Powell River Regional Hospital District’s financial plan has been laid out for qathet Regional District (qRD) directors, specifying financial commitments and expected tax rates.
At the January 11 regional hospital district meeting, qRD manager of financial services Linda Greenan outlined the first draft of the regional hospital district 2023 draft budget.
Greenan said Vancouver Coastal Health (VCH) had made two cost-share requests. One cost-share request was made and approved in 2021 for $2.8 million and was funded through $2.6 million from borrowing over 10 years, and $118,356 from reserves. She said a further $791,756 was approved in 2022 and was funded through borrowing over a five-year term. A further $791,756 has been requested for 2023.
Greenan said for Willingdon Creek Village, annual lease revenue of $1.2 million is received from VCH. The regional hospital board has debt payments of nearly $1.5 million until 2024, with the difference between lease revenue and debt payments being made up by taxpayers, according to Greenan. The regional hospital district will continue to have debt on the building until 2034.
“We have been saving money in the reserve so we can pay down that debt, just in case the interest rate is much higher,” said Greenan. “Paying it down will mitigate the interest and hopefully, the goal would be to keep the debt payments at the same rate that they are right now, or lower.”
Also regarding Willingdon Creek Village, the maintenance reserve contributions are $240,000 annually and that is to pay for all of the parts of the building for which the regional hospital district has responsibility, according to Greenan. This includes the building envelope and the external portions of the building.
Greenan said VCH takes care of everything on the inside of the facility. The maintenance reserve is estimated to be $2.2 million at the end of 2023.
In terms of the Willingdon Creek Village reserve fund, the 2023 balance is estimated at $4.6 million. Greenan said the plan is to use $4 million to mitigate the interest rate risk upon renewal in 2024.
Greenan said residential tax rates for the regional district indicate a tax requisition of $935,349 in 2022, and a $1,267,422 requisition in 2023, which is a 35.5 per cent change. The tax rate per $100,000 of net taxable value on a property is $16.54. It will be $9.55 for Tla’amin Nation because Tla’amin doesn’t contribute to the Willingdon Creek Village debt.
Greenan said the cost per average home for the regional hospital district budget is $85.48 in 2023, based on the 2022 average home figure of $516,654.95.
Greenan said she performed a comparison of the hospital district rate to other neighbouring jurisdictions in 2022. Out of 41 jurisdictions surveyed, Powell River ranked 35th, she added.
“We are on the lower end of the scale for our tax rate,” said Greenan.
She said in this financial plan, she is also proposing a five-year financial plan.
“The BC Hospital District Act only requires a one-year financial plan but a five-year financial plan is nice because it gives some certainty for where we are planning for the tax rates to go and for the future,” said Greenan.
Electoral Area D director Sandy McCormick asked if the regional hospital district was expected by the health authority to keep on borrowing money and taking on huge debt to meet the cost-share requests.
City director and hospital board chair George Doubt said efforts are being made to get the Sunshine Coast and Squamish regional hospital districts together to talk about the relationship with VCH and getting some predictability around capital cost share requests. He said he is going to try to set up a meeting with the other chairs to get more forecasting ability for the regional hospital districts.
McCormick said she is concerned about the level of debt that taxpayers are funding, and that’s why she asked the question.
The committee voted to accept the first draft of the proposed 2023 budget and the proposed 2023 to 2027 financial plan.
