's architectural
contract documents.
|
Status of Project
|
New Construction
|
Modernization
|
|
Contract Documents
|
Components
|
Components
|
|
Schematics
|
10%
|
10-15%
|
|
Preliminary
|
7%
|
7-10%
|
|
Final
|
3-5%
|
5-7%
|
5) New
Construction or Modernization Fees & Architectural/Engineering (A&E)
Fees
Current fees for services for
projects or components of projects involving new construction or modernization
(total amount of construction and contingencies, A&E fees for hospitals,
LTC facilities and ASTCs, A&E fees for ESRDs and outpatient clinical
service facilities, and total fees for site work) can be found in the Centralized
Fee Negotiation Professional Services and Fees Handbook (available at www.cdb.state.il.us
or by contacting the Capital Development Board, 401 South Spring Street,
Springfield, Illinois 62706). HFSRB shall, for all calculations, consider the
latest version of the handbook as released on the Capital Development Board
website.
A) Projects
or Components of Projects Involving New Construction
|
Total Amount of
Construction and Contingencies
|
A&E Fees for
Hospitals, LTC Facilities, ASTCs
|
A&E Fees for
ESRDs, Outpatient Clinical Service Facilities
|
Total Fees for
Site Work
|
|
under
$100,000
|
10.59-15.89%
|
9.75-14.63%
|
7.99-13.70%
|
|
$200,000
|
9.99-14.99%
|
9.15-13.73%
|
7.46-12.78%
|
|
$300,000
|
9.48-14.22%
|
8.64-12.96%
|
6.99-11.99%
|
|
$400,000
|
9.03-13.55%
|
8.19-12.29%
|
6.59-11.30%
|
|
$500,000
|
8.65-12.99%
|
7.80-11.72%
|
6.26-10.72%
|
|
$700,000
|
8.21-12.33%
|
7.36-11.06%
|
5.86-10.05%
|
|
$900,000
|
7.89-11.85%
|
7.05-10.59%
|
5.57-9.55%
|
|
$1,000,000
|
7.79-11.69%
|
6.95-10.43%
|
5.48-9.40%
|
|
$1,250,000
|
7.62-11.44%
|
6.77-10.17%
|
5.33-9.14%
|
|
$1,500,000
|
7.49-11.25%
|
6.649.98%
|
5.21-8.94%
|
|
$1,750,000
|
7.36-11.06%
|
6.53-9.81%
|
5.10-8.74%
|
|
$2,500,000
|
7.06-10.60%
|
6.22-9.34%
|
4.83-8.27%
|
|
$3,000,000
|
6.89-10.35%
|
6.04-9.08%
|
4.67-8.00%
|
|
$5,000,000
|
6.42-9.64%
|
5.57-8.37%
|
4.25-7.29%
|
|
$7,000,000
|
6.11-9.17%
|
5.27-7.91%
|
3.97-6.80%
|
|
$9,000,000
|
5.94-8.92%
|
5.09-7.65%
|
3.82-6.55%
|
|
$10,000,000
|
5.90-8.86%
|
5.05-7.59%
|
3.78-6.48%
|
|
$15,000,000
|
5.76-8.66%
|
4.94-7.42%
|
3.69-6.33%
|
|
$20,000,000
|
5.64-8.48%
|
4.84-7.28%
|
3.62-6.20%
|
|
$25,000,000
|
5.52-8.28%
|
4.75-7.13%
|
3.56-6.10%
|
|
$30,000,000
|
5.37-8.07%
|
4.63-6.95%
|
3.48-5.96%
|
|
$40,000,000
|
5.12-7.68%
|
4.42-6.64%
|
3.34-5.73%
|
|
$50,000,000
|
4.86-7.30%
|
4.22-6.34%
|
3.19-5.48%
|
|
$100,000,000
and over
|
3.59-5.39%
|
3.16-4.74%
|
2.46-4.21%
|
B) Projects
or Components of Projects Involving Modernization
|
Total Amount of
Construction and Contingencies
|
A&E Fees for
Hospitals, LTC facilities, ASTCs
|
A&E Fees for
ESRDs, Outpatient Clinical Service facilities
|
Total Fees for Site
Work
|
|
under
$100,000
|
10.76-16.16%
|
9.92-14.88%
|
8.12-13.92%
|
|
$200,000
|
10.16-15.26%
|
9.31-13.97%
|
7.58-13.00%
|
|
$300,000
|
9.65-14.49%
|
8.80-13.20%
|
7.12-12.21%
|
|
$400,000
|
9.20-13.80%
|
8.34-12.52%
|
6.71-11.51%
|
|
$500,000
|
8.81-13.23%
|
7.96-11.94%
|
6.37-10.92%
|
|
$700,000
|
8.36-12.56%
|
7.50-11.26%
|
5.97-10.23%
|
|
$900,000
|
8.04-12.06%
|
7.18-10.78%
|
5.67-9.73%
|
|
$1,000,000
|
7.93-11.91%
|
7.08-10.62%
|
5.58-9.57%
|
|
$1,250,000
|
7.76-11.66%
|
6.90-10.36%
|
5.43-9.31%
|
|
$1,500,000
|
7.63-11.45%
|
6.76-10.16%
|
5.31-9.10%
|
|
$1,750,000
|
7.50-11.26%
|
6.65-9.99%
|
5.20-8.91%
|
|
$2,000,000
|
7.40-11.12%
|
6.54-9.82%
|
5.10-8.75%
|
|
$2,500,000
|
7.19-10.79%
|
6.34-9.52%
|
4.91-8.43%
|
|
$3,000,000
|
7.02-10.54%
|
6.16-9.24%
|
4.76-8.15%
|
|
$5,000,000
|
6.54-9.82%
|
5.68-8.52%
|
4.33-7.42%
|
|
$7,000,000
|
6.22-9.34%
|
5.36-8.06%
|
4.04-6.93%
|
|
$9,000,000
