Colorado Legislative Council Staff

STATE

FISCAL NOTE

General Fund Expenditure Impact

Cash Fund Exempt Revenue and Expenditure Impact

TITLE:            CONCERNING THE ESTABLISHMENT OF A STATE VETERANS HOME AT THE FORMER FITZSIMONS ARMY MEDICAL CENTER, AND MAKING AN APPROPRIATION THEREFOR.

Summary of Legislation

            The bill would authorize the construction of state veterans nursing home on the site of the former Fitzsimons Army Medical Center. The Department of Human Services would be required to submit a report to the General Assembly prior to beginning construction of a veteran’s nursing home. The report would identify the:

∙          projected increase in need for veteran’s beds in the Denver Metropolitan area;

∙          impact the facility would have on enhancing and continuing support for veterans in the area;

∙          impact on existing veterans nursing home facilities;

∙          existing nursing home facilities that may be leased, purchased, or renovated; and

∙          opportunities and benefits of contracting with private or other public entities for the operation and management of the facility.

            The bill will become effective at 12:01 a.m. on the day following the ninety-day period after adjournment sine die of the General Assembly, or on the date of the official declaration of the vote of the people as proclaimed by the Governor, if a referendum petition is filed pursuant to Article V, Section 1 (3) of the State Constitution.

* Funds would be available for a three-year period.

State Revenue

            The bill would transfer $4,306,770 from the General Fund to the Capital Construction Fund (CCF) in FY 1998-99. This would be new cash fund exempt revenue to the CCF.

            The Fitzsimons Veterans Nursing Home operating revenues identified in Table 1 are based upon the following assumptions:

            •   census development is predicated upon an average occupancy of 90 percent at 162 total residents;

            •   revenue will be comprised of federal veterans payments, patient payments, Medicaid payments, private pay, and other sources;

            •   federal veterans payments represent approximately 28 percent of the total revenue;

            •   the nursing home is expected to be self-sustaining by FY 2003-04; and

            •   revenue projections are based upon current federal reimbursements and do not include any adjustments for potential changes in the rate setting methodology or eligibility at the federal level.

State Expenditures

            The requirement that the department submit a report to the General Assembly prior to construction would not have a fiscal impact that would require additional resources. It is assumed that the Nursing Homes - State and Veterans Division would currently have the information required in the report through its normal operations. The writing of the report and submitting it to the General Assembly would not require additional resources. The bill appropriates $4,306,770 in Capital Construction Funds in FY 1998-99 to the Department of Human Services for construction of the facility. The funds would be available for a three-year period.

            The Fitzsimons Veterans Nursing Home operating expenditures identified in Table 2 are based upon the following assumptions:

            •   the facility start-up period will commence mid-year FY 2002-03 and will last for 18 months. During this time the facility will employ essential staff, and purchase and install equipment prior to resident occupancy;

            •   the facility (nursing home and domiciliary) will open July 1, 2003;

            •   estimates are based on FY 1996-97 actual per patient daily expenses for the Rifle State Veterans Nursing Home;

            •   contract personal services are expected to be used for certain physician, dental, physical therapy, dietary, and pharmaceutical programs; and

            •   security services and ground maintenance are estimated at $38,328 for FY 1999-2000 and $29,528 for FY 2000-01.

Capital Construction Expenditures

            The Fitzsimons Veterans Nursing Home capital construction expenditures identified in Table 3 are based upon the following assumptions;

            •   

the Department of Human Services has negotiated a memorandum of understanding (MOU) with the City of Aurora and the Fitzsimons Redevelopment Authority (FRA). The MOU stipulates the FRA will acquire the site consisting of approximately 15 acres for the project from the Army and transfer the property, at no cost, to the State. Conveyance is anticipated for June 1999. The MOU also specifies obligations for site and utility development;

            •   the facility will be constructed using a Veterans Administration (VA) construction grant whereby the VA provides 65 percent of the construction costs;

            •   the state is responsible for the remaining 35 percent of construction costs and agrees to operate the facility as a state veterans nursing home for a minimum of 20 years;

            •   50 percent of the state’s 35 percent match must be available prior to design with no further state action required in order for the project to be listed as a Priority 1 project by the U.S. Department of Veterans Affairs. The Department of Human Services anticipates federal funding will be available in October, 2001;

            •   state funding will be available June, 1998 (upon signature of the Governor) to start architectural and engineering design, and construction documents;

            •   all construction bid documents are subject to VA final approval; and

            •   construction will commence in October, 2001 and be completed by April 15, 2003 with occupancy on July 1, 2003.

Expenditures Not Included

            Pursuant to the Joint Budget Committee’s budget policies, the following expenditures have not been included in this fiscal note:

            •   Worker’s Compensation; and

            •   indirect costs.

Spending Authority

            The bill transfers $4,306,770 from the General Fund to the Capital Construction Fund and contains an appropriations clause for $4,306,770 from the Capital Construction Fund to the Department of Human Services.

Departments Contacted

Human Services

Table 1 - Fitzsimons State Veterans Nursing Home, Annual Operating Revenue

Table 2 - Fitzsimons Veterans Nursing Home, Annual Operating Expenditures

Table 3 - Fitzsimons Veterans Nursing Home, Construction Costs