ROCKFORD, Ill. (WIFR) -- Javon Bea, President and CEO of Mercyhealth, has sent a letter to Rockford mayor Tom McNamara in response to a $24.2 million lawsuit filed against the city.
The lawsuit, filed by an Indiana-based insurance company, alleges the company paid Mercy Health System Corporation that amount as a result of flood damage at the Mercyhealth Javon Bea Hospital - Rockton campus on June 18, 2018.
Bea acknowledges the lawsuit in the letter, saying the insurance company is exercising its legal rights to seek to recover the costs from the insurance claim.
The Mercyhealth CEO says he is willing to work with the city of Rockford to solve issues surrounding the Rockton Avenue campus. He suggests Mercyhealth and the city of Rockford need to take action together.
Bea says the Rockton Avenue campus was saved from flood damage, "but in the event of another major water event, we will not have hundreds of trade workers available to us at a moment’s notice." If the hospital were to be contaminated, Bea says it could result in a permanent closure.
The full letter from Javon Bea is below:
"Mayor Tom McNamara;
In further response to our discussion on June 12, I again would like to reiterate that Rockford is my hometown and I have hundreds of relatives who live in the area. I am committed to providing the very best health care services to area residents, as well as the success and growth of Rockford. This is why Mercyhealth has invested over $1 billion on a new hospital, new clinics, new physician residency programs, and recruited over 250 new employed physicians in many specialties which never existed before in Rockford.
On June 18, 2018 when Javon Bea Hospital and Physician Clinic–Rockton flooded, we diverted hundreds of contractors from our Riverside project to immediately assist with water damages and build an alternative ventilation system to keep the micro-organisms in the polluted water from contaminating the whole hospital through the normal HVAC system. If the contamination had occurred, the whole hospital would have been permanently closed on June 18. In addition to diverting contractors from our Riverside project, we also mobilized over 1,000 employee partners, including myself and the executive and management team from throughout the entire Mercyhealth system, to perform clean up and haul debris out of the hospital and to ensure minute-by-minute patient care was not interrupted.
After we saved the hospital on June 18 and the following days and weeks, we could have chosen to take the $30 million of insurance money in cash and invest it in the Riverside hospital. Instead, we chose to rebuild the entire lower level with all new support and diagnostic services and technology. This is in addition to over $20 million we have already invested on the Rockton Avenue campus, which brings our total investment to over $50 million in our hospital on Rockton Avenue. As I stated to you, if we did not save the hospital from total contamination on June 18, our insurance claim would have been upwards of $200 million.
Mercyhealth is committed to building a larger retention pond and any other measures recommended by the consulting engineers. However, these measures will not alone solve the flooding issues, as determined through extensive studies conducted by an engineering firm that also serves the City. The engineers have stated that there is nothing that can be done on Mercyhealth’s campus alone that will solve the water threat, which is still imminent because 250 acres of surface water and rain from outside our property flows onto the Rockton Avenue Campus. The City’s cooperation to invest a small amount of money to finance a GO bond to build a $6.5 million box culvert under the public street of Arcadia to convey the water from our retention pond to Kent Creek is absolutely needed according to the engineers. The solution requires both Mercyhealth and the City of Rockford taking action. As you know, the City Ordinance states the storm water sewer should be able to handle a 10-year flood. The current storm water sewer can only handle a one-year flood. Thus, the City is in violation of its own ordinance. As I also shared with you, Mercyhealth’s current insurer, Federal Insurance Company (also known as Chubb) and the other prospective insurers we have sought insurance from will no longer provide unlimited water damage coverage for any of our Rockford facilities. Chubb has placed a $5 million limit on water damage coverage with a $1 million deductible. Another major insurance carrier will only provide up to $10 million in water damage coverage with a 50% increase in our premium, at a cost of over $1 million per year. At the risk of stating the obvious, this is highly problematic.
Let me reiterate, Rockford is my hometown. We saved the Rockton Avenue hospital on June 18, 2018, but in the event of another major water event, we will not have hundreds of trade workers available to us at a moment’s notice. Most likely, the entire hospital would be contaminated, which would result in permanent closure.
As I shared with you today, the lawsuit filed by Chubb this month is of their own doing. Like nearly all insurers, they are exercising their legal rights to seek to recover the costs of our insurance claim. Mercyhealth’s Board of Directors has the ultimate legal accountability for all Mercyhealth assets. They have separately directed our legal department to take legal action with the Rockford City Government to bring about the necessary action (including installation of a box culvert under Arcadia Street) in order to protect Mercyhealth’s Javon Bea Hospital on Rockton Avenue. I sincerely hope the City and Mercyhealth can work together in a very timely manner to protect the Rockton Avenue hospital and trauma center from the imminent threat of future water damage.
Tom, I stand ready to work with you at any time.
Javon R. Bea