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Tribe’s Joint Venture denial explained; Any future clinic plans are put on hold

By Joe Morey News Editor

Last month it was learned that the Tribe’s Joint Venture Funding application for assistance with a new health facility at LCO was denied. The Indian Health Service (IHS) provided tribal government officials with more information on the reason for the denial and which Tribes were chosen to advance in the application process.

The JVF program would have paid for operations and payroll for a new tribal health center for the next 20 years. The LCO Tribal Governing Board earlier in 2019 had researched another option, to borrow from the Shakopee Sioux Tribe to pay for the entire construction of a new clinic and the Tribe fund the operations itself for the 20 years.

“I don’t believe that we should consider moving forward without Joint Venture unless we know all the facts about our rating capabilities and ability to get the Joint Venture Program here,” stated Michelle Beaudin, LCO Secretary-Treasurer. “It is not something we want to take on without the ability to pay the loan back and be able to fund staffing of a new and larger facility.”

There is a consensus among TGB members that agree with Beaudin in not going forward at this time with a new clinic facility. LCO Chairman Louis Taylor agreed, stating he believes the Tribe won’t be able to afford paying back the loan while also funding clinic operating costs. He also noted it would cost several million in infrastructure costs to move the clinic to a new location.

LCO TGB member Tweed Shuman said, “In my opinion, I don’t think we’re able to move forward at this time. We need to stabilize the current operation where it is now before we can consider going forward without Joint Venture Funding. Our patient numbers are down and we still don’t have a good financial plan.”

Shuman said he is still concerned that there’s been a lack of transparency over the past several years with the clinic financials.

One year ago, tribal officials met with Tom Ranfranz, Shakopee Mdewakanton tribal liaison, to discuss possibly taking a loan through Shakopee for construction costs. Ranfranz explained taking the loan through Shakopee, the tribe would pay 6.5% interest over the duration of a 15-year loan. He said some tribes choose to pursue a USDA loan that would extend for 40 years and provide the tribe a much better cash flow, but in the long run, will pay a lot more.

Shakopee Sioux have lent in excess of $600 million for tribal projects and their tribal grants program gives $11 million to $18 m per year. The grants program allows a Tribe to apply for up to $500,000 per year. LCO wouldn’t be restricted for applying each year for this amount to help with the new health and wellness center costs.

Jason Weaver, LCO Grants, recently stated the LCO Clinic is the oldest in the Bemidji area.

“Built in 1983 originally, it has had many additions and remodeling projects since, but it still hasn’t provided a clinic that meets our community health care needs or our growing population. Many Tribal members are using other Tribal and non-Tribal clinics because of the options and shorter wait times. These are areas we can improve with a new facility,” Weaver explained in a statement from the Grants Department.

Weaver also stated there is still a need for a new modern clinic. He mentioned moving forward with a feasibility study to determine how quickly the Tribe would be able to pay off a loan for construction just like our neighbors in Lac du Flambeau and Red Cliff have done. Both Tribes built new clinics without Joint Venture Funding utilizing loans through Shakopee.

IHS Denial

In their denial of the JVF program for LCO, part of the reason was our close proximity to Essentia Health, Northlakes and Marshfield Clinics located only 5 miles away in Hayward.

Beaudin asked the Bemidji Office of IHS for a response and Chris Poole stated, “One of the factors that contributed to the lower scores in the Bemidji Area as a whole, has to do with proximity to other healthcare facilities. It is by no means the only factor. The two largest influencing factors have to do with the distance to the nearest Emergency Room and the ratio of needed space vs. existing space. The needed vs existing space is based upon the user population. Many of the Alaska tribes are close to or more than 120 miles from the nearest ER.”

Omobogie Amadasu, P.E., Lieutenant Commander, US Public Health Service who is Program Manager for the IHS Division of Facilities Planning and Construction (DFPC) explained the process, amount of tribal applications and how tribes were selected, in a letter to the Tribe;

“Under the JVCP, AI/AN Tribes construct a Tribally-owned health care facility per IHS criteria/approval using non-IHS funds, and in exchange, IHS will provide operation and maintenance of the facility under a 20 year nominal lease. Section 818(e) of The Indian Health Care Improvement Act, Public Law (P.L.) 94-437 and codified at 25 U.S.C 1680h(e) authorizes the JVCP. The JVCP projects are selected competitively in a two-step process from Tribal applicants that meet the program requirements. We have received 43 JVCP project Phase I, Pre- Applications in the 2019 request for proposals. The IHS commends Tribes for their participation in the JVCP along with their willingness to commit tribal resources to enhance delivery of health services.

“The Phase I Pre-Application is used to determine if the proposed project is eligible for consideration and has the potential for successful competitive selection. The submittals are reviewed by IHS for compliance with the eligibility requirements as outlined in the Application package. The scores from the JVCP Phase I Data and Computation Forms are used to rank order the Pre-Applications received, and the top-ranked, eligible, competitive applicants are invited to submit Phase II Applications for consideration.

“The 43 Phase I Pre-Applications submitted had scores ranging from 104 to 490. The 10 applicants notified to submit a Phase II Final Application had scores >235. Five of the 10 applicants invited to submit phase II applications were from the Alaska Area. In the current Phase I evaluation, the projects selected for Phase II happen to be the highest ranking projects, but that isn’t required and there can be issues related to eligibility or competiveness that could supersede the rank order.

“The Phase II Final Application requires the applicant to provide more detailed planning material on their proposed project. Applicants conducting the detailed planning consume some of their valuable resources. We do not want Tribes to waste their resources on Phase II if their project is unlikely to be selected; this is why we are limiting Phase II to 10 applicants. Eventually, at most, only 3 to 5 applications from Phase II Final Application will be selected and awarded JVCP projects.”


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