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University study looks at impact of vets home in Montevideo

MONTEVIDEO -- Operating a 90-bed veterans home in Montevideo would create an additional $11.7 million worth of economic activity annually for a three-county area, a University of Minnesota Extension study shows.

The report's authors presented the results of their study Monday to Montevideo City Council members. A community task force is putting together a proposal to the Legislature to build a home in the community.

Council member Marv Garbe said he was not surprised to see a positive financial impact from the project, but welcomed having the benefits detailed "in black and white.''

Those numbers should help task force members as they seek to raise $1 million to $2 million from local sources for the project.

Steve Jones, Montevideo city administrator, said current estimates indicate that a 90-bed veterans home would cost $22 million to construct. The state of Minnesota would be responsible for about $8 million of the total, and the federal government the remainder. Its ongoing operation costs would be the responsibility of the state and federal governments.

The Montevideo task force is hoping to encourage the state Legislature to bond for the project -- and select a Montevideo site -- by offering to reduce the state's share of costs with the locally raised funds. To date, the task force has $825,000 in pledges toward the $1 million to $2 million goal, Jones said.

The University of Minnesota Extension study is not designed to provide a cost-benefit analysis of a project, but it does offer a look at the financial activity that would result from a project, according to Neil Linscheid, an economist and one of the study's authors.

The study found that a veterans home would create 205 new full- and part-time jobs for the Montevideo labor area, roughly considered to be an area within a 45-minute drive of the community. It includes Chippewa, Lac qui Parle and Yellow Medicine counties. The number includes 160 jobs at the facility, and 45 others in businesses providing goods and services to it and its employees.

Added together, the new jobs represent an annual labor income gain for the region of $7,945,566, according to the study.

The construction of the facility would also provide a significant boost to the regional economy. The study determined that its construction would create 202 full- and part-time jobs for one year, representing $9.2 million in labor income. It would pump $23 million into the regional economy during that period.

The facility may cause a temporary disruption in the labor market, but there appears to be sufficient workers available, according to the study. Linscheid said they found 250 people with appropriate skills who expressed a desire to find employment in Montevideo. The number includes 128 who are currently actively seeking positions.

While the financial opportunities provided by a veterans home were the focus of the study, council members noted that the most important benefit is the care it would provide veterans. Council member Garbe and Mayor Jim Curtiss pointed to the need to expand long-term care for veterans -- and the availability of services at the Veterans Affairs Clinic in Montevideo -- as factors that support construction of a new home in Montevideo.

There are currently 260,000 veterans in Minnesota, and that number is expected to increase, according to Dennis Anderson, veterans service officer for Chippewa County.

Anderson said that there are currently 900 beds available at veterans homes in Luverne, Fergus Falls, Silver Bay, Hastings and Minneapolis. There is currently a waiting list of at least a year, he said.

Anderson said that the demand for long-term care beds is sure to grow quickly as the state's Vietnam veterans age. Most are now in their 60s. Vietnam-era veterans currently outnumber those from World War II and Korea combined, he said.