CHICAGO — The financial toll of the tornado that ripped through Joplin, Mo., on Sunday, killing more than 100 and destroying a local hospital, remains unknown, but Moody’s Investors Service expects the health care system’s rating will weather the impact and Missouri said it stands ready with aid.
Officials late this week began assessing the fiscal damage even as city, state and volunteer resources remained focused on cleanup efforts and on recovering missing residents as the death toll from the deadliest twister in more than 60 years reached 125 on Thursday.
More than 200 residents remain missing and at least 750 have been treated at hospitals since the deadly twister hit on Sunday, according to state officials.
Risk modeler Eqecat Inc. estimated that losses from the storm would amount to between $1 billion to $3 billion. Damage to the city of 50,000 in Jasper and Newton counties, includes residential, commercial and industrial properties with preliminary estimates warning that 2,000 buildings were destroyed. Several schools also suffered extensive damage.
The 370-bed St. John’s Regional Medical Center, part of the Chesterfield, Mo.-based Sisters of Mercy Health System, was among the facilities that were severely damaged. The system operates hospitals in Missouri, Kansas, Oklahoma, and Arkansas. “We do not believe this disaster will affect Mercy’s Aa3 rating,” Moody’s analyst Mark Pascaris wrote in special commentary after the storm.
According to Mercy management, St. John’s represents 4% of total operating revenus, and accounted for less than 1% of operating cash flow in fiscal year 2010. Mercy president Lynn Britton announced the system’s intention to rebuild at a news conference Wednesday. A spokeswoman said officials did not yet have a price tag on the costs of the tornado, the cost of building a new facility, or the amount covered by insurance.
“The Sisters of Mercy came to this community in 1885 and opened the hospital in 1896,” Britton said. “They’ve been through hard times before — perhaps nothing quite on the magnitude of this — but our commitment to Joplin remains strong.”
Standard & Poor’s rates Mercy AA-minus and assigns a AA to Joplin. While federal and state aid along with insurance will help with the financial burden, the disaster could adversely affect city coffers, property tax revenue and business. Officials could not be reached to comment on the potential impact or how they were coping with near-term expenses.
The Federal Emergency Management Agency has declared the region a disaster area, making it eligible for assistance covering 75% of recovery costs. Missouri officials on Thursday hosted a community response meeting during which state agencies provided an overview of available services and resources.
“We are putting every available resource in place to help families and businesses cope with the aftermath of this devastating storm,” Gov. Jay Nixon said in a statement. “This meeting is the first step on a long road to recovery, but we will be there every step of the way.”
State budget director Linda Luebbering said $25 million in emergency funding has been set aside to aid in covering the public recovery costs. The state traditionally has picked up 10% of the 25% of public costs not covered by federal aid.
“It’s very early in the process but the state has existing resources for these types of issues,” Luebbering said.
Any additional funds needed to help cover public recovery costs would be included in the fiscal 2012 budget recently passed by the Legislature. The state has the power to withhold allocated spending and divert it for other uses if needed. It also has $500 million in reserves, though there are currently no plans to tap them.
