NORTHWESTERN local government leaders have rejected a bid by the Northern Health Authority to increase what they’re prepared to pay toward the construction of a new Mills Memorial Hospital.
Directors of the North West Regional Hospital District had already decided northwestern property owners would pay no more than 20 per cent of the cost for a new Mills, now pegged at $362 million, but were then asked by health authority chair Charles Jago to reconsider and to increase the commitment to 30 per cent.
“As you are aware, the Ministry of Health generally expects a contribution of 40 per cent from the [regional hospital district] for major capital projects,” Jago wrote to the board March 17.
He acknowledged the hospital district’s worry of having to pay for 40 per cent of the project, but added, “in order ensure that this project moves forward and is not put at risk, we would strongly encourage you to consider the minimum contribution of 30 per cent.”
Meeting in Terrace March 24, hospital district directors, who represent local governments from Haida Gwaii east to Houston and who raise money for hospital equipment and major projects through property taxes, decided against Jago’s request but not before exploring the issue in full.
And they did agree to tell Jago they first want to see a business case for a new Mills which will outline costs in more detail before revisiting the idea of a contribution increase.
Smithers mayor Taylor Bachrach felt that agreeing to 30 per cent or more for Mills would set a precedent for other hospital projects in the years ahead, including a replacement for the hospital in his town.
“I think we’re in a pretty strong position,” he said in noting the provincial government has already agreed to replace Mills Memorial.
Masset mayor Barry Pages said he didn’t have an issue with 30 per cent but thought a cap on the actual amount of money would limit taxpayer exposure.
“Otherwise we might run the risk of delaying [the project],” he said if there was some pushback from the provincial government.
Other directors concurred, saying that if the project stalls on disagreements over financing, the provincial government could blame that on the hospital district.
Prince Rupert councillor Barry Cunningham said residents in that city wouldn’t welcome a higher figure.
“If we came back with a higher tax for a hospital down the highway, that would be a tough sell,” he said.
Stewart mayor Galina Durant joined other directors in saying the hospital district should wait for the business plan to be finished, something that could take well into next year, before considering a change in what taxpayers here will pay.
“We really need to know what the final numbers are. Percentages are kind of very vague,” she said.
Hazelton mayor Alice Maitland took a firm position, saying she and the other directors have the job of protecting taxpayers.
“We want to be hard nose,” she said in advocating sticking to the 20 per cent contribution decision.
Communities in the Hazeltons have a limited ability to pay taxes anyway given the high number of people on fixed incomes and the lack of an industrial base, she said.
Des Nobels, a director from the North Coast Regional district, said he agreed with Maitland. “If we were comfortable with 20 per cent already, why would we change at this point?” he asked.
City of Terrace councillor Sean Bujtas noted that the situation has changed since the hospital district first adopted its 20 per cent contribution decision.
“We were in a begging position then,” he said before the province announced it would replace Mills.
“Now we’re in a negotiating position,” he said since the Feb. 28 announcement made in Terrace by finance minister Mike de Jong.
“Let’s see what the business plan looks like,” he said.
After agreeing how to respond to Jago, regional hospital district directors formalized their 20 per cent contribution decision by passing a budget bylaw for this year.
It calls for a tax rate increase of 20 cents per $1,000 of residential assessed value, from 46 cents to 66 cents, in order to reflect the 20 per cent contribution decision.
For 2017 and 2018 the regional hospital district is budgeting for a share of the business plan cost. Actual borrowing for construction would not start until 2019 and last until 2022 with subsequent debt repayments required over several decades.
While regional hospital districts in B.C. have traditionally paid for 40 per cent of hospital construction costs, exceptions are made.
That was the case in the neighbouring Stuart-Nechako Regional Hospital District when a new hospital was built there recently, and taxpayers in the region are paying 20 per cent.
“In exceptional circumstances, where the population is quite small and may not be able to support a 40 per cent cost share of a major capital project, the province has considered a lower percentage,” said the health ministry in a statement.