|
6.04-9.08%
|
5.19-7.79%
|
3.89-6.67%
|
|
$10,000,000
|
6.00-9.02%
|
5.15-7.73%
|
3.85-6.61%
|
|
$15,000,000
|
5.87-8.81%
|
5.04-7.56%
|
3.76-6.45%
|
|
$20,000,000
|
5.74-8.62%
|
4.93-7.41%
|
3.69-6.32%
|
|
$25,000,000
|
5.62-8.44%
|
4.84-7.26%
|
3.63-6.21%
|
|
$30,000,000
|
5.48-8.22%
|
4.72-7.08%
|
3.54-6.07%
|
|
$40,000,000
|
5.21-7.83%
|
4.50-6.76%
|
3.41-5.84%
|
|
$50,000,000
|
4.95-7.43%
|
4.30-6.46%
|
3.25-5.58%
|
|
$100,000,000
and over
|
3.65-5.49%
|
3.22-4.84%
|
2.50-4.29%
|
6) Capital
Equipment Not Included in Construction Contracts
Standards for capital equipment
not included in construction contracts are established by type of facility and
are derived from the third quartile costs of previously approved projects for
which data are available. The standards apply only to the following types of
projects: establishment of new facilities, expansion of existing facilities
(e.g., bed additions, station additions, or operating/treatment room
additions), and modernization of existing facilities involving replacement of
existing beds, relocation of existing facilities, replacement of ASTC operating
or procedure room equipment, etc. The standards below are calculated for the
year 2008. These will be inflated to the current year using the inflation of
major medical equipment by the department. (Long Term Care standard includes
ICF/DD.)
HFSRB NOTE: Modernization includes
the build out of leased space and shall include the cost of capital equipment
included in the terms of the lease.
|
Hospitals
|
LTCs
|
ESRDs
|
ASTCs
|
|
|
Per Bed
|
Per Station
|
Per Room
|
|
N/A
|
$6,491
|
$39,945
|
$353,802
|
7) Inflation
Factor
Costs for construction and
modernization contracts and equipment are to be adjusted for projected
inflation. The projected inflation rate is to be calculated to the midpoint of
construction. For construction midpoint of up to 3 years, the inflation rate shall
be an average of the previous 3 years annual inflation rates for construction as
determined by RSMeans. For construction midpoints beyond 3 years, the inflation
rate shall be the lesser of this rate or 3% for the period of time beyond 3
years.
b) Financial Viability
Standards
1) Current Ratio = Current Assets/Current Liabilities
|
Type of Hospital:
|
Standard
|
|
Not-For-Profit, System
|
2.0 or more
|
|
Not-For-Profit, Non-System
|
2.0 or more
|
|
For Profit, System
|
2.0 or more
|
|
For-Profit, Non-system
|
2.0 or more
|
|
Governmental
|
2.0 or more
|
|
Type of Long-Term Care (including ICF/DD) Facilities:
|
|
Not-For-Profit, System
|
1.5 or more
|
|
Not-For-Profit, Non-System
|
1.5 or more
|
|
For-Profit, System
|
1.5 or more
|
|
For-Profit, Non-System
|
1.5 or more
|
|
Governmental
|
1.5 or more
|
|
End Stage Renal Dialysis Facilities
|
1.5 or more
|
|
Ambulatory Surgical Treatment Centers
|
1.5 or more
|
2) Net
Margin Percentage = (Net
Income/Net Operating Revenues) X 100
|
Type of Hospital:
|
Standard
|
|
Not-For-Profit, System
|
3.0% or more
|
|
Not-For-Profit, Non-System
|
3.0% or more
|
|
For Profit, System
|
3.0% or more
|
|
For-Profit, Non-system
|
3.0% or more
|
|
Governmental
|
0% or more
|
|
Type of Long-Term Care (including ICF/DD) Facilities:
|
|
Not-For-Profit, System
|
2.5% or more
|
|
Not-For-Profit, Non-system
|
2.5% or more
|
|
For-Profit, System
|
2.5% or more
|
|
For-Profit, Non-system
|
2.5% or more
|
|
Governmental
|
0% or more
|
|
End Stage Renal Dialysis Facilities
|
3.5% or more
|
|
Ambulatory Surgical Treatment Centers
|
3.5% or more
|
HFSRB NOTE: Net Margin
Percentage for FOR-PROFITS is before the provision for income taxes. Net income
is the excess of revenues over expenses from operations, before non-recurring
income or expense.
