77 Ill. Adm. Code 1120.APPENDIX A
A Financial and Economic Review Standards
Section 1120
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 3
rd
Quartile
70% of Adjusted Means 3
rd
Quartile
LTC (includes ICF/DD facilities)
Adjusted Means 3
rd
Quartile
70% of Adjusted Means 3
rd
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)
C
urrent
R
atio = 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)
N
et
M
argin
P
ercentage = (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)
L
ong-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.