3) Long-Term Debt to Capitalization =
(Long-Term Debt/Long-Term Debt plus Net Assets) X 100
|
Type of Hospital:
|
Standard
|
|
Not-For-Profit, System
|
50% or less
|
|
Not-For-Profit, Non-System
|
50% or less
|
|
For-Profit, System
|
50% or less
|
|
For-Profit, Non-System
|
50% or less
|
|
Governmental
|
NA
|
|
Type of Long-Term Care (including ICF/DD) Facilities:
|
|
Not-For-Profit, System
|
80% or less
|
|
Not-For-Profit, Non-system
|
80% or less
|
|
For-Profit, System
|
50% or less
|
|
For-Profit, Non-system
|
50% or less
|
|
Governmental
|
NA
|
|
End Stage Renal Dialysis Facilities
|
80% or less
|
|
Ambulatory Surgical Treatment Centers
|
80% or less
|
HFSRB NOTE: For long-term care
facilities and for-profit facilities, the applicant shall explain the rationale
of the use of debt rather than the issuance of stock (if this is the case).
4) Projected
Debt Service Coverage = Net Income plus (Depreciation plus Interest plus Amortization)/Principal
Payments plus Interest Expense for the Year of Maximum Debt Service after Project
Completion
|
Type of Hospital:
|
Standard
|
|
Not-For-Profit, System
|
2.5 or more
|
|
Not-For-Profit, Non-System
|
2.5 or more
|
|
For-Profit, System
|
2.5 or more
|
|
For-Profit, Non-System
|
2.5 or more
|
|
Governmental
|
2.5 or more
|
|
Type of Long-Term Care (including ICF/DD) Facilities:
|
|
Not-For-Profit, System
|
1.5 or more
|
|
Not-For-Profit, Non-system
|
1.5 or more
|
|
For-Profit, System
|
1.5 or more
|
|
For-Profit, Non-system
|
1.5 or more
|
|
Governmental
|
1.5 or more
|
|
End Stage Renal Dialysis Facilities
|
1.75 or more
|
|
Ambulatory Surgical Treatment Centers
|
1.75 or more
|
HFSRB NOTE: Net Income is the
excess of revenues over expenses from operations, before non-recurring income
or expense.
5) Days-Cash-on-Hand
= (Cash plus Investments plus Board Designated Funds)/(Operating Expense less Depreciation
Expense)/365 days
|
Type of Hospital:
|
Standard
|
|
Not-For-Profit, System
|
75.0 or more days
|
|
Not-For-Profit, Non-System
|
75.0 or more days
|
|
For-Profit, System
|
75.0 or more days
|
|
For-Profit, Non-System
|
75.0 or more days
|
|
Governmental
|
NA
|
|
Type of Long-Term Care (including ICF/DD) Facilities:
|
|
Not-For-Profit, System
|
45 or more days
|
|
Not-For-Profit, Non-system
|
45 or more days
|
|
For-Profit, System
|
45 or more days
|
|
For-Profit, Non-system
|
45 or more days
|
|
Governmental
|
45 or more days
|
|
End Stage Renal Dialysis Facilities
|
45 or more days
|
|
Ambulatory Surgical Treatment Centers
|
45 or more days
|
HFSRB NOTE: Days Cash On Hand
ratio can be a combination of cash and investments held by the facilities or
available funds from the backup line of credit.
6) Cushion
Ratio = (Cash plus Investments plus Board Designated Funds)/(Principal Payments
plus Interest Expense) for the year of maximum debt service after project
completion
|
Type of Hospital:
|
Standard
|
|
Not-For-Profit, System
|
7.0 or more
|
|
Not-For-Profit, Non-System
|
7.0 or more
|
|
For-Profit, System
|
7.0 or more
|
|
For-Profit, Non-System
|
7.0 or more
|
|
Governmental
|
NA
|
|
Type of Long-Term Care (including ICF/DD) Facilities:
|
|
Not-For-Profit, System
|
3.0 or more
|
|
Not-For-Profit, Non-system
|
3.0 or more
|
|
For-Profit, System
|
3.0 or more
|
|
For-Profit, Non-system
|
3.0 or more
|
|
Governmental
|
NA
|
|
End Stage Renal Dialysis Facilities
|
3.0 or more
|
|
Ambulatory Surgical Treatment Centers
|
3.0 or more
|
HFSRB NOTE:
The applicant may also include in the numerator the amount of funds available
from an existing or proposed backup line of credit. If the applicant includes
funds available from a line of credit, documentation shall be provided
regarding the terms and conditions of the line.
(Source: Amended at 40 Ill.
Reg. 14067, effective September 27, 2016)
|
|
|
|
|
|
|
|
|
